Taiwan machine tool suppliers take advantage of Indonesian market

Taiwan suppliers offer machines with higher Cost/ Performance ratio, customized design, and before and after services.

Members of Taiwan Buyer's Lounge gathered before the show

There are many metalworking manufacturing centers in the world and Indonesia is one of these core centers. Frost & Sullivan is optimistic regarding Indonesia's cutting tools and machine tools market due to the individual growth of the mining, power generation, automobile, aerospace & defense industry. Frost & Sullivan consultant Mr. K Vinod Cartic predicts machine tools and cutting tools market in the Asia Pacific to grow 9.1% at a Compound Annual Growth Rate, reaching revenues worth of US$6.36 billion in the year 2017.

As the labor cost and other manufacturing-related expenses in China rise these days, more and more international manufacturers’ especially automotive manufacturers move their factories to Indonesia. The country is an attractive place in which to do business in for many. It has a high population, strong power consumption, excellent labor quality, and an emerging middle class.

For instance, it is reported[1] that Mitsubishi spent US$600 million investment in its latest Indonesia plant and new car development, because the company recognizes that taking a lead in one of the most populous nations is beneficial to the company's permanent growth in the world market.Indonesiawith around 240 million population, is recognized as Mitsubishi's biggest foreign market now. The new Mitsubishi plant is anticipates to have a capacity of 160,000 per year, and the number may be expanded to 240,000 vehicles in the future. The company aims to lift its Indonesian market share to 13% from 8% now and expects its Indonesia plant to become the second largest production base in Southeast Asia. Besides Mitsubishi, other well known automotive makers[2] such as Toyota, GM, Ford, Tata and many others are trying to enter Indonesia’s automotive hub, after their investment in Thailand. Many of them foresees huge amount of investment projects and high annual outputs enough to make.

Indonesia a shining star in the automotive sector, encouraging supply chain from up to down streams to step into this area. Besides, motorcycle companies such as YAMAHA[3] and Triumph have considered Indonesia for further expansions. YAMAHA has set local manufacturing centers to produce R25 sport bikes while Triumph[4] exports motorcycles into Indonesia and is planning to extend more local service centers for domestic consumers.

Indonesia has the advantages of a large labor force, abundant natural resources and modern infrastructure, which are great transportation business opportunities for the automotive[5] and motorcycle sectors and hence targeted by many manufacturers.

As a result, the government is improving its manufacturing environment and regulations in order to attract more foreign investments. These foreign manufacturers, while set plants in Indonesia, consume machine tools for their processing, and it is reported that machine tools imported by Indonesian automotive sector contributes 45% of the nation's overall machine tool imports and the primary exporting countries are Japan and China.

On December 3, 2014, the Manufacturing Indonesia series (including Machine Tool Indonesia, Industrial Automation & Logistics Indonesia, and Tools & Hardware Indonesia) had its successful opening in Jakarta. The show covered 34,387 sqm and attracted exhibitors from over 30 nations, including Germany, Japan, China, Korea, Singapore,Thailand, UK, Turkey, and Taiwan. This time in 2014, the number of Taiwanese exhibitors have increased, showcasing the nation's manufacturing competence.

Opening ceremony of Manufacturing Indonesia

Taiwan Buyer's Lounge

At the Taiwan Buyer's Lounge, it was shown that domestic and global visitors believe Taiwan can provide accurate and reliable machine tools with better price compared to Japan and German suppliers. Taiwan suppliers offer machines with higher Cost/ Performance ratio, customized design, and before and after services.

There were excellent workpieces diplayed in the show room, including car lamps, hobs, screw gear transmission parts, high pressure silent rotary pump rotors, brake discs, and many other critical and precision workpeices for the automotive industry that has been adopted widely by international car manufacturers.

Exhibits and exhibitors inside Taiwan Buyer's Lounge

HONOR SEIKI promises excellent round workpiece units

For about 30 years, HONOR SEIKI produces accurate vertical CNC lathes for global buyers. The company is able to help customers from end to end, that includes developing, designing, manufacturing, assembling, testing, and TURNKEY solutions. At present, HONOR SEIKI offers its main products ranging from CNC vertical lathes, CNC vertical turning centers, CNC vertical grinding machines, CNC planar turning/ milling/ grinding centers, and CNC horizontal lathes.

At the company, the company showcased manufacturing services for the automotive and motorcycle sectors. Sales Manager Nick Lin explained, the VL-46Aand VL-46AS series are widely adopted by Toyota, Honda, Fiat, and VW worldwide in different global manufacturing sites, offering local demands in various specifications. HONOR SEIKI goes directly to these companies and their core supply chains, assisting them in the production of precision brakes and other automotive components. Mr. Lin said that HONOR SEIKI assists automotive manufacturers in production line automation, minimizing the labor demands, hence making the best use of machines and resources in the plants. For the motorcycle sector, the VL-500W series helps in processing aluminum wheels in a skilled manner.

In the ASEAN area, the company works closely with Tongtai, which has service spots in Malaysia, Thailand, Vietnam, and Indonesia, to promote their business in the region. Together with Tonghai machines, HONOR SEIKI provides excellent processing solutions for customers in the automotive and motorcycle component sectors, and will march further into the emerging market with optimal solutions customized for local manufacturers.