Lnd | The Jakarta Post | 12 Januari 2011

Jakarta, Januari 12 2011 – At least 18 local and foreign companies have applied for investment permits to produce auto parts and accessories in the country, a senior official of the Investment Coordinating Board (BKPM) has said.

Speaking at a media gathering on Tuesday, BKPM deputy chairman on investment services Teuku Otman Rasyid said the companies planned to set up factories in Bekasi and Karawang, West Java; Tangerang, Banten; Surabaya in East Java and Dumai in Riau to manufacture car components such as engine valves and wire harness connectors.

The 18 investors, which include foreign companies from Japan, the US, Thailand, China and South Korea, plan to invest up to US$957.46 million. According to Otman, out of the 18 investors, 13 had already been issued permits to realize their investment projects soon while the rest are still awaiting approval.

“One of the investors comes from the US and plans to invest up to Rp 1.26 trillion (US$138.6 million) to assemble cars with a capacity of 50,000 units annually. 

The factory will be located in Bekasi, West Java, and is expected to absorb around 700 workers,” Otman said. He, however, refuse to name the US firm.

He said another company from Japan would invest about Rp 6.5 trillion in the expansion of a car engine plant in Karawang, West Java,

“We expect local governments will follow up on our permits so that the investors can realize their projects as planned and can employ local workers,” he said.

Based on BKPM estimation, the 18 investment projects will absorb a total of 7,141 workers.

BKPM recorded that 92 projects in the automotive industrial sector were realized during the first three quarter of 2010, with total investment of $481.41 million.

Eighty-four of the projects worth $448.64 million will be funded by foreign investors, while the remaining eight worth $32.77 million will be financed by local companies. 

Meanwhile, BKPM deputy chairman on investment planning Himawan Hariyoga said total realized investments were estimated to reach Rp 200 trillion, surpassing the initial target of Rp 160.1 trillion.

“We are targeting to attract Rp 230 trillion in investment in 2011, a 15 percent increase from last year’s figure. About 70 percent is expected to come from foreign investors and 30 percent from local investors,” Himawan said.