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Samsung Interested in Building Mobile Phone Plant in Indonesia

After Apple’s partner Foxconn recently looked into Indonesia to build a manufacturing plant, here comes Samsung following the same route. The Indonesian unit of South Korea’s Samsung Group, PT Samsung Electronics Indonesia, was stating its interest in building a mobile phone plant in Indonesia on Friday.

Samsung (005930:KS) already has an electronic devices factory in Indonesia, but it’s apparently not enough. According to Kompas, the head of Samsung’s unit in Indonesia, Lee Kanh Hyung, expressed Samsung’s intention after a meeting between several Korean companies and Indonesian Industry Minister M.S. Hidayat.

Mr. Hidayat said that the ministry will support Samsung’s plan and provide incentives to set up the plant. Hidayat also explained that the government needs to convince potential investors that overlapping regulations and red tape won’t hurt their investments.

Last month Hidayat also welcomed Taiwan’s Foxconn investment to spend around $10 billion to set up manufacturing centers in the country. Hidayat said that the new Foxconn plant will officially launch on July 6th, 2013.

The consumer electronics business director of Samsung Electronic Indonesia, Iffan Suryanto, said in April 2012 that Samsung targeted mobile device sales of $1 billion in Indonesia this year. For 2011, Samsung Indonesia contributed approximately 0.5 percent of Samsung’s worldwide total revenue, which reached $145.2 billion. He added:

Until now, mobile devices are still the flagship product [in Indonesia] with a contribution of 65 to 70 percent of Samsung Indonesia’s total revenue.

We’ll look out for Samsung hopefully confirming this in the near future.

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