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apan-based battery manufacturer Furukawa Battery Co. Ltd. has earmarked US$20 million in an initial investment as part of its expansion plans in Indonesia amid robust growth in the automotive market.

In Indonesia, Furukawa is working with PT Central Sole Agency, a subsidiary of automobile distributor PT Indomobil Group, to capitalize on the strengthening automobile market in the country.

The joint venture has resulted in two companies, PT Furukawa Indomobil Battery Manufacturing (FIBM) and PT Furukawa Indomobil Battery Sales (FIBS).

Furukawa holds 51 percent ownership of the joint ventures with the remaining 49 percent owned by Indomobil.

As part of the deal, Furukawa'€™s line of auto batteries will be used in all cars manufactured and distributed by Indomobil, which currently operates around 8,000 distribution outlets nationwide.

At present, Furukawa is developing a production plant in Purwakarta, West Java, which the company says will be completed in the middle of the year.

'€œAfter the completion of the factory, the main focus will be on the domestic market. We will assess the domestic market first before considering exporting [our products],'€ FIBS president director Andreas Dhanu Sugih said on Tuesday.

The Purwakarta plant is expected to employ up to 300 workers.

Meanwhile, FIBM director Shinichiro Ota said that the company'€™s move to enter the Indonesian market was due to the robust state of the Indonesian economy.

He added that the demand for automotive products in Indonesia, among the highest in Asia, was also another consideration.

'€œWe see a lot of potential for growth in this market, especially due to the increasing demand in the automotive industry,'€ Ota said on Tuesday.

FIBM president director Shunji Ishizaki added that the factory would produce Furukawa'€™s battery products, although no new type of battery would be launched this year.

Furukawa Battery produces batteries for cars, motorcycles, aircraft, power plants, construction machinery, public transportation systems and spacecraft.

It is part of the larger Furukawa Group.

Indonesia is the company'€™s second production hub in Southeast Asia after Thailand. Currently, the company holds the top market share for automotive batteries in Thailand, at 33 percent.

Furukawa is targeting total sales of $100 billion by the year 2017.

Automotive sales in Indonesia have put in a solid performance recently, as shown by data provided by the Indonesian Automotive Industry Association (Gaikindo), which reports that auto sales figures in 2013 were the highest in the history of the Indonesian car industry, driven as they were by the country'€™s annual economic growth of 5.5 percent.

Gaikindo data suggests the increasing demand is set to continue with sales of 1.13 million units between January and November of 2013, higher than 2012'€™s total yearly sales figure of 1.11 million.

According to an earlier report, Gaikindo chairman Jongkie D. Sugiarto estimated that vehicle manufacturers would produce up to 1.2 million units for sale in 2014. (dyl)