Sumitomo Construction Machinery Co. on Thursday began operating a hydraulic shovel factory on the outskirts of the Indonesian capital.
The company's third production site following locations in Japan and China, the Jakarta plant will be operated by a local subsidiary owned 85% by Sumitomo Construction Machinery and 15% by parent company Sumitomo Heavy Industries Ltd. (6302).
Built at a cost of roughly 2.8 billion yen, the facility is capable of turning out 1,000 hydraulic shovels annually. It will begin by making 21-ton models, which are in greatest demand. Plans are to start making 33-ton shovels in June 2012 and 35-ton models in September 2012.
Units made at the plant will initially be sold in Indonesia. Additional investment will boost capacity to 2,000 units per year in 2012 and the facility will begin exporting to other Southeast Asian nations such as Malaysia and Vietnam.
Demand is rising in Southeast Asia accompanying resource development and economic growth. Sumitomo Construction Machinery has had a weak presence there due to the strong yen and high local tariffs, but is putting effort into the region, especially Indonesia.
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