Doosan Infracore has teamed up with an Indonesian engine production company to enter the Southeast Asian engine market
Doosan Infracore signed an engine production and sales contract with PT Boma Bisma Indra (BBI) in Surabaya, Indonesia on Aug. 21 (local time).
Last year, Doosan Infracore signed a strategic partnership deal with BBI to participate in the Indonesian government's Indonesian National Engine Manufacturing Project. The latest contract is a follow-up for a full-scale implementation of the project.
Under the agreement, the two companies have agreed to collaborate on BBI's engine development for the next 13 years through dress-up and semi-knock-down (SKD) and complete-knock-down (CKD) stages.
At the same time, the two firms will also target the Southeast Asian engine market. BBI set up a dress-up and SKD plant that can produce up to 16,000 units a year. At the plant, they will produce a variety of engine products to meet demand from Indonesia's major engine markets, including engines for ships, construction machinery, agricultural machinery and generators. BBI plans to ramp up production to up to 25,000 units in the future.
The agreement will provide Doosan Infracore with a springboard for entering the Indonesian engine market, the largest in Southeast Asia which is expected to grow at an annual average of 5 percent between 2018 and 2025 based on demand for vehicle and industrial engines.
"The BBI plant will be a major base for targeting emerging markets with high growth potential such as Southeast Asia, in particular, Indonesia," said Yoo Jun-ho, vice president of the Engine Business Group (BG) at Doosan Infracore. "We will actively respond to demand for various engines through a global production system tailored to engine lineups by markets."