Sapura to expand to Indonesia

Sapura to expand to Indonesia

Malaysia's Sapura Motors, which produces automotive components, plans to set up a seven million ringgit (US$1.84 million) plant in Indonesia this year to take advantage of lower costs there, a report said on Thursday.

With lower tariffs under the Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA), Indonesia offers better opportunities and synergies to the group, Sapura managing director Mohamad Shah Hussain was quoted by The Star as saying.

"As far as automotive manufacturing is concerned, Indonesia vis-a-vis Malaysia does provide better raw materials cost savings. This would be advantageous not only in the ASEAN Free Trade Area (FTA) but also in terms of cost," he said.

"The initial investment in land and building (for the plant) is seven million ringgit."

Shah said the expansion was in line with Sapura's drive to boost its business. The group is still finalising plans for the plant which would supply products to both the Indonesian and Malaysian automotive markets, he added.

Sapura supplies components such as transmission and brake systems, suspension parts and steel bars to national carmakers Proton and Perodua. It is also an original equipment manufacturer for among others BMW, Mercedes, Ford, Isuzu and Volvo.