Image source: Screenshot of Cabinet Secretariay of The Republic of Indonesia Youtube

The Indonesian government secured a US$ 11.5 billion investment pledge with the world’s biggest glass producer, Hong Kong-Based Xinyi Glass Holdings Ltd., during President Joko Widodo's (Jokowi) two-day visit to Chengdu, China, on July 27–28. 

The Memorandum of Understanding, signed between Xinyi International Investment and Jakarta-based PT Makmur Elok Graha consists of a plan to establish a glass and solar panel manufacturing facility on the island of Rempang, a part of Riau Islands Province near neighboring Singapore.  

"(It) will be the second-largest factory in the world after China," Investment Minister Bahlil Lahadalia, who accompanied President Jokowi on the trip, said in a web press conference on Friday, July 28, as quoted by Antara News.  

Mr. Lahadalia said 95% of the factory’s output would be intended for export purposes and that 35 thousand job opportunities would be created through the investment. He added that the factory could also play a role in the government’s “downstreaming” policy for Indonesia’s significant reserves of quartz sand, silica, and other related raw materials. 

According to data from the Ministry of Energy and Mineral Resources for 2021, Indonesia has a potential resource of 25 billion tons of quartz sand, with cumulative reserves reaching 330 million tons. Quartz sand is the primary raw material used in the production of glass and solar panels. Xinyi’s main customers include large international automotive corporation such as US-based Ford and German-based Volkswagen. 

Xinyi’s investment project in Batam is its second in Indonesia. Last year, Xinyi Group started the first phase of its investment for a large-scale comprehensive glass manufacturing base in the JIIPE (Java Integrated and Industrial Port Estate) area in Gresik and spent around $700 million.  

Meanwhile, President Jokowi said the Government of Indonesia was ready to help should the project face any obstacles in the field.  

"I appreciate Xinyi's investment commitment in supporting the downstream solar panel glass industry in Indonesia. I also welcome the start of the Xinyi project. If there are problems in the field, we will fully assist," President Jokowi said in a written statement on Saturday, July 29, as quoted by CNBC Indonesia.