The Sany Group through its subsidiary, Sany Heavy Industry Co Ltd, will invest US$ 200 million to build a heavy equipment plant in the Cikarang Industrial Zone of Indonesia.
“The plan will be completed in the next three months. They have bought 10 hectares there,” Agus Tjahajana, the Industry Ministry’s international industry cooperation director-general, said yesterday.
The plant has targeted the production of 1,000 units of heavy equipment per year and is expected to employ more than 1,500 workers. In this way, Indonesia will become the base for heavy equipment production, mining equipment and construction tools to meet demand in ASEAN, Japan and Australia.
The investment commitment was mentioned in a meeting between Sany Heavy Industry and Industry Minister M.S. Hidayat during the Industry Ministry’s official visit to Zhejiang, China, on April 20-21. Sany will compete with other heavy equipment industries in Indonesia, such as Caterpillar from the US and Komatsu from Japan.
The Sany Group is a multi-national company based in Hunan, China that has previously made investments in the US, Germany, India and Brazil.
The discussion between the Indonesian government and Sany regarding the plant was organized one and a half years ago. Sany chose Indonesia because it is cheaper to invest here than in other ASEAN countries, even China.
The CEO of PT Indobuana Auto Raya, Paulus B. Suranto, said Indonesia should have been able to make a heavy equipment plant in the country because Indonesia has known the automotive industry for a long time, even longer than China.
Responding to Sany Group’s plan to invest in Indonesia, Paulus said Indonesia should make an effort to open its own plant.
However, Paulus welcomed Sany’s plan saying it would add to the list of Chinese investment in Indonesia. “China builds in Indonesia and can hire Indonesian workers,” he said. As such, Indonesia will have investment opportunities and a potential market.
Budi Darmadi, the Industry Ministry’s leading technology-based industries director general predicts the industry will grow by up to 9 %. “This will require US$ 1 billion in investment,” he said.
Indonesia has good potential in terms of its heavy equipment industry give the prevalence of mining and construction companies.
“Some countries don’t have mines or conversely, like Africa, have mines but don’t have good economic growth. Indonesia has both,” said Budi.
National heavy equipment sales this year are predicted to rise by 25 % compared to last year’s 7,000-8,000 units.