Indonesia and ‘Som Drop’ from the confrontation of giants.

Indonesia and ‘Som Drop’ from the confrontation of giants.


Yesterday I wrote about the issue of industries moving from China to India when there is a situation where the US and China use de-risk policies or “reduce each other’s risks” to overcome differences in the international arena.

India got some of the “oranges” and another part went to Indonesia.

In fact, overall for Southeast Asia An open multilateral trading system has many benefits.

This region is able to integrate with the entire world due to its open trade policy and is in a geographic position that is highly conducive to trade and transportation.

And when risk is reduced in the form of diversifying the supply chain, there is also an increased chance of an inflow of investment from outside.

One of the largest nickel production centers in the region is in the Morowali Indonesia Industrial Park (IMIP) in Sulawesi.

It is said that the lights are on all night long.

Because more than 40,000 employees must be on site at all times.

The park is nearly 4,000 hectares or 25,000 rai. It takes 45 minutes to drive from one end to the other.

There is a power plant and a port area. and even its own airport

Eleven years ago, this area was a dense rainforest and was home to about 3,000 villagers.

Chinese capital invades, led by Tsingshan Holding Group, a giant stainless steel company. Then there was the change of forests into factories.

Hamid Mina Company is a nickel exporter, actively supplying minerals to China.

The Indonesian company jointly invested with Tsingshan to build its first nickel processing plant in 2013.

Chinese business giant Tsingshan sees Indonesian partner as good at building factories and production

And of course, local companies will know the details of Indonesia’s regulations and bureaucracy thoroughly.

China has technology and capital.

Nickel ore has long been an important raw material for the production of stainless steel.

And it is becoming an increasingly important component for lithium-ion batteries in electric vehicles.

The International Energy Agency estimates that by 2040, clean energy technologies will account for 70 percent of total nickel demand.

Indonesia is the world’s largest source of nickel and the largest nickel miner.

Because it can extract almost half of the global supply.

Meanwhile China also has the world’s largest battery and green technology companies.

Therefore it is a perfect coordination.

IMIP takes on the role of smelting and refining huge quantities of nickel. and contribute to China’s efforts to diversify the sources of key inputs that drive economic growth.

The global growth of the electric vehicle (EV) and battery industry is not the only driving force behind Morowali’s growth.

The subject matter is a ban on Indonesian nickel ore exports from 2020.

which has been criticized by the European Union, WTO and the International Monetary Fund (IMF).

But this ban has forced foreign investors to build smelters in Indonesia.

This is equivalent to adding value to metal exports and creating many jobs.

In 2014, Indonesia’s nickel ore exports were valued at US$1.1 billion.

By 2022, the value of nickel product exports jumps to US$34 billion.

That reflects a huge multiplier.

Today, several companies are working together at Morowali to produce this mineral that is now dubbed ‘the mineral’. “Gold of the 21st Century”

With an investment of nearly 5 billion US dollars to 6 billion US dollars or 180,000-200,000 million baht.

Indonesia is sending signals that “We welcome everyone. We don’t care that You come from the West or the East, we do business, there is no politics.”

Not only that To step up the value chain Indonesia is building a more complete “ecosystem” for electric vehicle batteries and lithium batteries.

In 2022, President Joko Widodo unveils the first electric car assembled in Indonesia, produced by Hyundai.

And it is working with two other South Korean companies to produce EV batteries in Indonesia.

last year When he visited Australia, an agreement was signed to mine lithium and nickel to produce EV batteries.

It emphasized that strategic cooperation between the two countries in this field is a top priority.

While China has BYD working with Wuling, a Chinese EV manufacturer, the United States has Tesla discussing investment projects with the Indonesian government.

In the near future Chinese company can process nickel in Indonesia They are then assembled into EV batteries by South Korea.

And it could include an Australian company to produce cars in Indonesia by American and Chinese manufacturers.

In a world faced with geopolitical tensions Jakarta views such global cooperation as the future of national development.

The key goal is to avoid supply chain concentration. in the hands of either party

The strategy is to try to diversify the supply chain without showing any inclination towards any one superpower.

It is worth noting that China’s technology in nickel processing is ahead of Western countries by 10 to 15 years behind.

But that does not mean that Indonesia will choose China or the United States as the main focus.

It is the source of the announcement of cooperation that is beneficial to all parties.

It is recognized that no single country or region can supply all the essential minerals we need for a global transition to clean energy.

Recently, the IMF assessed that ASEAN “It will continue to grow 1.5 times faster than the global average.

In terms of trade, the region posted growth five times higher than the global average in 2022.

If ASEAN comes together to show its strength, let all the great powers know that they will not be forced to choose sides. In the end, ASEAN’s resources will be beneficial to all countries in the world.

Regardless of which camp.

Look at the example of Indonesia. Thailand will have to revise its strategy many times in order to catch up with our friends in ASEAN.

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