Malang Regency Government Has the Potential to Hold RI’s Lobby to South Korea Lotte Group

IMPERIUMDAILY.COM-MALANG – The inhibition of the licensing process of PT Lotte Grosir Indonesia in Malang Regency has the potential to confront the promotion efforts undertaken by the Government of Indonesia to South Korea recently. Because one of the groups from South Korea that has committed to further investment in Indonesia is the Lotte group.

During his trip to South Korea and Japan last week, Industry Minister Agus Gumiwang had received an investment commitment. Quoted from a press release from the Ministry of Industry Monday, November 18, 2019, in South Korea, the Minister of Industry received an investment commitment of USD 3.5 billion or Rp.49 trillion (exchange rate of Rp.14 thousand per USD). In more detail, the commitment came from Lotte Chemical.

“The huge investment potential from Japan and South Korea must be guarded, so they are comfortable and this must be done quickly, because this is the speed desired by President Joko Widodo,” Minister of Industry Agus Gumiwang said in his press release.

Related to this matter, PT Lotte Grosir Indonesia Attorney Heri Basuki said, bad news from Malang Regency would clearly affect the Lotte group’s commitment. Because one of the flow of funds from the Lotte group also leads to Lotte Grosir Indonesia. Including those invested to build Lotte Grosir in Malang Regency.

“They (investors) are in a group. If there are obstacles, they must also reach their members. It could be confronting the government lobby. So this is what we regret,” said Heri.

Meanwhile, the investors of PT Lotte Grosir Indonesia actually sent a letter of complaint to President Joko Widodo. The same letter was sent to the Minister of the Interior Tito Karnavian and the Head of the Indonesian Investment Coordinating Board (BKPM) Bahlil Lahadalia.

They hope that the central government will have wisdom regarding the problems faced by Lotte Grosir in Malang Regency. Because one of the obstacles in licensing PT Lotte Grosir Indonesia is the contents of Malang Regency Regulation 3/2012 which prohibits PMA from investing in modern stores.

As previously reported on, the consortium of PT Lotte Grosir Indonesia felt disadvantaged in investing in Malang Regency. Their license to establish a wholesale supermarket in Singosari is stuck at the end of the process. Even though they have completed 90 percent of the licensing process since a year ago.

The main obstacle is Malang Regency Regulation 3/2012 concerning Protection and Empowerment of Traditional Markets and Structuring and Control of Shopping Centers and Modern Stores.

Article 10 paragraph (2) letter (a) of Local Regulation 3/2012 states: The establishment of modern shopping centers and shops must be domestic investment.

In fact, PT Lotte Grosir Indonesia is not pure Foreign Investment (PMA) but rather a combination of domestic and foreign investors.

In a separate place, Head of Malang Regency’s One-Stop Investment and Integrated Services Office, Subur Hutagalung said that PT Lotte’s licensing was under discussion in his service. According to him, the Regency Government must be careful because PT Lotte is a foreign investment.

“We are open with investors. Only Lotte is foreign investment. While in the regional regulation it states that wholesalers and retailers are domestic investments. So we don’t want to break the rules and we are studying and coordinating with the center,” Subur was quoted as saying by Vvanews .com, Tuesday, November 19, 2019. (nusadaily team)

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