Posted on 07 Mar 2015
Denso to kick off operation of third plant
PT Denso Indonesia, a joint venture
between Denso International Asia Pte. Ltd. and PT Astra Otoparts, will
officially launch operations at its automotive components factory, built with
overall investment of
Rp 1.4 trillion (US$107.89 million), next month.
The plant, which is located in Bekasi, West Java, will initially produce 10
kinds of autocomponent, including spark plugs, starters, engine control units
and speed control units, according to director A. Hartoyo. Around 70 percent of
the output generated from Denso’s third facility will be sold in the domestic
market, with the remainder set for export.
“We have secured purchase contracts from our consumers, nearly all of whom are
car manufacturers in Indonesia,” Hartoyo told reporters after meeting Industry
Minister Saleh Husin.
The largest proportion of production would be dedicated to spark plugs, which
can reach 7 million units each month and are to be shipped to countries in
Asia, America and Europe, while other products would follow market demand, he
added.
Denso currently operates two plants in Sunter, North Jakarta, and Bekasi, West
Java, manufacturing a wide array of automotive components, such as air conditioners,
radiators, spark plugs and filters for major two-wheeler and four-wheeler
makers, including PT Toyota Motor Manufacturing Indonesia (TMMIN), PT Astra
Daihatsu Motor (ADM), PT Astra Honda Motor (AHM), PT Honda Prospect Motor and
PT Suzuki Indomobil Motor (SIM).
The company already exports products overseas, including to Japan, the United
States and Europe.
Denso has spent up to Rp 600 billion to develop its new plant since the end of
2012 and further expansion is expected to reach completion by 2018.
Hartoyo said that despite expected slowdown in Indonesia’s car sales this year,
the firm anticipated a rebound in the future, and so would continue its plans
to expand.
“Even if the market weakens, our investment will not stop. We are advancing, so
that when the market climbs, we will be ready to tap into available
opportunities,” he said.
Car sales, an indicator of domestic consumption in Southeast Asia’s biggest
economy, have dipped by 1.8 percent to 1.21 million in the past year, the first
drop in five years after robust annual sales that analysts described as an
“automotive boom”.
Along with shrinking car sales, Denso saw sales of its automotive components
decline by 20 percent last year.
The Association of Indonesian Automotive Manufacturers (Gaikindo) estimates
that vehicle sales will remain at 1.2 million this year on weakening purchasing
power despite falling prices of fuel due to an oil glut in the global market.
Industry Ministry director for land transportation vehicles Soerjono said that
investment in automotive components might slow this year in line with stagnant
growth in auto sales. However, he added, in the long run, sales would still be
robust for low-cost green cars (LCGC).
“That’s why we strongly encourage investors to enter production of components
for LCGC. It is now the most attractive sector and also a global product that
we can export easily,” he said.
The autoparts industry generates a significant multiplier effect, with a firm
like Denso able to absorb supporting materials from 200 to 250 suppliers.
PT
Denso Indonesia, a joint venture between Denso International Asia Pte.
Ltd. and PT Astra Otoparts, will officially launch operations at its
automotive components factory, built with overall investment of
Rp 1.4 trillion (US$107.89 million), next month.
The
plant, which is located in Bekasi, West Java, will initially produce 10
kinds of autocomponent, including spark plugs, starters, engine control
units and speed control units, according to director A. Hartoyo. Around
70 percent of the output generated from Denso’s third facility will be
sold in the domestic market, with the remainder set for export.
“We
have secured purchase contracts from our consumers, nearly all of whom
are car manufacturers in Indonesia,” Hartoyo told reporters after
meeting Industry Minister Saleh Husin.
The largest proportion of
production would be dedicated to spark plugs, which can reach 7 million
units each month and are to be shipped to countries in Asia, America and
Europe, while other products would follow market demand, he added.
Denso
currently operates two plants in Sunter, North Jakarta, and Bekasi,
West Java, manufacturing a wide array of automotive components, such as
air conditioners, radiators, spark plugs and filters for major
two-wheeler and four-wheeler makers, including PT Toyota Motor
Manufacturing Indonesia (TMMIN), PT Astra Daihatsu Motor (ADM), PT Astra
Honda Motor (AHM), PT Honda Prospect Motor and PT Suzuki Indomobil
Motor (SIM).
The company already exports products overseas, including to Japan, the United States and Europe.
Denso
has spent up to Rp 600 billion to develop its new plant since the end
of 2012 and further expansion is expected to reach completion by 2018.
Hartoyo
said that despite expected slowdown in Indonesia’s car sales this year,
the firm anticipated a rebound in the future, and so would continue its
plans to expand.
“Even if the market weakens, our investment
will not stop. We are advancing, so that when the market climbs, we will
be ready to tap into available opportunities,” he said.
Car
sales, an indicator of domestic consumption in Southeast Asials biggest
economy, have dipped by 1.8 percent to 1.21 million in the past year,
the first drop in five years after robust annual sales that analysts
described as an “automotive boom”.
Along with shrinking car sales, Denso saw sales of its automotive components decline by 20 percent last year.
The
Association of Indonesian Automotive Manufacturers (Gaikindo) estimates
that vehicle sales will remain at 1.2 million this year on weakening
purchasing power despite falling prices of fuel due to an oil glut in
the global market.
Industry Ministry director for land
transportation vehicles Soerjono said that investment in automotive
components might slow this year in line with stagnant growth in auto
sales. However, he added, in the long run, sales would still be robust
for low-cost green cars (LCGC).
“That’s why we strongly encourage
investors to enter production of components for LCGC. It is now the
most attractive sector and also a global product that we can export
easily,” he said.
The autoparts industry generates a significant
multiplier effect, with a firm like Denso able to absorb supporting
materials from 200 to 250 suppliers. - See more at:
http://www.thejakartapost.com/news/2015/03/07/denso-kick-operation-third-plant.html#sthash.LuaEli5B.dpuf
