PT Udatin builds assembly plant

SURABAYA (JP): PT Udatin, the would-be assembler of Timor cars, began building its new assembly plant yesterday near Surabaya's Tanjung Perak port.

Udatin chief commissioner Fritz H. Eman said the assembly plant would cost around US$30 million to build.

He said the company would produce around 36,000 cars a year, beginning August 1997.

"All of the car components will be supplied by Timor's manufacturing plant in Cikampek (West Java)," he said at a ceremony to launch the project.

Udatin, an Udatinda Group subsidiary, is one of companies licensed by PT Timor Putra Nasional to assemble Timor cars.

"The project is the first phase of Udatin's long expansion program," he said. "In the second phase, the company will invest another $20 million to further increase its assembly capacity."

The government granted in February pioneer status to Timor Putra to produce a national car with Kia Motors of South Korea, an exclusive arrangement that will give the company a series of tax breaks, including exemptions from import duties and luxury taxes.

The tax incentives, which will last three years, will enable the company to sell its products for half the price of Japanese makes of the same class (with 1,600cc engines).

Timor Putra plans to import all car components from Kia Motors before its own factory opens.

Udatin plans to assemble the cars, while the engines and other components are to be manufactured by Kia Timor Motor, which is building a manufacturing plant in Cikampek, West Java, with an investment of $260 million. (25/hen)