(Yicai) Sept. 2 -- Chinese home furniture supplier Jason Furniture Hangzhou will invest CNY1.1 billion (USD156.8 million) in a new production base in Indonesia to better meet overseas customer demand and mitigate operational risks from uncertainties in the external trade environment.

Jason Furniture will break ground at the new factory in Semarang in the Indonesian province of Central Java in the third quarter of the year, with an overall construction period of four years, the Hangzhou-based company announced yesterday. Some production lines are expected to come on stream during construction.

The plant will reach its designated capacity in three years after construction is completed, with its annual sales revenue expected to exceed CNY2.5 billion by then, Jason Furniture noted. The investment payback period will be 8.6 years, including construction.

Indonesia is located at the core of Southeast Asia, serving as a crucial transportation hub connecting Asia with Oceania and the Pacific Ocean with the Indian Ocean, Jason Furniture pointed out. Establishing a factory there will enable the company to deliver products in these markets more efficiently, it added.

Jason Furniture owns other overseas factories, including a mattress plant in the United States, a high-end upholstered furniture production base in Mexico, and an upholstered sofas facility in Vietnam. According to its latest annual report, the firm’s overseas sales revenue reached CNY8.4 billion (USD1.2 billion) last year, accounting for nearly half of the total.

Shares of Jason Furniture [SHA: 603816] were trading down 0.7 percent at CNY28.50 (USD4) as of 11.05 a.m. in Shanghai today.

Editor: Futura Costaglione