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Hon Hai evaluating investment prospects in Indonesia: report

TAIPEI, Taiwan -- Over the Chinese New Year holidays, Hon Hai Group (鴻海集團) Chairman Terry Gou (郭台銘) and executives visited Indonesia to assess future investment plans, CNA recently reported.

Hon Hai Group said it had originally planned to establish its mobile phone factory in Indonesia by the end of last year but the company said due to unresolved investment details concerning the local economy and costs the investment project was postponed.

The company said the Indonesian project is currently being evaluated with factors such as costs, profit potential and production procedures being taken into account.

CNA reported that Gou and company executives met with Indonesian trade and investment officials during the Lunar New Year holidays to negotiate details on potential investment projects. CNA said the phone factory may be one of a number of projects under discussion. The chairman also visited local retailers as part of understanding Indonesia's market for high-technology products, CNA said.

The Indonesian minister of industry and trade, Mohamad Suleman Hidayat, has confirmed the Hon Hai chairman's visit, said CNA. The minister said the government did not have an official meeting with the chairman, with Hidayat adding that he had only one golf session with the Hon Hai delegation in Bali, CNA said.

A range of illegal and low-budget mobile phones occupy the majority of the share of the mobile phone market in Indonesia, CNA said, adding that Hon Hai will face pricing competition with local manufacturers. BlackBerry and Samsung are the most popular brands for Indonesian users and Hon Hai may struggle to achieve a high profit given competition with these two already established rivals, said CNA.

CNA said Hon Hai executives will again visit Indonesia after the New Year's holidays as part of firming up investment plans.

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