Toyota Astra opens new Rp 500 billion plant

JAKARTA (JP): Car manufacturer PT Toyota Astra Motors inaugurated on Thursday its Rp 500 billion (US$64 million) plant located in Karawang, West Java.

Toyota Astra president Rudyanto Hardjanto said the preparations for the construction of the plant, its second after the one in Sunter, North Jakarta, started in 1995.

"The second plant will exclusively produce passenger cars and will enable all the processes right up to the final assembly phase," Rudyanto said in his speech during the opening ceremony.

The company's first plant was built in 1974 in the Sunter area of North Jakarta, with an annual production capacity of 100,000 units.

The Karawang plant, which has a production capacity of 30,000 units per year, will focus its production on Toyota Astra's recently launched Soluna line, the company said.

Toyota Astra, a joint venture between the widely diversified Astra International and the Japanese Toyota Motor Corporation, said this factory would produce 600 units of the Soluna per month.

Aside from the Soluna, it will also produce the Camry and Corolla lines, with a monthly output of 70 units and 300 units respectively.

The factory produces 30 percent of the car components for the Soluna, while the rest is imported.

Toyota Astra finance director Johnny Darmawan said the plant was jointly financed by the Toyota Motor Corporation, which came up with 49 percent of the funding.

Johnny said 60 percent of Toyota Astra's investment share was financed by overseas loans from several banks.

The remaining 40 percent, he said, came from the company's own funds.

"This has always been our investment policy, 60 percent in loans and 40 percent self-funding," Johnny said.

He said the company initially expected the factory to make a profit in the next three to four years.

"But we should start seeing profits two years from now," he said, adding that it was due to the surge in domestic car demands.

The company had earlier estimated its car sales this year to reach 72,000 units from 26,500 last year.

The company is renowned for its Kijang minivan, which dominates the minivan market with 36 percent.

Johnny said the Karawang plant was built in 1995 on the prediction that car sales would continue to rise in 1997.

However, he said, the economic crisis in 1997 surprised them and sales unexpectedly plunged before slowly recovering last year.

He said when the factory was completed in 1997, production had been very slow and was limited only to the Corolla and Camry lines.

"We practically worked two or three days a week," he said.

Toyota Astra Karawang plant director Widodo Eko Rijanto said with the growing demand in the domestic market, there were no export plans yet for this factory.

However, he said, if the opportunity arose, the plant could quickly expand its production capacity to 50,000 units per year.

"The expansion will require only minor investments," Widodo explained.

He added that Toyota Astra could expand its Karawang plant to produce a maximum of 200,000 units a year.

The Karawang plant, which currently employs 447 workers, integrates five different facilities for stamping, welding, painting, assembly and parts painting.

Meanwhile, vice president of PT Astra International Aminuddin said its subsidiary, the automotive division, contributed some 75 percent to Astra's revenue.

Astra, which restructured $1 billion and Rp 1 trillion in debts last year, will pay Rp 500 billion for its debts which are due this year, he said.

"We will pay the debt with our operational funds," he said.

The company earlier estimated exceeding last year's net profit of Rp 808 billion this year, given the increasing positive trend in automotive sales.(bkm)