Indomobil boosts capacity amid growing demand

JAKARTA (JP): PT Indomobil, the automotive division of the Salim group, is increasing its production capacity to anticipate a growing demand for cars and motorbikes on the domestic market,

Company president director Soebronto Laras said yesterday the company had invested US$170 million over the past two years to increase the capacity of its Suzuki manufacturing plant in Tambun, West Java, and Cakung, East Jakarta, to 80,000 cars and 500,000 motorbikes this year, from 60,000 cars and 300,000 motorbikes last year.

"We'll continue increasing the capacity of the Suzuki plant to 120,000 cars and one million motorbikes," he said.

Soebronto projected the sales of cars in Indonesia to increase to 400,000 vehicles this year from 320,000 last year.

Sales would further increase in the coming years following the growth in the country's economy, he said.

Indomobil controlled between 20 percent and 22 percent of the domestic market.

Soebronto said that to support the expansion in Suzuki's production lines, Indomobil had developed nine factories to manufacture automotive components in its new 200-hectare automotive integrated estate in the Bukit Indah area, Cikampek, West Java.

The investment for each component factory was between $10 million to $15 million, he said.

"The nine component plants are now in trial production. The products will be sold on the domestic market as well as exported to Southeast Asian countries, especially Thailand, and Japan," he said.

Indomobil, in a joint venture with Japan's Sumitomo group, is also developing a $120 million Dunlop tire factory at the Bukit Indah automotive estate, with an annual production capacity of 1.2 million tires.

Soebronto said the car tire manufacturing unit was now in trial production, while the unit which would produce motorbike tires was still under construction.

"About 30 percent of the tires will be exported," he said at the public expose to announce the plan of Indomobil's subsidiary, PT Swadharma Indotama Finance, to issue a Rp 150 billion bond.

Indomobil has also developed a car factory to produce such brands as Audi, Volvo and Sangyong, and is developing a $40 million factory to manufacture Hino buses and trucks at Bukit Indah.

The company will also produce golf balls for export at the same complex, he said.

PT Swadharma, a finance company which provides consumer credit for the buyers of Indomobil products, announced yesterday it would issue a six-year Rp 150 billion bond on the Surabaya Stock Exchange with an interest rate of about 1.5 percent a year.

Company president director Stefanus Herdianto Karmadi said the lead underwriters of the bonds were PT BT Prima Securities and PT BNI Securities.

Stefanus said the company had lent out Rp 2.6 trillion since it started operation in 1986 and had recorded Rp 12.33 billion in net profit last year, up from Rp 8.98 billion in 1995. (jsk)