Minister says Sanyo set to increase investment in Indonesia

The Jakarta Post, Jakarta

Defying concerns of a possible layoff here, an Indonesian unit of global electronic producer Sanyo Co. plans to invest more in Indonesia and has set aside US$20 million for expansion, says a minister.

Minister of Industry Andung Nitimihardja confirmed on Monday the plan at a press briefing, following an earlier meeting with top executives of four Sanyo Indonesian subsidiaries here.

"This November PT Sanyo Indonesia, one of the four Sanyo companies here, will invest $20 million to boost their production," Andung said.

The statements came after a recent report published by a Japanese newspaper Nihon Keizai Shimbun saying that the Japan- based company plans to dismiss no less than 10,000 of its employees worldwide, as part of its cost-cutting measures. The plan is linked to the company's huge loss last year, which stood at $1.55 billion, the report said.

The reports sparked rumors that there would be layoffs here in Indonesia, where four Sanyo companies are located.

Sanyo, on the contrary, says it would remain committed to Indonesia as demand for its products here remain high despite the emergence of new players in the industry. In fact, according to Andung, all the four companies felt they had to increase their production capacity just to keep up with the demand.

Sanyo's Indonesian units are PT Sanyo electronics Indonesia, PT Sanyo Indonesia, PT Sanyo Jaya Components Indonesia and PT Sanyo Energy Indonesia.

Earlier on Monday, Andung met with Kunimura Saburo, president director of PT Sanyo Jaya Components Indonesia; Sawada Soichiro, director of PT Sanyo Electronics Indonesia; Akihiro Otsuka, director of PT Sanyo Indonesia and N.B. Antara, deputy head of PT Sanyo Electronics Indonesia.

During the meeting, Andung said, the executives complained about the report, claiming it was false as no official statements had been given regarding the issue by the Sanyo headquarters.

Not only that, there was even a plan to relocate Sanyo investment in China to countries in Southeast Asia.

"They have the option of relocating it either to Vietnam, Malaysia, Thailand or Indonesia," he said.

While the four companies considered Indonesia had a good chance of beating the other countries, concerns remained, Andung added.

"They told me that if the country's infrastructure improved and the government could draw up better policies on tax and labor issues, Sanyo companies in Indonesia will soon expand their business, rather than laying off its employee."

At present, the four companies employ about a total of 10,450 workers. (006)