U.S. cities considered for IPTN's plants
U.S. cities considered for IPTN's plants
JAKARTA (JP): President Soeharto is considering Mobile in Alabama or Macon in Georgia as the site for the new PT Industri Pesawat Terbang Nusantara (IPTN) assembly plant in the United States, State Minister of Research and Technology B.J. Habibie said here yesterday.
"After consulting with experts from the United States, the President has narrowed down the choices of potential sites for IPTN's investment to either Mobile in Alabama or Macon in Georgia," Habibie, also IPTN's president, told reporters after a four-hour meeting with Soeharto at the Bina Graha presidential office.
"The final decision will be reached in April," he said, adding that he is now studying various procedures on labor, the environment and infrastructure in the two cities.
IPTN is planning to invest at least US$12 million to construct its N-250 propeller aircraft in the United States, a move intended to capture the North and Central American markets for commuter aircraft.
Habibie recently said that five states were interested in becoming the site for IPTN's ambitious project, including Arkansas, Oregon, Alabama and Utah.
"In order to build N-250s in the United States, IPTN has planned to set up a joint-venture company called the American Regional Aircraft Industries, in which IPTN will hold 40 percent of its total common shares," Habibie said, adding that several foreign aircraft manufacturers and banks have shown interest in becoming partners with IPTN.
He said that the N-250, which can accommodate 70 passengers, will be priced at $13.5 million each.
The minister said that he is confident with this project because the "N-250 will be built with 1990s technology."
"The only competitor that IPTN has in constructing this type of aircraft is Aeorospatiale of France, whose technology is not as recent as ours," he said.
Difficulties
The minister also conceded yesterday that IPTN's main hurdle to export its products is the fact that it cannot give its potential consumers export-credit facilities.
"This is one of our most serious handicaps because no one pays cash when buying aircraft," he said.
By investing directly in the United States, IPTN will overcome the handicap, he said.
Habibie explained that he has projected, based on the most conservative assumptions, that 225 commuter aircraft like the N- 250 model will be demanded annually for the next two decades.
"If we assume that we can meet only one third of that demand every year, it means that seventy five N-250s will be sold every year," he said.
Habibie said that IPTN only needs to cover 10 percent of the world demand for commuter aircraft like the N-250 to break even. (hdj)