Jakarta. Sharp Electronics Indonesia, the local subsidiary of the Japanese electronics giant, has started constructing an air conditioner factory in Karawang, West Java, on Thursday, setting up a new export base for the Southeast Asia region.
The company said it has set aside Rp 582 billion ($40.5 million) in investment for the new plant, which would take up 3.5 hectares of land at Karawang International Industrial City (KICC). Sharp expected the new factory would be ready for operation at the beginning of next year, with a production capacity of between 900,000 and 1.05 million AC units per year.
"With this AC factory, we are optimistic that we can increase our market share by 30 percent and maintain our first position in the AC market in Indonesia," Shinji Teraoka, the president director of Sharp Electronics Indonesia, said in a statement on Friday.
Also, Sharp promised to "build a stable supply chain network, not only for Indonesia but also all the Asean markets," Teraoka said.
Minister of Industry Agus Gumiwang Kartasasmita said Sharp's investment would help Indonesia develop its manufacturing industry and reduce electronics imports.
"The realization of this investment is in line with the government's efforts, which are currently very serious in managing and improving the industrial business environment," Agus said.
Today, the ministry data showed that Indonesia imports around $25 billion worth of electronics and $13 billion components every year. AC was one of the products contributing to the imports, as many of its parts, including the compressor, are not available in Indonesia, Agus said.
According to the ministry data, Indonesia spent $495 million to buy ACs from abroad last year. Agus said he hoped Sharp could help reduce that figure in the future.
"I believe the Indonesian market is quite attractive. For this reason, I advise Sharp to consider investing in compressors or invite partners who have been supplying them to invest in Indonesia," Agus said.
Responding to the minister's request, Teraoka said the company would like the government to provide more incentives to allow for such investments.
Sharp has been developing Indonesia as its new base for manufacturing in the past few years. In 2019, the company moved its top-loading washing machines production from Thailand to Indonesia.