Indonesia, Turkey to Ramp Up Cooperation in Energy and Aerospace Industries


Indonesian ship and airplane builders finalized business deals totaling $520 million with Turkish companies, paving the way for future investments from Turkey into diverse industries in the Southeast Asian nation.

State-owned ship manufacturer PAL Indonesia signed a $320 million deal with Turkish energy company Karadeniz Holding to build four power ships, according to Thomas Lembong, the chairman of the Investment Coordination Board (BKPM).

Each ship will have the capacity to generate 36-80 megawatts of electrical power to bolster energy needs in some of the country’s more remote provinces.

Thomas also said cooperation between PAL and Karadeniz would put Indonesia on the map as an important manufacturing base for power ships in Southeast Asia, where neighboring countries like the Philippines and Myanmar might be potential customers.

In a separate deal, airplane manufacturer Dirgantara Indonesia (DI) and Turkish Aerospace Industries (TAI) agreed to a $200 million cooperation to develop DI’s N245 aircraft and to market the N219 aircraft to Turkish airlines. In return, DI will help market and produce TAI’s UAV-ANKA military drone.

“BKPM supports the recent investment cooperation between Indonesian and Turkish companies. These deals are expected to increase Turkey’s investment into the country, which is currently pretty minimal,” Thomas said.

BKPM data shows that nine Turkish companies invested only $100,000 into Indonesian companies in the first quarter this year, down 80 percent from the same period in 2016. The total amount of foreign direct investments in the country reached $7.3 billion in the first quarter this year.

Both deals were finalized during President Joko “Jokowi” Widodo’s visit to Turkey on Thursday (06/07), when Jokowi and Turkish President Recep Tayyip Erdogan vowed to strengthen business and cultural ties between the two countries.

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