C

hinese consumer electronics and home appliances firm Haier is expects to start operating a smartphone factory in Cikarang, West Java by the end of this year, with an initial production rate of 200,000 units per month.

Haier'€™s general manager of overseas department, ZZ Wang, said on Monday that his company would pour no less than US$1 million '€” excluding what is needed for land acquisition '€” for the construction of the factory.

'€œThe factory will be our first phone factory in Southeast Asia and the second worldwide after the one in South America,'€ he told The Jakarta Post.

Wang said his firm decided to build a phone factory in this country because of its big market and because his firm is in partnership with local mobile network operator PT Smartfren Telecom.

Smartfren director Merza Fachys said that some of the smartphones to be manufactured at Haier'€™s factory in Cikarang would be for Smartfren.

Smarfren itself had a total of 11.7 million subscribers as of the first half of this year and aims to have around 15 million subscribers by year'€™s end.

Wang said that Haier'€™s Indonesian factory would also manufacture 4G devices to anticipate the utilization of long-term evolution (LTE) technology in Indonesia in the near future.

The country'€™s growing number of mobile subscriptions and increasing mobile data traffic would require a 4G network, he said.

'€œIn addition, Indonesia offers a new market for 4G technology, while the 4G market in the US, China and Japan is already saturated,'€ Wang said.

Indonesia will have the third-highest number of new mobile subscriptions in the Asia-Pacific region by 2019, with as many as 7 million new mobile subscriptions, according to the latest Ericsson Mobility Report.

The report had found that Indonesia had the most mobile subscriptions of any country in Southeast Asia, with 330 million subscriptions last year.

Mobile data traffic in Southeast Asia and the Pacific is forecast to reach more than two exabytes (EB) per month in 2019, from less than the 0.2 EB per month seen last year, the report stated.

Wang said that to tap deeper into the country'€™s telecommunications market, his firm also planned to partner with a number of local cellular operators.

Haier started operating in Indonesia in July 2012 after its global acquisition of Japan'€™s Sanyo Electric Co. Ltd. for a total value of $130 million.

In Indonesia, Haier took over PT Sanyo Indonesia and PT Sanyo Sales Indonesia, both of which became Haier Electrical Appliances Indonesia and Haier Sales Indonesia.

Previously, another East Asian electronics giant, Samsung, announced that it would start building a smartphone factory this year.

The South Korean firm currently has two major mobile-phone factories in Vietnam: one in Bac Ninh province worth $2.5 billion and another in Thai Nguyen worth $1.2 billion.