Japan and Singapore firms join Great River project

JAKARTA (JP): Toyobo Co. Ltd, a major Japanese cotton producer, PT Great River of Indonesia and Tung Mung International of Singapore agreed here yesterday to establish a joint venture to produce textile products.

The new joint venture, PT Toyobo Knitting Indonesia, will soon set up a knitting plant in Kerawang of West Java with a production capacity of around 250 tons per month.

Minoru Shibata, the president of Toyobo, said the joint venture will invest around US$25 million for the establishment of the knitting plant.

He said the new company, 60 percent owned by the Japanese firm, 32 percent by Great River and another eight percent by Tung Mun, is expected to begin commercial production early next year.

"Around half of the joint venture's production will be exported," he said, adding that most of the raw materials for the knitting plant will be supplied by local companies.

Sunyoto Tanudjaya, Great River's president, said the new joint venture with Toyobo and Tung Mung is his company's fourth joint operation with foreign companies.

He said that Great River, which produces garments under licenses from 30 international brands such as Triumph, Kenzo and Arrow, will also form another joint venture with another Japanese company in the next couple of weeks.

"The MOU agreement for the joint venture has been signed but the Japanese firm is still reluctant to publicly announce the deal," he said, adding that the planned joint venture will establish a sock factory with a total investment of around $10 million.

Great River, which is listed on the Jakarta and Surabaya stock exchanges, booked a sale turnover of around Rp 67.47 billion (US$32.12 million) during the first six months of this year and registered a net profit of around Rp 5.5 billion in the same period.

Minoru said Toyoba would soon establish another joint venture with PT Adetex to take advantage of the growing business opportunities in Indonesia.

He said that the planned joint venture, Toyobo Export Indonesia, will operate in general trading activities. (hen)