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)