JAKARTA (TheInsiderStories) – South Korean company LS Cable & System and local conglomeration company Artha Graha Group (AG Group) through its unit PT Artha Metal Sinergi to construct an electric cable factory in West Karawang, West Java. LS Cable and AG Group signed the agreement at the Indonesian Embassy in Seoul on Monday (18/06), the company said in a statement.
The two companies plan to invest US$40 million to build a cable factory on a 64,000 square-meter at an Industrial Artha Induatrial Hill in Karawang, West Java. The construction will begin in July and is expected to be completed by the end of 2019.
The South Korean cable producer aims at sales of $100 million by 2025 from the factory, which will produce overhead wires for infrastructure and low- and medium-voltage cables for construction.
The plan to build a cable factory is expecting could meet the government`s target to distribute sufficient electricity throughout the archipelago.
CEO of LS Cable Roe-Hyun Myung remarked: “Indonesia is one of the fastest growing countries in the world that has become an attractive market that has gained momentum during the visit of South Korean President Moon Jae-in to Indonesia last November.”
In response to this deal, Artha Metal Sinergi’s CEO Felix Effendi explained that the joint venture is aimed at strengthening the two-sided cooperation.
Last year, AG Group has established a joint venture (JV) with South Korean’s Hyundai Motor to entering the commercial vehicle market in Indonesia and branch into the Southeast Asian market. The new JV will manufacture commercial vehicles, such as medium and large-sized trucks, in the facilities owned by the AG Group.
In the analysis of Hyundai, the number of projects in Indonesia, especially in the mining sector makes the demand for commercial vehicles is increasing. It is estimated that the needs of the commercial vehicle industry in Indonesia, which reached 70,000 units last year will grow to 76,000 units this year and exceed 100,000 units by 2020.
In addition, the newly formed JV is intended as a strategic export base for other countries around Indonesia and will begin full new market exploration. The company and assembly plant of Hyundai Trucks and Buses in the early stages will be able to deliver XCIENT Trucks and ALL New MIGHTY of 2,000 units per year.
AG Network owned Tomy Winata, an Indonesian businessman with interests in banking, property, gambling and infrastructure, whose wealth comes from his business deals for the Indonesian Military.
He is the son of an automobile spare parts trader and left school in the seventh grade upon which he sold ice pops to support his family. Winata’s business empire has been developed under the Artha Graha Group and Artha Graha Network.
Winata also involved in the property sector through PT Jakarta International Hotels and Development,Tbk (IDX: JIHD), which owns Borobudur Hotel in Central Jakarta and PT Danayasa Arthatama,Tbk (IDX: SCBD), which owns the Sudirman Central Business District (SCBD) in the heart of Jakarta.
He also has business ventures outside of Indonesia, including in Timor Leste. Besides his legal operations, Tomy is also a member of the so-called “nine dragons”, a group comprising the major individuals behind Jakarta’s gambling industry, despite the practice being banned in Indonesia.
While LS Cable was established since 1962 and has grown to become one of the largest power cable manufacturers in the world by utilizing innovative technology in its products. With the establishment of this plant in Indonesia, the cable producer will have seven production companies in Asia, including in China, India, Myanmar, and Vietnam.