20 Auto Ancillary Companies to Enter Indonesia

Reporting by Imam Budilaksono Jakarta (Antara) - Twenty auto ancillary companies from Thailand are planning to make a foray into Indonesia due to positive growth in its automotive industry, according to an industry ministry official. "Around 20 auto ancillary companies from Thailand will come to Indonesia. They will set up second plants in Indonesia," Budi Darmadi, the director general of high-tech based industries, remarked here on Monday. He elaborated that the plants will offer benefits such as providing substitutes for imports, increasing added value, taxes, and employment and the use of local raw materials. "We are also exploring companies from Australia. However, if they wish to set up plants here then they must find local partners, and they are now in the process of doing it," he explained. He noted that Indonesia can provide almost all raw materials needed by the industry, including steel sheets. Sudirman MR, the general chairman of the Indonesian Automotive Industries, stated that there had been an increase in the number of auto ancillary units, especially component-manufacturing units, in the country. He remarked that the industries were initially centered in Thailand, but right now, they have started entering Indonesia due to positive developments in the country's automotive market. "Automotive sales have reached more than one million units," he pointed out. He added that Indonesia needs to increase its capacity in providing other raw materials needed for the industry. (*)