Foxconn CEO Terry Guo uses his smartphone in a meeting. (Photo/Yen Chien-lung)
Electronics giant Foxconn Technology Group said Thursday that murky regulations on imported handsets in Indonesia have left the company with doubts about its plan to build a phone factory there and it has not set a timeframe to do so.
Foxconn is owned by the Taiwan-based Hon Hai Precision Industry Co.
A Foxconn executive who asked not to be named said Indonesia's regulations on imported handsets are unclear and local authorities are not active in cracking down on sales of knockoff phones or illegally imported handsets.
Because of this situation, Foxconn is still doubtful about setting up a handset plant in Indonesia, the executive said. The group also needs to find the right local business partners and to better understand the needs of Indonesian customers before making a final call on its investment plan, the executive added.
The comments were made in response to a request to confirm a report in the Jakarta Post on Wednesday, which said that Foxconn will start construction of a manufacturing plant in Indonesia this year.
"(The group) has confirmed the plan to me, to the head of BKPM (Indonesia Investment Coordinating Board) and to the industry minister," Indonesian trade minister Gita Wirjawan was quoted in the paper as saying at the Stock Exchange in Jakarta.
The Foxconn executive did not comment directly on the report, saying only that the group is still evaluating the investment plan.
With its population of 240 million, Indonesia is an attractive market, the executive said.
If Foxconn decides to go ahead with its investment plan in Indonesia, it will utilize an "import substitution strategy" as a way to help transform Indonesia's industrial structure, the executive said. The strategy advocates replacing foreign imports with domestic production.
Indonesian media recently listed Foxconn's potential partners in Indonesia as PT Hartono Istana Teknologi, a manufacturer of electronic products; PT Industri Telekomunimasi, a state-owned cellular network developer; or PT Telekomunikasi Indonesia, the country's largest telecom company.