US lighting company Alpan joins an exodus of manufacturers leaving China to get around higher tariffs from trade war

Alpan Lighting Products, a US manufacturer of solar lamps, is shifting production from China to Indonesia, joining droves of companies looking to escape higher tariffs triggered by the trade war with the US.

PT CDS Asia, a unit of Alpan, will invest US$14 million to build a factory in an industrial zone in Central Java, Indonesia’s Investment Coordinating Board said in a statement. The export-oriented facility is scheduled to begin production later this year and may employee 3,500 people, it said.

Alpan decided to move its factory from Xiamen because of a 25 per cent tariff on exports, compared with zero charges in Indonesia, the board’s investment promotion officer, Ikmal Lukman, said in the statement. The US company is among seven foreign businesses relocating from China to Indonesia, with a combined investment of US$850 million, according to the board.

Indonesia is trying to attract companies seeking to relocate from China after Southeast Asia’s largest economy was overlooked by firms shifting during the peak of the US-China trade war. President Joko Widodo this week promised potential foreign investors a hassle-free approval process and inexpensive land, gas and other facilities if they chose to move there.

Jokowi, as the president is commonly known, has ordered officials to ensure there was no repeat of companies bypassing the country as they did a year ago during the seismic shift in global-supply chains triggered by the trade spat. None of the 33 global companies that relocated from China chose Indonesia, the president cited a World Bank study as saying.