The impact of Indonesia’s rating being promoted to
investment grade was shaping up. Initially Indonesia’s role as investment site
for foreign investors had started decades ago when Japanese automotive
producers invested in Indonesia. After 40 years of endeavors in this country,
Toyota Manufacturing Corporations (TMC) declared Indonesia as the base of
automotive industry for the world’s market.
Additional investment from Rp 13 trillion for the
next 5 years which would probably increase further to Rp 26 trillion for the
mid-term would magnify Toyota's achievement. Additional investment would bring
great multiplier effect to propel development of component industry in
Indonesia.
Today Toyota had 105 main supplier companies,
including among others 44 suppliers of body components, 39 suppliers of unit
components and 22 other suppliers like raw materials and logistics. The spirit
was visible in the big teem flanking President Director of TMC Akio Toyoda to
Indonesia recently.
With Toyoda, there were five top
executives of Toyota Group who came by, i.e. Representative of Toyota Group 1
consisting of President Director of Toyota Autobody Co Ltd. Takuji Arnioka,
President Director of Toyota Tsusho Corporation Jun Karube, President Director
of Aisin Seri Co Ltd, Fumio Fujimori President Director of Denso Corporation
Nobuaki Katch; and President Director of Daihatsu Motor Co .Ltd. Koichi Ina.
In tandem with the increased
Investment, Toyota Group also planned to increase workforce. Today the number
of workers accommodated was posted at 32,000 people and was planned to increase
to 41,000 to in 2015. Six companies which planned to increase investment were
among other TMC through PT Toyota Motor (TAM) Manufacturing Indonesia (TMNIN).
Word we out that TMC would soon build an engine
factory. Today a piece of land was bought in the region of Karawang West Java.
TMNIN was also accomplishing additional production capacity of Factory I in Karawang
from 110,000 units to become 130,000 units in March 2013. In addition to that
to build Factory II also In Karawang which was scheduled for operation in
March 2013 producing 70,000 units to be increased to 120 thousand units early
2014. Hence total capacity of the two factories became 250,000 units in 2014
and through maximizing plan would be increased further to 300,000 units per
year.
Meanwhile through TAM Toyota continued to strengthen
marketing network and service facilities by opening new dealers which now had
come to 235 units spread out all over Indonesia. As per October, TAM was able
to maintain position as market leader with total sales of 333,991 units and
market share around 40% of total sales of national cars per October 2012
amounting to 816,322 units.
Through PT Astra Daihatsu Motor (ADM) Toyota Group
was building various facilities of production and Research & Development (R&D)
to increase production capacity. Investment would also be made by Toyota Auto
Body Copy Corp Ltd through PT Toyota Auto Body and PT Sugity Creative to operate
assembling which produced a number of new type of vehicles for the Indonesian
market.
Meanwhile Denso Corp Ltd through PT Denso Indonesia
would intensify industry by expanding components industry through increased
capacity of 2 of their factories in Indonesia. Soon in 2014, PT Denso Indonesia
planned to bull their third new factory in Bekasi to produce high tech
components tike Engine Control Unit.
Autro components made by PT Denso Indonesia were
not only used for Toyota and Daihatsu production needs but also for other
brands and some of them were exported. Furthermore through PT Aisin Indonesia,
Toyota Group would expand their production of components; and they had set
schedule for producing engine front module for 2015.
The investment development was part of the
implementation of global strategy which would continue increase production and
sales to the emerging markets like Indonesia. In the next three years, Toyota
sets target to expand market share and sales to the emerging markets.
In 2011, of 7,097 million units of global sales,
around 45% or 3,193 million resulted from sales to the emerging markets. In the
eyes of Akio Toyoda Indonesia was posting impressive growth in the past few
years; and Indonesia was rated as one of the key to successful business in the
future.
Last year, Toyota Indonesia exported 88,000 units or
81% of total mortar vehicles from Indonesia. Today National Domestic
Consumption contributed nearly 60% of the nation’s economy as a whole. The
condition was indicated by stable consumers’ price, increased consumer’s
purchasing power, and better business trust which contributed to increase of domestic
demand.
The above picture proved that Indonesia had been
able to be back on her feet again after misery that befell on this country not
long ago. The favorable condition eventually kept Indonesia from being underestimated
by the international businessworld in terms of investment climate. Investor’s
zest to invest their capital in Indonesia was considering national economic
growth which had the potential to accelerate in times when some developed
nations were having negative economic growth.
Just when angle advanced countries were affected by
crisis that originated from Europe and America, Indonesia remained to stand
tall. For Indonesia’s size worth economy of USD 850 thousand, 6.4% growth as
regarded as high. The Coordinating Board of Investment (BKPM) noted that
investment realization in Indonesia, whether Domestic Investment (PMDN) or
Foreign Investment (PMA) in second quarter alone reached Rp 76.9 trillion. The
average quarterly investment was around Rp 75 – Rp 80 trillion so in a year it
would come to Rp 300 trillion.
Indonesia’s opportunity to draw foreign investors
was considerably great, the prospect was visible in national economic condition
which was stable and was able to stand the patter of global crisis. This was
the condition that caused many investors to relocate their investment to
countries with stable economy.
