Honda to build new plant in RI

Adianto P. Simamora, The Jakarta Post, Jakarta

Japan's second-largest car maker Honda Motor Co. Ltd., said on Friday that it would invest US$64 million in a new spare parts manufacturing plant in Indonesia.

The new plant, to be known as PT Honda Precision Parts Manufacturing, is expected to produce some 250,000 automatic transmission and continuously variable transmission (CVT) products and around 500,000 sets of engine valves a year.

Visiting president and CEO of Honda Motor Hiroyuki Yoshino said here that most of these products would be exported to meet growing demand in Asian and European markets.

"This (investment) is significant because it is the first time that Honda has produced these components in Asia outside Japan, and automatic transmissions are generally recognized as one of the highest-precision automobile components," Yoshino told a media conference.

Yoshino and his top aides from Japan were in Jakarta to mark a breaking-of-the-ground ceremony for the new plant.

The plant, to be located at Bukit Indah Industrial Park, about 70 kilometers southeast of Central Jakarta, will begin production in the middle of 2003, he said.

He predicted that the plant would need to employ over 900 workers when it reached full production.

"In addition to this, five of our Japanese-Indonesia joint- venture parts suppliers will also invest another $55 million in total, creating an additional 1,000 jobs to support PT Honda Precision Parts Manufacturing's operation," he said.

Six months ago, Honda started the construction of an automobile manufacturing plant in West Java.

"Todays's announcement underlines Honda's strong commitment to the long-term development of Indonesia's automotive industry," Yoshino said.

Honda Prospect Motor, the sole agent for Honda in Indonesia, started building a new plant in January in Karawang, West Java, involving a total investment of about $30 million.

The plant is hoped to produce about 40,000 Honda Stream minivans by March 2003. The company also unveiled plans to export its Honda Stream to Thailand.