Government Officials: Foxconn's Indonesian Factory To Start Production December 2012

After strong speculations and rumor, Taiwan-based electronic manufacturing company Foxconn is finally set its first factory in Indonesia located 68 kilometres outside Jakarta in Cikande area. Trading Ministry officials said Foxconn will start its production line October December 2012 and ready to produce 3 million phones in its initial phase.

The $10 billion investment by Foxconn put for its Indonesian expansion is to fulfil domestic market demand, with only small portion of its production will be exported. Trade Minister, Gita Wirjawan added that Foxconn will produce 10 million phones and other electronics in the next 2 years.

Foxconn is said to have partner with local electronics manufacturers, including PT Hartono Istana Teknologi, a major manufacturer of consumer electronics products under the Polytron brand; state-owned cellular network developer PT Industri Telekomunikasi Indonesia (INTI); and PT Telekomunikasi Indonesia (Telkom), Indonesia’s largest telecommunication provider, for possible cooperation.

According to PT INTI Director, Tikno Sutisna, “We are trying to establish partnership in manufacturing electronic and telecommunication devices, we are still to meet and negotiate with Foxconn". Sutisna is aiming to partner with Foxconn to manufacture tablet devices for medium-end market, supplying the growing domestic demand of smartphone and tablets.

"Foxconn has 33 factories spread all over China. In Indonesia, we're trying to convince them to open at least 6 factories inline with our Economic Development Acceleration Master Plan", said Wirjawan. He also added the strong probability for Foxconn to go beyond Java and open their next factory in Sumatera or Kalimantan (Borneo).

The second phase of Foxconn's investment will start July 2013, said Wirjawan.

Indotelko notes an interesting phenomenon, where almost 100% updates about Foxconn's activity in Indonesia is publicised by Indonesian government, Ministry of Trade in particular. Foxconn has no say in this, which leaves a lot of sceptics thinking that this is just Foxconn's strategy to send a message to its competitors, which is not that much, really.

In a nutshell, Indonesia gets infrastructure, labor acquisition and of course tax while Foxconn is expanding their market to Indonesia and getting cheap labours while they're at it. It's a win-win situation for both Indonesia and Foxconn. Well to be honest, it does more for Indonesia than anything else. Which is good.

correctionheadline and content updated :factory completes in October, production line starts December.

sources:

The Jakarta Post

Indotelko

Fox Business