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utomotive components company PT Astra Otoparts (AUTO), part of conglomerate PT Astra International (ASII), has allocated Rp 1.2 trillion (US$123.58 million) for future joint ventures in an effort to expand its business.

The amount is part of the company's 2012 capital expenditure (capex) budget, which is set at
Rp 3 trillion. About Rp 1 trillion of the budget will be used to increase production capacity, Rp 500 billion for the development of new products and the remaining Rp 300 billion for infrastructure, such as IT systems.

Astra Otoparts, a listed company, has specifically allocated some funds for partnership investments as it is in talks with several automotive component makers about the possibility of joint ventures, according to finance director Darmawan Widjaja.

'We are currently in talks with three to five companies. We may not necessarily create new joint ventures, but instead, takeover stakes in other firms,' Darmawan said in Jakarta on Wednesday.

AUTO president director Siswanto Prawiroatmodjo said some of the potential partners include Japanese automotive components companies looking to relocate their businesses to Indonesia.

At the moment, AUTO produces components for both automobile and motorcycle segments.

AUTO's joint venture discussions are in line with a statement made by the Industry Ministry last January about the interest of Japanese businesspeople to bring their businesses to Indonesia.

Budi Darmadi, the ministry's high-technology priority industries chief, said around 50 Japanese automotive component makers would build plants in the country this year at a cost of $700 million, which are part of the $2.4 billion planned investment by overseas manufacturers unveiled in 2012.

Indonesia has attracted sizeable automotive investments from major global manufacturers, such as Japan's Toyota Motor Corporation and Honda Motor Company Ltd., given its status as Southeast Asia's second-biggest automobile market.

As previously reported, Toyota wants to increase the capacity of its two plants in Karawang, West Java, to 250,000 units by 2014. It is also planning to invest Rp 13 trillion for its expansion plans during the next four years.

Darmawan said that AUTO would finance this year's projects using its current internal cash, bank loans and a rights issuance, held this month. It is looking to obtain Rp 2.99 trillion from the release of 963.95 million new shares, priced Rp 3,100 apiece.

Each shareholder will be entitled to 25 new shares for every 100 shares they have now. Besides the capex budget, the proceeds from the rights issue will also be used to pay off bank loans.

Meanwhile, during an annual shareholders' meeting held in Jakarta on Wednesday, AUTO's shareholders gave their approval to the company's dividend payment proposal, which sets the payment at Rp 87 per share, or Rp 429.32 billion in total, 6 percent higher from the previous year.

This year's dividend amount represents 39.8 percent of the company's 2012 net profits, which grew 4.6 percent to Rp 1.05 trillion. The payment is scheduled to take place on May 31.