Glassware producer Kedaung to build factory in Mexico

JAKARTA (JP): Publicly listed glassware producer PT Kedaung Industrial plans to build a glassware factory in Mexico at a total investment cost of US$150 million.

Kedaung president Probosutedjo -- the half brother of former president Soeharto -- said on Friday the investment in Mexico was aimed at helping the company penetrate the United States and Latin American markets.

"The development of the factory in Mexico is part of the company's business strategy of bringing the producer and consumers closer together," Probo told Antara news agency in Serang, West Java, where he oversaw the opening of Kedaung's 17th factory.

Probo said if Kedaung did not move fast in building a factory in Mexico, its competitors would likely beat them into the country.

Mexico, Probo said, has better quality raw materials for glassware than Indonesia does. In addition, it is part of the North American Trade Agreement, which also includes the United States and Canada.

Probo said the United States and Canada imported a large amount of glassware from Kedaung because "importing our products is three times cheaper than making it themselves in their own countries".

Probo also said that Kedaung recently received a $3 million order from Israel, which comes on the heels of President Abdurrahman Wahid's announcement that he wished to open trade ties with the Jewish state.

Meanwhile, Mexican Ambassador to Jakarta Sergio Lopez said Mexico was a good location for Kedaung to reach markets not only in North America and Latin America but also in Europe, as Mexico has a free trade agreement with several European countries.

He acknowledged that labor costs in Mexico were more expensive than in Indonesia, but "they have better productivity".

Probo also said Brazil had invited Kedaung to invest in their country. (rid)