Bahlil Announces LG's Replacement Company Has Been Secured, From China

KatadataOTO – Bahlil Lahadalia, Minister of Energy and Mineral Resources (ESDM), revealed that a replacement for LG Energy Solution, which withdrew its investment from Indonesia, has been found. The company is Huayou from China.

The presence of this company is expected to replace the role of LG Energy Solution, which was previously part of the Indonesia Grand Package scheme.

“LG has been replaced by a strategic partner from China, namely Huayou, together with state-owned enterprises (BUMN)," said Bahlil as reported by Antara (23/04).
He also emphasized that the electric vehicle or EV ecosystem development project in Indonesia is still ongoing.

Bahlil also added that a change of investors midway is common for large-scale projects.

Photo : Carscoops

“For us, the most important thing is that all partners remain committed and the government is present to ensure the transition process runs smoothly. The project is already underway, some parts have been inaugurated and have started production, while the rest will continue to be monitored until completion according to the target,” he said.

It should be noted that on December 18, 2020, LG Energy Solution entered the Indonesia Grand Package scheme. It included the development of an integrated EV battery supply chain, from mining to battery production.

However, the South Korean consortium led by LG eventually withdrew from the project valued at around 11 trillion won (Rp130.7 trillion). They were supposed to build a comprehensive electric vehicle (EV) battery supply chain in Indonesia.

The company claimed to have consulted with the Indonesian government and considered various factors. This included shifts in the industrial landscape and a temporary slowdown in global EV demand.

"Considering the market conditions and investment environment, we have decided to withdraw from the project," an official from LG Energy Solution said some time ago.

Photo : Carscoops

The decision was regretted by the Association of Indonesian Automotive Industries (Gaikindo). This is because the automotive industry is currently trying to attract foreign investors to enter and has a fairly large market.

“It's a shame the investment didn't go through, as we are in need of investors for Indonesia,” said Jongkie D. Sugiarto, Chairman I of Gaikindo, to KatadataOTO (21/04).