Honda opens two new RI plants
Honda opens two new RI plants
Rendi A. Witular, The Jakarta Post, Karawang, West Java
Japan's second largest automotive company Honda Motor Co.,
Ltd., officially opened on Thursday two new plants in Karawang,
West Java, raising new hopes that some still considered the
country an attractive investment destination.
Visiting Honda president Takeo Fukui said the company had
decided to establish the plants in Indonesia because it believed
that the country would become a major player in automotive spare
parts production in the region.
"We are talking about long-term prospects. I know that there
are security concerns here, but I believe they will not last
long," Fukui told press following the opening ceremony.
He explained that the plants were part of Honda's attempt to
establish a highly efficient and flexible global network for
production and parts procurement, making the best use of the
competitive strength of its plants located in different regions
in the world.
However, Honda's Chief Operating Officer for Asia and Oceania
Satoshi Toshida told The Jakarta Post that it would really hamper
efficiency if its local operation faced disturbances as occurred
two years ago when workers staged a massive strike.
"We expect this kind of situation will not happen again," said
Toshida.
Budi Setiadharma, president of PT Astra International,
Indonesia's largest car marker, welcomed the new investment made
by Honda, urging the government to use this momentum to further
improve the investment climate to attract more international
money in the automotive industry.
Foreign direct investment in the country has plunged since the
late 1990s economic crisis. The recent improvement in the
country's macroeconomic indicators has not translated into higher
investment activities due to lingering problems in other areas
such as legal uncertainty, labor disputes, corruption, lack of
productivity and poor implementation of the regional autonomy
policy.
The government is now under pressure to increase investment to
help push economic growth higher to resolve the exploding
unemployment problem.
Honda's two new plants are located in Bukit Indah Industrial
Park, Karawang --about 70 kilometers southeast of Jakarta. Honda
has invested a total of US$134 million to set up the plants and
has employed around 3,000 workers.
One of the plants, PT Honda Precision Parts Manufacturing, is
Honda's first sophisticated automatic transmission and engine
valve manufacturer established outside of Japan or the United
States.
Fukui said that automatic transmissions were one of the most
sophisticated components of an automobile and they required
advanced technologies and human resources.
"We believe that Indonesia is capable of producing such
products. That is why we decided to put our trust in this
country," he said.
The new plant is expected to achieve an annual production
capacity of 250,000 automatic transmissions and 550,000 engine
valve sets in 2004.
The transmission and valve products will be mostly supplied to
Honda's automobile plants within the South East Asia region and
Europe.
The other new plant is called PT Honda Prospect Motor, which
will assemble three of Honda's models --the Civic, the CR-V and
the Stream.
Indonesia is the only country outside of Japan that produces
the Stream minivan.
The plant, which has been operating for several months, has a
current production capacity of 20,000 units per year, but the
capacity is targeted to reach 40,000 units in 2004, and will
mostly be allocated for the export market.