Apple's AirTag Factory Investment in Batam Lower Than Proposed: Industry Ministry
The Indonesian Ministry of Industry lamented that Apple's actual investment value is lower than the initial proposal figure of US$1 billion.
TEMPO.CO, Jakarta - The Indonesian Ministry of Industry has revealed that 's investment in an AirTag factory in Batam, Riau Islands, is significantly lower than the initial proposal. Spokesperson Febri Hendri Antoni Arif lamented that the actual investment value is only US$200 million, contrary to the previously proposed figure of US$1 billion.
This means, he said that Apple was inconsistent in submitting the investment value. “Based on our technocratic assessment, the true value of Apple's factory investment in Batam is only US$200 million,” Febri Hendri stated in an official statement on Wednesday, January 22, 2025.
This discrepancy arises because the initial proposal included projected export values and the cost of purchasing raw materials, which are not considered capital expenditures (capex). The investment value, Febri explained, is measured only from capex, which consists of the purchase of land, buildings, and machinery/technology.
“By including export projections and raw material purchases, Apple appeared to inflate the investment value to US$1 billion, while the actual capex is only US$200 million," Febri said. “Imagine the number of workers that can be absorbed with an investment figure of US$1 billion, of course, it will be very large.”
Furthermore, Febri revealed that during negotiations on January 7, 2025, Apple inquired about the inclusion of export values and raw material purchases in the capex calculation. The Ministry of Industry's negotiation team clarified that these factors are not considered part of capex.
In addition to the lower-than-expected investment value, Febri warned that Apple may face sanctions for failing to repay a US$10 million investment debt from 2020-2023. This debt was due in June 2023.
The Ministry of Industry has stated that potential sanctions against Apple could include requirements for increased investment capital, suspension of the domestic component level (TKDN) certificate, and revocation of the certification, which would effectively ban the distribution of Apple products in Indonesia.
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