By Lisa Wang
Hon Hai Group (鴻海集團) is seeking entry into the handset and TV markets in Indonesia, with the populous country expected to be the next growth area for the group, a company spokesman said yesterday.
The comments came after the world’s biggest electronics contract manufacturer confirmed last week that it was studying the possibility of building manufacturing facilities in Indonesia. Some Indonesian media reported the group would invest up to US$1 billion to build factories there.
“It is a market we aim to get into as Indonesian people’s average per capita income has increased to US$3,500 from 10 years ago, allowing them to start shopping for communications devices,” said Simon Hsing (邢治平), a spokesman of the group’s flagship company, Hon Hai Precision Industry Co (鴻海精密), a major supplier of Apple Inc.
“That will open a new overseas market for us,” Hsing said by telephone. “Handsets and TVs are the top two items imported by the country. Those are some of our targeted areas.”
Hsing said the group was researching its next step in entering the market. Local media in -Indonesia reported that the group’s investment would create 1 million jobs.
Hsing also confirmed that Hon Hai Group had signed a memorandum of understanding with US broadband satellite networks and services provider Hughes Network Systems, LLC and China’s Golden Concord Holdings Ltd (協鑫集團) to form a venture to build a next-generation broadband satellite network.
Golden Concord operates GCL-Poly Energy Holdings Ltd (保利協鑫能源), one of China’s largest solar wafer manufacturers.
The new investment would be the next step taken by the group to integrate its products with the telecoms industry and it “will benefit from the high-speed Internet buildup,” which would help spur demand for mobile products, Hsing said.
No financial details were disclosed yesterday.
Commenting on Sharp Corp’s recent share-price decline, Hsing said the group may book impairment losses when issuing the company’s second-quarter financial statement.
Hon Hai, which holds about a 9 percent stake in Sharp, booked NT$6.4 billion (US$212.42 million) in asset impairment losses when the Japanese consumer TV maker’s share prices dropped to ￥425 on June 22, compared with the ￥550 price the group agreed on when it bought Sharp shares on March 27.
Yesterday, the price of Sharp shares plunged to their lowest level since 1975, falling 1.7 percent to ￥278 in Tokyo trading from Monday.