Textile manufacturer Lealea Enterprise Co (力麗) on Saturday said it would set up its first overseas factory in Indonesia this year.
Chairman James Kuo (郭紹儀) has made investing in Indonesia one of Lealea’s strategic priorities and set the goal of launching operations at the Indonesian site in the second half of the year, the company said.
Taipei-based Lealea, which makes polyester filament yarns and polyester chips, signed a memorandum of understanding with PT Taroko Indonesia and is to spend up to US$50 million to acquire PT Taroko’s production facilities in Bandung, Indonesia’s third-largest city.
PT Taroko is a joint venture between Taipei-based Taroko Textile Co (大魯閣纖維) and Nan Ya Plastics Corp (南亞塑膠), a Formosa Plastics Group (台塑集團) subsidiary.
Taroko Textile is selling the facility because it wants to diversify its interests beyond the textile sector and Nan Ya did not want to continue its investment.
Kuo sent several delegations to Bandung to evaluate the 50 hectare site and conduct an assessment on how to upgrade the facilities, the company said.
The Bandung plant will initially be involved in the fabric dying and finishing business before expanding to yarn making, Lealea said.
The company believes that demand for textile products in the Indonesian market is strong, and because textile exports from Indonesia to Japan and South Korea have duty-free status, the plant will export half of its production.
The Lealea Group (力麗集團), of which Lealea Enterprise is part, also plans to have another subsidiary, Li Peng Enterprise Co (力鵬), set up open warehousing facilities in the US later this year.
The facility will store the nylon chips and polyester chips that Lealea produces at its plants in Taiwan and Southeast Asia and will be able to accommodate about 2,000 tonnes of products.
Despite its overseas investment, the Lealea Group said it remains fully committed to its manufacturing operations in Taiwan to enhance its sustainable development.
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