Toshiba Corp. has announced it will expand its production plant in Indonesia by investing around $500 million. The move is in response to the surging domestic demand for electronics, driven by the country's rapidly growing middle class.

Currently, Toshiba manufactures household appliances like LED TVs and air conditioners at its Indonesian plants. Industry Minister MS Hidayat said that the electronics giant will set up an additional site at Java to significantly increase output and make Indonesia its largest production base outside Japan, according to the Jakarta Post.

The huge potential of Indonesia's domestic market has attracted major players to strengthen its foothold in various sectors such as automotive, oil & gas and electronics. Toshiba is but one of fifteen Japanese companies that pledged to invest $3.5 billion in the country over the next two years, according to the Investment Coordinating Board. The list includes Sumitomo Mitsui Banking, Toray Industries, Panasonic, Taisei, ITOCHU, Sumitomo Corp., Chiyoda, JGC Corp., Marubeni, Bank of Tokyo-Mitsubushi, Toyota Motor and Mitsui & Co.

The news came at the heels of Toshiba's announcement earlier this month that it will shut down operations at Dalian Toshiba Television by end of December as part of the company's reform plan to boost its Visual Products business (see Toshiba to close LCD TV mfg plant in China). In related investment efforts, Toshiba reinforced its capabilities in renewable energy sources with the acquisition of Sigma Power Janex back in September. The company expects to expand its wind power business by promoting synergies between the engineers who develop and those who deploy the equipment (see Toshiba to buy wind power generation firm).

By: DocMemory
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