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Hon Hai treads cautiously on investment in Indonesia

2013/04/25 20:27:07

Taipei, April 25 (CNA) Taiwan-based Hon Hai Precision Industry Co. reacted cautiously Thursday to news reports about its investment plans in Indonesia, saying that much will depend on what kind of favorable conditions will be available.

The company is not offering any official comments but a source said that its current plan is to first set up retail business in Indonesia in cooperation with local partners.

Hon Hai will probably engage in retail cooperation with Indonesia as a first step toward realizing a company plan to invest there, the source said.

Given their strong demand in the local market, cell phones and tablet computers look likely to be among the first products that will be sold at the planned retail stores, he said.

Another source of Hon Hai said in Indonesia that any retail or manufacturing investment plans will depend on the conditions offered by the government of the Southeast Asian country.

A precondition, he said, is that a memorandum of understanding should be signed with the Indonesian government on the conditions, including any preferential treatment for Hon Hai.

He was responding to a report posted on detikinet, an Indonesian website, the previous week.

According to the report, Indonesian Minister of Industry M.S. Hidayat said the electronics giant, which makes iPhones and iPads for Apple Inc., is in talks with local firms for partnerships and will announce details of its investment in the near future.

Indonesian Trade Minister Gita Wirjawan said Hon Hai has signed cooperation agreements with Indonesian partners and will start handset production in Indonesia this year, according to the report.

Although Hon Hai was once inclined to abandon its plans to invest in Indonesia, it eventually decided to manufacture electronic devices such as mobile phones in the country, Wirjawan was quoted as saying in the report.

According to Indonesia's Central Bureau of Statistics, total imports of handsets in January reached US$219 million, while the figure recorded for the whole of 2012 stood at US$2.5 billion.

(By Chung Jung-feng, Jay Chou and Maia Huang)