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Taiwan's Lealea to buy Tarako textile plant in Indonesia
Feb '17
Courtesy: PT Indonesia Taroko Textile
Courtesy: PT Indonesia Taroko Textile
Taiwan based textile manufacturer Lealea Enterprise Company, one of the largest polyester filament yarn and polyester chip makers in Taiwan, has signed a deal to acquire PT Taroko's production facility in Indonesian city of Bandung. Taroko will be the first overseas production facility for Lealea, and it plans to begin production in the second half of 2017.

As per the memorandum of understanding signed by the two companies, Lealea will spend up to $50 million to acquire PT Taoko's textile production facilities in Bandung, the third largest city in Indonesia.

PT Taroko is a joint venture between Taipei-based Taroko Textile Co and Nan Ya Plastics Corp, one of the main subsidiaries of the Formosa Plastics Group. While Taroko Textile wants to diversify its interests beyond the textile sector, Nan Ya does not want to continue its investment, Taiwanese media reports said.

Taipei-based Lealea will upgrade the 50-hectare production site in Bandung before launching its operations there. Initially, Lealea plans to start fabric dyeing and finishing business at the plant, before expanding to yarn making.

One of the reasons for Lealea deciding to invest in Indonesia is that the Southeast Asian country enjoys duty-free status for its exports to Japan and South Korea. Hence, nearly half of the production at the new plant is likely to be exported, with most of them to these two countries.

Strong demand for textile products in the Indonesian market is also a reason behind the Taipei based company deciding to invest in Indonesia.

Meanwhile, Lealea Group, the parent company of Lealea Enterprise, is planning to open warehousing facilities in the US later this year under another subsidiary Li Peng Enterprise Company. The warehouse will store about 2,000 tonnes of nylon and polyester chips produced in Taiwan and Southeast Asia. (RKS)

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