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Denso Indonesia to Boost Auto Parts Production With Third Plant

GroundBreaking DENSO 3rd plant

3 December 2012

Denso Indonesia has kicked off construction of its third factory in Indonesia, as the auto parts producer — the local unit of Japan’s Denso Corporation — aims to boost production to meet rising domestic demand.

The new factory is expected to cost $110 million and will be built in the Bekasi Fajar Estate, part of the MM2100 industrial park in West Java. The plant will produce various spare parts for cars for the local market.

“We expect this factory to also help boost Indonesia’s economy, through increasing investment and absorption of labor,” said Akio Shikamura, a senior executive at Denso, on the sidelines of the kick-off ceremony for the factory in Bekasi.

He was confident that Indonesia will be a fast-growing market in Asia.

The factory will be built on 20 hectares of land and is scheduled to be operational in February 2014. It will produce air conditioners for cars, engine electronic control units, variable cam timing, alternators, starters and other parts.

Industry Minister M.S. Hidayat, who attended the ceremony, said he appreciated Denso’s work in Indonesia. He said the new plant will absorb 1,700 workers. “That’s not including absorption of the sub-component industry, or the second tier of the business,” he said.

Denso, of which its biggest shareholder is Toyota Motor, currently operates two factories in Indonesia, in North Jakarta and Bekasi, through its local unit Denso Indonesia. The first factory has been producing components since 1978 and the second plant since 1996.

Among Denso’s clients are big names in Indonesia’s automotive industry including Toyota Motor Manufacturing Indonesia, Astra Daihatsu Motor, Honda Prospect Motor, Nissan Motor Indonesia and Astra Otoparts.

Johnny Darmawan, the president director of Astra Otoparts, said Denso Indonesia will address the challenge for the high need for auto parts in Indonesia. He said such investment by Denso will boost the availability of locally-made parts to be used in auto manufacturing in the country.

The head of Denso, Nobuaki Katoh, also attended the ceremony, along with the president director of Denso Indonesia, Yutaka Yamanouchi.

Source: The Jakarta Globe