A chance for Taiwanese suppliers

In order to deal with rising labour cost and related polemical issues in China, Japanese manufacturers are moving their operations to Indonesia. Unlike other emerging markets, Indonesia has never been severely impacted by the world economy within the decade. And as for Taiwanese manufacturers, they will go to wherever there are opportunities. Being integrated into the Japanese supply chain is their best opportunity in Southeast Asia. In 2012, many Taiwanese machine tool producers moved their operations to Indonesia. More than a hundred Taiwanese manufacturers participated in the machine tool exhibition in Jakarta. The participants’ numbers reach a new level, indicating a new beginning.

The exhibition in Indonesia highlighted machine tools, parts and accessories, hand tools, and green facilities. This exhibition presented a microcosm of the growing industrial trend. There were many international participants so PT. Jakarta International Expo offered 32,000 sq m with a 6,000 sq m temporal field added in order to cope with the high numbers. Booth numbers reached 2,500. Among the international exhibitors, there were around 100 Taiwanese corporations, occupying about 180 booths in the show. Union representatives stated that this number was unprecedented.

Japanese are the majority among all the international corporations in Indonesia. Though they used to purchase Japanese goods and components wherever they were, but with the new economic reality, nationalism is no longer dominant. As such, Taiwanese machine tools are now favored for the high price/performance ratio and Taiwanese suppliers are seeking opportunities for further expansion.  They are expecting to integrate with the Japanese industry chain. Even with total export declining in 2012, export to Indonesia climbed in contrary to the trend, and Indonesia became the 6^th largest machine tool market to Taiwan. A machine tool union spokesman said that they have faith in this country and believe the situation will only get better in the near future.