Astra, LG to up investment for business expansion
Astra, LG to up investment for business expansion
The Jakarta Post, Jakarta
Japanese car manufacturers Toyota Motor Corp. and Daihatsu Motor
Co. Ltd. and Korean electronics producer LG Electronics Inc. plan
to increase the production capacity of their Indonesian plants by
upgrading their investments, a minister says.
"The two car manufacturers, through PT Astra Daihatsu Motor
(ADM), will invest US$70 million by December 2005 to increase
production capacity," Minister of Industry Andung Nitimihardja
said on Thursday.
ADM has invested $10 million in the first phase of the
expansion of its plant in Sunter, North Jakarta. With the
expansion, the plant will have an annual production capacity of
114,000 units and will employ 700 more people.
After the second phase of the expansion, scheduled for
December 2005 through March 2007, the plant will be able to
produce 150,000 units annually and will employ an additional
1,500 people.
The company is currently operating with a workforce of 4,500.
The planned expansion, Andung said, was a response to growing
market demand for 1,000 cc and 1,500 cc vehicles.
ADM exports 3,200 units of completely knocked down Avanza to
Malaysia each month and hopes to increase this figure to 4,500
units per month.
The Avanza is a joint project between Daihatsu and Toyota,
through its vehicle Xenia. It was introduced in 2003 to the
Indonesian market to meet demand for affordable multipurpose
vehicles.
ADM also plans to export between 600 and 800 completely built
up cars, both the Avanza and Xenia, to South Africa, Mexico and
the Philippines.
"We hope the investment will have a multiplier effect on
supporting industries," Andung said.
He added that the long-term investment showed the country's
business climate had improved.
Andung also mentioned another planned investment of $15
million by Korean electronics manufacturer LG, through its local
arm PT LG Electronics Indonesia.
He said LG planned to increase the annual production capacity
of its refrigerator plant in Tangerang, west of Jakarta, from
840,000 units to 1.6 million units.
However, the company is first seeking improvement in the
country's infrastructure.