Looking to Reduce Its Import Volume, Huawei Assembles Phones in Indonesia

Preventing Indonesian government’s regulation on the revocation of import permit, Huawei decided to partner with PT Panggung Elektronik in establishing its own factory in Indonesia. This is quite different to its competitors’, such as Asiafone, Polytron, Evercoss, Oppo, ZTE, and Haier, method, which is to establish the factory on their own.

As Kontan reported last Sunday (15/3), Huawei is attempting to avoid its importing permit from getting abolished should it has yet had its own factory standing in Indonesia by the end of 2015.

Huawei announced that after the partnership with PT Panggung Elektronik comes into force, there would be 50.000 unit smartphone being produced each and every month. The production activities will be done at PT Panggung Elektronik’s facility in Surabaya, East Java.

“Huawei collaborates with PT Panggung Elektronik in producing smartphone,” Ministry of Industry’s Director of Electronics and Telematics Industry Ignatius Warsito said.

PT Panggung Elektronik is a producer of electronic products like television, washing machine, electric meter, and set-up box.

Regarding its partnership with Huawei, PT Panggung Elektronik has reportedly spent up to Rp 10 billion to import the assembling machine directly from Japan. There has yet been any official statement made by both sides, but Warsito confirmed about the partnership. “The units of Huawei’s smartphone being produced there would be 3G-based and feature phones,” he revealed.

The partnership is expected to reduce the cost of production and import, as well as uncover more job vacancies to empower local residents. Huawei’s decision not to open the factory on its own is believed to root from the amount of initial capital it must spend. If the objective is to avoid the revocation, then this type of partnership should be enough.