Jakarta, Frankfurt am Main, 7 December 2015. – Indonesia ranks among the world’s Top 20 markets for the machine tool industry. Japanese vendors dominate the market here, while Germany ranks 5th among the vendor nations for machine tools. Thus for German manufacturers there is plenty of scope for upsizing their sales. The country has huge economic potential, which is why the German producers of machine tools intend in future to vigorously intensify their business operations in Indonesia. The kick-off came at the VDW’s Technology Symposium in Jakarta held on 25 November 2015.
113 customers familiarised themselves with extensive corporate capabilities
Twelve manufacturers of machine tools took the opportunity to showcase their products, solutions and services on the spot. 113 high-ranking representatives of Indonesia’s industrial sector responded to the VDW’s invitation. They came primarily from the automotive industry and its component suppliers, the aviation sector,metalworking companies and the general mechanical engineering sector.
The German companies participating were Alzmetall, Chiron-Werke, DMG Mori, Emag, FFG-Werke, Grob-Werke, Heckert, Heller, Mikron, Siemens, Schwäbische Werkzeugmaschinen and United Grinding.
“With the VDW’s Symposium on ‘Machine Tools and Production Systems from Germany’ we’re here for the second time after 1992 in Indonesia, a country that offers high sales potential,” reports Klaus-Peter Kuhnmünch, the organiser of this VDW event.
The German participants take a similar view. Alexander Attenberger from Grob-Werk GmbH & Co. KG in Mindelheim emphasises: “In Indonesia, a sales market is currently emerging that should not be underestimated, particularly for top-quality machine tools ‘Made in Germany’. In view of the steeply rising population, and the concomitant industrialisation of the country, there will be attractive market potentials developing here in the future.”
Japan’s manufacturers dominate the Indonesian market
In 2014, Indonesia ranked 19th in the world, with machine tool consumption of 742 million euros. The country is the third-largest market in the ASEAN region, behind Thailand and Vietnam. During the period from 2010 to 2013, the Indonesian market performed exceptionally well. Consumption doubled to more than 900 million euros. Last year, however, the market suffered a downturn of 17 per cent. The most important supplier of machine tools is Japan, which accounts for almost 60 per cent of machine tool imports. It is followed in 2nd, 3rd and 4th places by Taiwan, China and South Korea. In 2014, German manufacturers exported machine tools worth 24 million euros to Indonesia, which corresponds to a market share of 2 per cent. As is the case in other countries of South-East Asia, the Japanese machine tool companies benefit directly from the strong presence of their own automotive industry and other customer sectors. The task for German companies is to put an end to this Japanese dominance and in future to devote more vigorous attention to the Indonesian market.
How a vendor’s position on the local market is to be sustainedly improved is outlined by Uli Kaiser, Business Development Manager South-East Asia at the Emag Group: “Now is an ideal time to get involved in Indonesia, since at present large amounts are being invested in production facilities. Due to the dominance of Japanese customers, a Japanese component is needed in the sales strategy of German companies.” By this Uli Kaiser means, for example, the integration of Japanese staff in the sales process.
Indonesia aims to harness its potentials still further
The Indonesian government’s goal is to establish processing companies on a firm footing throughout the country. This is designed to put in place the preconditions required for making Indonesia one of the leaders in Asia in terms of a manufacturing base. Although economic growth has in recent years lost a bit of its momentum, in 2014 the Indonesian economy, with a 5-per-cent rise in GDP, was still performing with notable success. This is unlikely to change in the near future.
Besides the construction industry and the food-processing sector, it’s primarily the automotive industry that’s booming in Indonesia at present. The Association of the Indonesian Automotive Industry (Gaikindo) is predicting that between 2014 and 2017 the local automotive industry will be upsizing its production capacities from 1.3 to 2.2 million units. In particular, the Japanese manufacturers Suzuki, Mitsubishi, Toyota, and most recently Honda and Nissan as well, intend to upgrade Indonesia into an export hub for the ASEAN Economic Community (AEC).
Prijono Sugiarto, the Indonesian Chairman of the German-Indonesian Chamber of Commerce, regards this development in particular as providing optimum potential for German companies to gain a better foothold in the local market. To quote Prijono Sugiarto: “I see a stronger presence of German automakers as a crucial key to success, since this will entail a direct pull effect for German machine tool manufacturers. Coupled with the currently rising propensity to invest, plus the industry-friendly, progress-driven policies of the Indonesian government, it can be anticipated that Indonesia’s manufacturing base will be continually upgraded. So what could be more logical for this purpose than to opt for top-quality products from Germany?”
German machine tool industry prioritises can-do allies
The VDW’s symposium was organised on the spot in conjunction with the German-Indonesian Chamber of Industry and Commerce, and supported by prestigious local associations from relevant customer sectors and the industrial community.
Roland Merz, Sales Manager Asia at Chiron-Werke in Tuttlingen, was attending one of these symposia for the first time, and his verdict is this: “The event in Jakarta was a good platform for this initial exchange of mutual feedback with representatives of Indonesia’s industrial sector. Thanks to subsequent visits to companies in Bandung we acquired an enhanced sensitivity to and an improved assessment of the Indonesian market.”
As Jan H. Rönnfeld, Executive Director of the German-Indonesian Chamber of Industry and Commerce, states: “The large number of Indonesian participants at the VDW’s symposium shows the keen interest of local companies in innovations from German machine tool manufacturers.”
Klaus-Peter Kuhnmünch from the VDW pointed out in conclusion that German manufacturers are approaching the Indonesian market, with its huge potential, using a long-termist strategy. He emphasises “that it is nonetheless important for the VDW’s members to continually hone their awareness for the idiosyncrasies of the Indonesian market, so as to derive from these the most appropriate strategies.”
Background:
For eleven years now, the VDW has been organising German technology symposia in important growth markets. They aim to assist the German machine tool industry to penetrate these markets and to showcase for the users there the sector’s professional competence and corporate capabilities. So far, symposia have been held in Brazil, China, India, Mexico, Poland, Romania, Russia, Thailand, Turkey and South Korea. In line with sustainability thinking, the symposia are repeated at certain intervals, as is the case this time in Indonesia.
Author:Manuel Löhmann, VDW Press and Public Relations,
Tel. +49 69 756081-83, [email protected]
Further information: Klaus-Peter Kuhnmünch, VDW,
Tel. +49 69 756081-37, [email protected]
Pictures:
Successful VDW symposium in Jakarta. Group picture of the organisers (from the left): Holger Seubert (Head of Economic Department, Embassy of the Federal Republic of Germany, Jakarta), Prijono Sugiarto (President Director, PT ASTRA International Tbk, Jakarta), Klaus-Peter Kuhnmünch (Manager General Affairs, VDW, Frankfurt), Jan Rönnfeld (Managing Director of the German-Indonesian - Chamber of Commerce Ekonid, Jakarta)
(source: VDW)
Official opening of the VDW’s Technology Symposium in Indonesia: 113 high-ranking representatives of Indonesia’s industrial sector obtained comprehensive insights into the product portfolio of German machine tool manufacturers.
(source: VDW)
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