Jakarta. US tech giant Apple will invest in an AirTag assembly plant in Indonesia through a third-party vendor, rather than making a direct investment, a government official said on Friday.

Investment Minister Rosan Perkasa Roeslani explained that Apple typically operates through vendors for overseas investments, following the same approach in India, Vietnam, and Malaysia.

"The investment won’t come directly from Apple but will be made through a vendor. This is Apple's global strategy," Rosan told reporters at his office in Jakarta.

According to him, an Apple vendor has already acquired land in Batam to establish a factory that will manufacture AirTag devices and other Apple components.

“Apple relies on around 320 vendors for iPhone production alone. There are currently between 35 and 40 Apple vendors in Thailand, Malaysia, and Vietnam,” Rosan added.

The entry of Apple’s first vendor in Indonesia is expected to attract more global technology investors, Rosan said.

"We want to be part of the global supply chain. It’s not easy to convince international investors to enter Indonesia, but this upcoming investment will hopefully encourage other American companies to follow suit,” he added.

The Apple assembly plant is expected to create 2,000 new jobs and boost Indonesia’s export market, with 65 percent of the plant’s output designated for international markets.

Additionally, Rosan hinted at another major investment from a US company in the manufacturing sector, expected in the first quarter of this year, though he declined to disclose further details.

Investment Value Lower Than Expected
Last week, an Industry Ministry spokesman revealed that Apple’s investment in the Batam AirTag factory is estimated at $200 million, significantly lower than the previously reported $1 billion commitment.

“Based on our technical assessment, the investment value for Apple’s AirTag factory in Batam is only $200 million -- far below the $1 billion commitment outlined in Apple’s proposal,” said Febri Hendri Antoni Arif, the ministry’s spokesperson.

According to Febri, the $200 million figure includes land acquisition, construction costs, and equipment procurement. The discrepancy arose because the Indonesian government’s calculations did not take into account export value projections and raw material supplies, which were factored into Apple’s proposal.

“Apple’s $1 billion investment would be much more impactful if it were allocated entirely to capital expenditures,” Febri added.

Additionally, Apple reportedly still owes the Indonesian government around $10 million in unmet investment commitments from 2020-2023, he said.

Add as a preferred source on Google +