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A Chinese home furniture manufacturer plans to invest approximately 1.1 billion yuan (around $157 million) in establishing a new production facility in Indonesia. This expansion aims to better serve international markets and reduce exposure to risks stemming from unpredictable global trade conditions.
Construction on the new plant in Semarang, located in Central Java, will commence in the third quarter, with a project timeline of four years. Some production lines are anticipated to start operating during the construction phase.
Once fully built, the factory is projected to reach its full capacity within three years, generating annual sales surpassing 2.5 billion yuan. The estimated break-even point for the investment, including construction costs, is about 8.6 years.
Strategically positioned in Southeast Asia, Indonesia serves as a vital transportation nexus linking Asia with Oceania and connecting the Pacific Ocean with the Indian Ocean. Establishing manufacturing operations there will facilitate more efficient distribution throughout these regions.
This company already operates other overseas facilities, including a mattress factory in the United States, a high-end upholstered furniture plant in Mexico, and a sofa manufacturing site in Vietnam. According to its latest annual report, foreign sales accounted for nearly half of its total revenue, reaching approximately 8.4 billion yuan (around $1.2 billion) last year.
As of midday in Shanghai, shares of this furniture manufacturer declined slightly, trading down 0.7% at 28.50 yuan (roughly $4).
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