(Adds comment from Samsung, Indonesian official)
By Eveline Danubrata and Hyunjoo Jin
JAKARTA/SEOUL Aug 18 South Korea's Samsung
Electronics Co Ltd said on Monday it plans to set up
a factory to produce mobile phones mainly for Indonesia, one of
the world's fastest growing markets for the devices.
The company, which already has factories in China and
Vietnam, declined to disclose the potential size of its
investment. Earlier this year, Taiwan's Foxconn Technology
Group, a major supplier to Apple Inc, said it was
considering setting up a $1 billion manufacturing facility in
"We have been discussing with the Indonesian government of
our plan to produce mobile phones for the domestic market, so
that we can meet local consumers' need more effectively,"
Samsung said in an emailed statement.
Samsung plans to gradually build up the production capacity
at the factory in West Java to 900,000 units per month, Budi
Darmadi, director general of high-tech industry at Indonesia's
industry ministry, told Reuters.
The South Korean company is expected to start with a monthly
capacity of 100,000 units this year, Darmadi added.
It is unclear if Samsung is going to produce cellular phones
or smartphones, or both, at the factory.
A youthful population, low smartphone penetration rates and
higher disposable incomes make Indonesia an attractive market
for smartphone manufacturers like Samsung, which has seen sales
growth of its flagship Galaxy models weaken in more established
People aged under-30 make up over half of Indonesia's 240
million population and just 20 percent use smartphones.
Estimates put smartphone usage at 50 percent before the end of
Samsung's investment comes a few months after Indonesians
elected former Jakarta governor Joko Widodo, who is seen by the
markets as business-friendly, as president of Southeast Asia's
largest economy. Widodo's administration is due to take office
Foxconn, listed as Hon Hai Precision Industry Co Ltd
in Taiwan, had said it was waiting for the new
government to take office before deciding whether it would go
ahead with its manufacturing plant.
The Indonesian government is considering a 20 percent tax
for smartphones retailing at 5 million rupiah ($428.38 dollar)
and above in an effort to dampen the influx of imported
(1 US dollar = 11,672.00 rupiah)
(Additional reporting by Yayat Supriatna in JAKARTA; Editing by