LG CNS, Indonesia’s Sinar Mas to form joint venture for DX push

South Korean IT solutions provider LG CNS said Thursday it has agreed to establish a joint venture with one of the largest conglomerates in Indonesia to strengthen digital transformation innovation in the 16th largest economy in the world.

Under the agreement, LG CNS and Sinar Mas Group will set up a 50-50 joint venture in the latter half of this year to promote consulting, construction and operation for data center services and cloud conversion services, targeting Indonesian companies and public institutions.

Established in 1938, Sinar Mas has engaged in business across seven industries, including energy and infrastructure, communication and technology, finance, real estate development, pulp, agriculture and health care.

LG CNS said the upcoming joint venture will mark the first of its kind for the company to establish in Indonesia. Through the joint venture, the two sides aim to secure a bigger footing in various sectors of Indonesia’s IT service market, from smart cities and financial IT to data centers and cloud businesses.

For the joint venture, the Korean IT solutions provider will transfer the technical expertise and business capabilities accumulated in the data center and cloud business, while Sinar Mas will seek to discover new business opportunities there.

According to research firm Gartner, the Indonesian IT service market is expected to grow at an average annual rate of 23 percent from 4.2 trillion won ($3.12 billion) in 2023 to 9.4 trillion won in 2027.

“Based on our DX technology capabilities, we will further expand our Indonesian DX business area through strategic cooperation with Sinar Mas,” said LG CNS CEO Hyun Shin-gyoon.

"Together with a strong partner in LG CNS, we look forward to building Indonesia’s leading technology platform to propel the country’s economic development and create a sustainable business for both partners,” said Sinar Mas Group Chairman Franky Oesman Widjaja.