This appeal was strengthened by Indonesia’s
bargaining position which was in 2nd best position in G20 with
growth of 6.4%. As a whole estimated GDP growth in Asia 2012 inched down by
0.2% against previous year from 7.9% to 7.7%. Thanks to positive economic growth
amidst global financial crisis, Indonesia’s bargaining position moved up in the
eyes of the world’s automotive market.
The plan of Toyota’s Group to increase investment in
Indonesia was sound evidence that Indonesia was getting more appealing in the
eyes of investors. Indonesia’s positive economic growth made this country more
important to Toyota in developing automotive business, not just due to
historical factor – 40 years of achievement in Indonesia but also because
Indonesia treasured enormous market potential and population of 250 million
spread out in 17,000 islands. Those were the factors that Toyota took into
consideration before investing in Indonesia.
Commitment of Toyota’s Group to increase investment
for the next 5 years was aimed at increasing production capacity of assembling
and automotive component’s industry. This resolution was not felt by the
Government alone but it was also what the Indonesian people pin hope on toward
happiness for all.
Japan’s commitment would at least expand the constellation
of automotive industry in Indonesia, while accommodating more workers by 9,000
people to become 41 thousand people. This was the reality which directly
increased contribution to national economy. Toyota’s investment was part of
their global strategy which focused on increasing production output for
exporting to emerging markets including Indonesia.
Indonesia was chosen as one production bases with
Thailand. Indonesia was rated as one of the emerging markets with impressive
growth performance in the past few years. It was not just Japanese automotive
producers who were interested in expanding their business in Indonesia but also
automotive producers from Europe like Germany.
This was evident in the statement of CEO Mercedes
Benz Claus Wielder who planned to produce M-Class Series cars. According to
Widener, assembling of ML 350 series cars in Indonesia indicated that
investment climate at home was conclusive for growth of that company. Indonesia
was rated as a potential market for Mercedes Benz. Car assembling in Indonesia
also reflected Indonesian skill and talent which was capable of assembling with
high precision and high discipline.
Production of ML 300 in Indonesia was supported by
experts from Germany and the USA who had conducted trainings in assembling
process wilt the highest standard of quality. Even inks structure was built by
new technology platform.
The company’s commitment wee to progress and develop
together with the Indonesian people. PT Mercedes Benz Indonesia was expending in
line with economic development in Indonesia and the world. Relocation of
assembling factory of M-Class to Indonesia was Mercedes Benz’s big agenda for
year and 2012.
PT Mercedes Benz Indonesia saw
that public interest in M-Class series and the market potential of premium of
ML 358 4 MATIC proved the company’s confidence in propelling the automotive
industry of high end automotive products and resolution to tap the Spot Utility
Vehicle (SUV) premium segment. Mercedes Benz ML 350 4 MATIC Blue efficiency applied
the benzene-fueled injection system or direct petrol injection. This third
generation vehicle had the capacity of 3.0-litre V 6 and they had passed the
high emission EUS standard test.
In response to great investment
plan of the two world-class principal companies it was only sensible and
reasonable for the Government of RI to strive to create a conclusive investment
climate. As known, investors always tend to consider all the risk and prospect
of return in making their Investment.
What the Government could expect
to do now was to simplify regulations and to ensure transparence in investment
regulations. Overlapping regulation and indefinite rules tend to increase risk
in investing. Not less important thing to be done by the Government was to build
nifty-structure.
In regard to the Indonesian
Economic Growth Acceleration Masterplan (MP3EI) the Government, guideline six
corridor development concept could procure infra-structure especially outside
Java. Readiness of infra-structure was most important to investors because
they minimized production cost and increased profit from Investment.
In addition to that, readiness of
skilled workers was necessary to attract investors to invest in Indonesia. As
with the demographic advantage offered by Indonesia, It was an attraction of
its own to foreign investors. The demographic “bonus” means increased number of
workforce in years to come. However, the Government must see this demographic
advantage as a challenge not just opportunity.
The challenge means that Indonesia had to prepare
trained and skillful workers according the needed specification and nature of
industry in the future, highly competent and qualified workers, and mastery of
technology would be the main pillars of economic transformation process in
Indonesia. These were the facture that made Indonesia a prima donna of
investment site in Southeast Asia. In the eyes of foreign investors, Indonesia,
in spite of all the handicaps was still rated as the most attractive location
for investment compared to the other 9 ASEAN countries.
Regretfully in many aspects Indonesia was still
problematic when it came to investment climate. Things like high corruption,
poor infra-structure were all the handicap factors that posed as minus point to
the overall appraisal. Supposedly Indonesia had the potential to become an
advanced nation in 2030 considering some plus points.
Firstly, Indonesia’s economic condition was rated as
the most stable in the world. Bank Indonesia had confirmed that Indonesia’s
economy had been the most stable in the past 4 - 5 years.
Secondly, around 90% of Indonesia’s economic growth
originated from other islands outside Java, meaning economic growth was not
only centered in Java or Jakarta.
Thirdly, around 11% of Indonesia’s exported
commodities originated from the non oil-gas sector. This was denial to the myth
that Indonesia’s domestic economic growth was dominated by export.
Fourthly, exploitation of natural
resources had been reduced even to the extent of 7%. This was denial to the
perception that natural resources was the main sustained of economic growth.
Fifthly, around 60% of economic
growth was supported by increased productivity. This also denied the assumption
that economic growth was only clue to increased workforce. This was the
momentum for Indonesia not to be mere local champion but also be important at
regional and global level.
Business News - November 28, 2012
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