PT SCM to export Kanzen to Vietnam

PT SCM to export Kanzen to Vietnam

JAKARTA (JP): PT Semesta Citra Motorindo (SCM), the producer
of Kanzen motorcycles, plans to export part of its engine
production to Vietnam.

SCM chief commissioner Rini M.S. Soewandi said last week that
Vietnamese buyers were committed to buying about 1,000 Kanzen
motorcycle engines worth US$150,000 per month.

"Vietnam's demand for motorcycles reaches 1.2 million units
while local production can only provide 400,000 units. The rest
are supplied by China," Rini said as quoted by Bisnis Indonesia.

She was speaking to reporters following the signing of an
agreement between SCM and PT Surya Sarana Utama for the
distribution of Kanzen motorcycles in Yogyakarta. She added that
Vietnam's large market was promising as there was the potential
for local motorcycle component producers to take advantage of it.

As an initial step, they would export engines, but over the
next year they would start to export completely built up
motorcycles, she added.

Rini, who owns a 60 percent stake in the company, said she
felt optimistic that her company's engines would be able to take
advantage of the ASEAN Free Trade Area (AFTA) agreement, which
comes fully into effect in 2002.

Under the AFTA scheme, tariffs on imports from within the
Association of the Southeast Asian States (ASEAN) member
countries should be lowered to between zero percent and 5
percent.

Rini said her company would start to supply the Vietnamese
buyers through its plant in Karawang, West Java, which is now
under construction. The new plant has the capacity to assemble
about 3,000 motorcycles per month.

SCM, which uses the Kanzen brand name for its motorcycles,
currently has the capacity to produce about 1,500 motorcyles per
month.

Production capacity would be increased to 5,000 units per
month by the end of this year, Rini said. (03)