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T Denso Indonesia, a joint venture between Denso International Asia Pte. Ltd. and PT Astra Otoparts, plans to build a new plant for automotive components in Indonesia with an estimated investment of about US$200 million.

The construction of the plant, which will be the third facility operated by the firm and located in Bekasi Fajar Industrial Estate in Bekasi, West Java, will start in November this year, Astra Otoparts’ commissioner Johnny Darmawan said on Tuesday in Jakarta.

“Denso of Japan has decided to make Indonesia its production base to expand its supplier network here in line with the government’s plan to boost local production,” he told reporters after meeting with Industry Minister MS Hidayat at the ministry’s office, along with Japan-based Denso Corporation executive vice president Koji Kobayashi and executive director Mashiko Ito.

The plant, set for commercial operations in 2014, will produce a wide range of automotive components, particularly for local automakers, Johnny said.

PT Denso Indonesia is 63.8 percent owned by the subsidiary of Japan-based Denso Corporation. It is responsible for the Asia and Oceania operations and is 25.7 percent owned by the auto parts arm of Indonesia’s diversified group PT Astra International.

At present, the firm operates two plants in Sunter, North Jakarta and Bekasi, West Java, which manufacture various kinds of automotive components, such as air conditioners, radiators, spark plugs
and filters for major local vehicle makers, including PT Astra Daihatsu Motor (ADM), PT Toyota Motor Manufacturing Indonesia (TMMIN), PT Astra Honda Motor (AHM), PT Honda Prospect Motor and PT Suzuki Indomobil Motor (SIM).

It also sells its products, such as spark plugs, radiators and compressors, overseas, including to Japan, the United States and European countries.

In the past few years, Indonesia has seen a massive inflow of investments totaling billions of dollars from the world’s automotive giants, including Toyota, Daihatsu and Honda, all expecting to benefit from the country’s automotive boom due to its stable economic growth.

During the January-July period this year, car sales rose by 25.86 percent to 637,778 units from a year earlier, according to statistics from the Indonesian Automotive Industry Association (Gaikindo), and local business players expect the figure to break the 1-million mark at the end of the year.

Along with the jump in sales, imports of vehicles and components also surged by 45.29 percent in the first half of this year to $4.94 billion from last year. This figure represented 6.58 percent of total non-oil and gas imports during the given period.

The Industry Ministry expects that the output of the new plant will significantly substitute imports of automotive components once it starts operations in 2014.

Another automotive component maker, PT Unipres Indonesia, which is a joint venture between Japan-based Unipres Corporation, Marubeni Corporation of Japan and Indomobil Group’s subsidiary PT IMG Sejahtera Langgeng, will begin operations at its plant in Cikampek, Purwakarta, West Java at the end of this month.

The company will produce automobile chassis and bodies for local automakers.