APM Forms Joint-Venture with Indonesian Company

APM Forms Joint-Venture with Indonesian Company

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APM Automotive Holdings Bhd (APM), the largest automotive component manufacturer in Malaysia, through its wholly-owned subsidiary Auto Parts Holdings Sdn Bhd, will establish a joint-venture company in Indonesia for the manufacture and distribution of automotive, bus and train seats. The JV is with PT Mekar Armada Jaya (MAJ)- more commonly known as New Armada among Indonesians – which is a 27-year old company involved in the Indonesian automotive industry at manufacturing and distribution levels.

The JV company will be known as PT APM Armada Autoparts (AAA) and will be located at Magelang in Central Java. In addition to supplying seats to MAJ for their buses and trucks, AAA also expects to supply similar products to other Indonesian bus and coachbuilders as well as to automakers which have assembly plants in Indonesia.

In its advisory to the KLSE today, APM stated that AAA, which is to commence operations by November this year, will have an authorized and paid-up capital of US$300,000 with each party holding equal equity of 50%. APM will make an initial capital outlay of US$150,000, or around RM500,000 as its share while it is understood that MAJ’s contribution will be in the form of factory, land and equipment.

Initially, AAA will concentrate on making seats for buses and trains but in the longer term, the company will also make seats for cars. APM’s subsidiary involved in seats will provide technical assistance in the form of product design and development, process improvement and manufacturing know-how.

AAA’s output is intended only for the Indonesian market but there are also plans to export some products in the long term, especially with AFTA soon to be realised. It is likely that AAA will export to markets which are not already served by APM.

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