Conveyor part plant starts production here

CILEGON, West Java (JP): PT Prok Indonesia, a joint venture between Australian and Indonesian companies, yesterday inaugurated its conveyor component production plant here.

"The initial output of the factory is 1,500 idlers a week, consisting of rollers and frames," Brian Knuckey, the operation manager of Australia's Prok Group Limited, told The Jakarta Post.

He said the output will increase to 4,000 rollers a week, or about 144,000 per annum, when all production equipment has been installed.

Neil Mackenzie, managing director of Prok Group, said that Prok Indonesia is the first foreign company to produce conveyor components in the country.

Prok Indonesia, set up in 1990 with an investment of US$35 million, is 70 percent owned by Prok Group, 25 percent by PT Krakatau Industrial Estate, a subsidiary of state-owned PT Krakatau Steel, and 5 percent by PT Ideco Utama, a private company.

"Prok Group is a major producer and supplier of conveyor components in the world, whose competitors are Japanese and German companies," said Mackenzie.

He said Prok Group has so far supplied conveyors to Indonesian cement plants, coal mines and terminals, nickel mines as well as manufacturing companies.

He said that establishing the factory here will make Prok Group's products more competitive.

"It is about 10 percent cheaper to manufacture conveyor components in Indonesia than shipping them from Australia," said Mackenzie.

"It is possible the Cilegon factory will be the major conveyor producer in the world due to the massive labor and raw materials available here as well as the lower costs," said Mackenzie.

Currently some 50 percent of the materials for the new company's production are still imported from Australia.

"The local contents of the products will increase to about 80 percent when the Cilegon factory produces pulleys, the main conveyor components," Mackenzie said.

He said the market outlook in Indonesia is very promising because the surge of investment in infrastructure and industry is creating greater demand for bulk material handling systems.

According to Mackenzie, the factory's output will go mainly to the domestic market.(kod)