French Areva to invest $15m for business expansion in Indonesia

The Jakarta Post, Jakarta  |  Sat, 03/29/2008 11:12 AM 

French electrical components supplier Areva plans to spend 10 million euros (US$15.7 million) over the next couple of years on expanding its business in Indonesia.

Visiting Areva chief executive officer Philippe Guillemot told reporters Thursday the investment would be aimed at doubling the firm's production capacity as well as at introducing new technology for the local market.

"We are seeking other opportunities in the industrial sector, including in oil, gas and mining firms, as well as in a government-sponsored 10,000 megawatt power project," he said.

Aside from state power firm Perusahaan Listrik Negara (PLN), Areva's principal customers include U.S. Freeport, local steel producer Krakatau Steel, U.S. Chevron and French Total.

The firm plans to involve itself as a supplier of transmission and distribution devices in the 10,000MW power project.

Areva sales director for Indonesia Yann Reynaud said more investment was needed to help the company maintain its export activities, which currently account for 55 percent of the firm's total sales.

Reynaud said it was important for the company to raise production capacity in Indonesia to meet export demand from Australia, South Africa and Senegal.

In addition to having its own manufacturing units, the company also runs with PLN a joint venture firm named Unindo, which is 65 percent controlled by Areva and 35 percent by PLN.

Reynaud estimated the company's Indonesia assets in the region of 150 million euros, comprising two manufacturing units and three regional sales offices.

Areva said it supplied 80 percent of Indonesia's electricity components. -- JP/Ika Krismantari