(Yicai Global) May 17 -- Jiangsu Lianfa Textile and major Indonesian garment maker Ungaran Sari Garments will spend about USD190 million to build a high-grade woven textile factory on Indonesia's main island of Java.

The plant will have an annual output of 66 million meters of cloth, Lianfa reported in a regulatory filing.

The project, which is set to break ground in October and get up and running by February 2022, will unfold in two phases. The first will achieve annual output of 36 million meters of dyed fabric, and the second will produce 30 million meters of printed and dyed cloth per year. Lianfa projects the plant will yield USD12 billion in annual revenue.

Lianfa's wholly-owned Hong Kong unit and an affiliate of USG will establish a joint venture in Hong Kong, in which Lianfa will spend USD45 million to hold a 90 percent stake and USG will take the rest for USD5 million. The JV will then be used to set up a project company in Indonesia as its 99.9 percent shareholder, per the filing.

Based in Semarang, the capital of Central Java province, USG is one of Indonesia's largest garment makers, supplying men's and women's shirts, women's skirts and other clothing products to world-renowned brands. It has 11,000 employees, local guide website Seputarsemarang reported.

Indonesia generated USD12.5 billion from textile and garment exports in 2017, which it sold mainly to Europe, the US and Japan, which have strong demand for high-end apparel fabrics. 

The project will help fill gaps in the archipelago nation's textile and apparel industry chain, enhance quality and trim delivery times, the filing said.

Editor: Ben Armour