Jakarta. The Indonesian government on Tuesday dismissed reports that two automotive component manufacturers are planning to relocate production facilities to Vietnam, saying both companies remain fully operational in Indonesia and continue to contribute to the country’s export sector.

The clarification followed reports suggesting that two manufacturers, identified only by the initials JAI and SAI, were preparing to move production out of Indonesia.

Industry Ministry spokesperson Febri Hendri Antoni Arif said Industry Minister Agus Gumiwang Kartasasmita ordered an investigation on June 21 to verify the claims.

“Based on our findings, we have reached a preliminary conclusion that there are currently no plans to relocate the production facilities of JAI and SAI from Indonesia to Vietnam,” Febri said. “There have also been no workforce reductions at either company.”

According to the ministry, JAI operates in Pasuruan Regency and SAI in Mojokerto Regency, both in East Java province. The companies continue to submit mandatory industrial activity reports through the National Industrial Information System, indicating that their operations remain active.

Febri described factory relocation as a sensitive issue for Indonesia’s automotive industry and foreign investment climate, making it important for the government to verify the accuracy of such reports.

He said the relocation rumors had already caused disruptions for both companies, prompting concerns among customers and suppliers about future production commitments and contract fulfillment.

“Buyers and suppliers were surprised by the reports and sought clarification regarding the companies’ commitment to their contracts going forward,” he said.

The ministry’s investigation found that JAI and SAI are significant investors in Indonesia’s automotive component industry, with combined investments exceeding Rp 1.9 trillion ($106 million).

“The scale of their realized investments demonstrates their confidence in and commitment to continuing operations and expanding investment in Indonesia,” Febri said.

Both companies produce exclusively for export markets, making them part of the global automotive supply chain and contributors to Indonesia’s manufacturing export performance.

The government said it would continue monitoring the performance of manufacturers and respond quickly to disruptions affecting supply chains or demand.

“Minister Agus has instructed his staff to continuously monitor industrial performance and implement swift and measured mitigation measures for industries facing supply-chain or demand-related challenges,” Febri said.

The government remains committed to maintaining a favorable business climate to strengthen the competitiveness of Indonesia’s manufacturing sector and help companies adapt to changing global market conditions, he added.

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