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Sukhoi Plans to Build MRO Facility in Indonesia

Jakarta. Russian aircraft manufacturer Sukhoi plans to establish a maintenance, repair and overhaul facility in Indonesia.

The MRO facility will be built to comply with Indonesia’s Defense Industry Law, which sets an 85-percent offset obligation on the total purchase of defense equipment from abroad, Investment Coordinating Board (BKPM) chairman Thomas Lembong said on Tuesday (31/10), as reported by CNN Indonesia.

Indonesia previously signed a $1.5-billion contract with Russia for the purchase of defense equipment, including 11 Sukhoi Su-35s fighter jets, which according to Thomas, will cost around $1.15 billion.

“It means that what we have spent, we must get back through trade, exports and incoming investments,” he explained.

The value of the fighter-jet purchase will be partly offset through barter trade of agricultural products.

“The Ministry of Trade has appointed Perusahaan Perdagangan Indonesia to cooperate with [Russian state corporation] Rostec to export palm oil and rubber [to Russia],” Thomas said.

The BKPM chairman said 50 percent of the fighter jets’ total purchase price is expected to be offset through barter, and 35 percent through Russian investment in Indonesia.

French aircraft manufacturer Airbus said last week that it is looking at building a maintenance facility in the archipelago, in partnership with state-owned aerospace company Dirgantara Indonesia.

The planned facility will provide maintenance services for Airbus and Airbus-licensed aircraft, including military transport planes such as the CASA CN-235, CASA CN-295 and Airbus A400M, currently in use by the Indonesian Air Force.

Airbus’s clients in Indonesia, namely Lion Air, Batik Air, Garuda Indonesia and Citilink, have a combined standing order of 308 aircraft with the manufacturer and currently operate 112, according to company data.

Source: The Jakarta Globe