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T Sharp Electronics Indonesia (SEID), a subsidiary of Japanese electronics manufacturer Sharp Corporation, will build a second factory in Karawang, West Java, to boost production of the company’s main home appliances refrigerators and washing machines, the parent company’s top executive said.

Construction of the Rp 1.2 trillion (US$128.4 million) factory will enable the film to increase the production of refrigerators to 2.64 million a year, while annual washing machine production would be increased 2.5 times to 1.68 million.

“The plant establishment has a great importance to the Sharp group worldwide. The plant will leverage our production capacity and enhance our business in Indonesia ,” Sharp Corporation vice president Toshio Adachi said during a ground breaking ceremony at the plant site in Karawang International Industrial City (KIIC), West Java.

The 31-hectare plant is expected to commence production next year and employee 1,500 workers when it reaches it total production capacity by 2014.

Sharp Electronics Indonesia president director Fumihiro Irie said the Karawang plant would help the firm strengthen its position as a flagship home-appliances producer in the nation, as 80 percent of the plant’s products would be sold in the domestic market.

“In Indonesia, the market penetration for home appliances is still low, at 35 percent for refrigerators and only 10 percent for washing machines” Irie said.

“Looking at the huge potential for market penetration, we expect to provide more and retain our leading position in the upcoming years.”

Competition, however, would heat up as new players entered the Indonesian market, Irie added.

Sharp refrigerators and washing machines had a 36 percent and 32 percent share of their respective markets, he added.

Industry Minister M.S. Hidayat, who was also at the ceremony, said he hoped that the company could increase the local content of its products and build a research and development (R&D) center in Indonesia.

“Looking at such a large-scale production capacity, we consider that it is time for Sharp to have an R&D center here and to provide skills training to its employees,” the minister said.

Hidayat said that Sharp could double the number of local its partners from the current figure of 15 to empower small and medium enterprises.

The firm currently produces televisions, refrigerators and washing machines at its plant in Pulogadung, Jakarta .

The output of the Pulogadung factory comprises televisions (35 percent), refrigerators (32 percent), washing machines (10 percent) and audio devices.

When the Karawang plant enters production, the Pulogadung factory switch focus to making audio-visual devices, particularly LCD TVs, Sharp Indonesia product marketing general manager Herdiana Anita said.

So far, the Tokyo-based firm has invested Rp 1.1 trillion and has 3,773 employees in Indonesia.

Sharp Indonesia, founded in 1970, booked almost Rp 7 trillion in revenues in 2011.

Without revealing sales figures, Irie said that the firm achieved 25 percent growth in the first quarter this year compared to the same quarter last year. (yps)