INDONESIA: Yokohama Industrial breaks ground on first plant in Indonesia

The plant, the company's first in Indonesia, will produce pneumatic marine fenders and marine hoses, which are used in the handling and transferring of crude oil at sea for material mixing, molding and vulcanization.

Yokohama Rubber, which produces tires, industrial products and golf products in Japan, is the world's No. 1 pneumatic marine fenders producer and number two for marine hoses.

Such products were previously produced in Japan, but once the Batam plant is completed, which is expected by June 2015, it will become Yokohama Rubber's second production site and increase production capacity by about 1.5 times of its current capacity.

The ground breaking of the Batam plant was conducted in private last Thursday (19 June 2014) at Kabil Citra Nusa Industrial Estate in Batam, attended by Yokohama Industrial president director Shuichi
Toriumi and Batam Free Trade Zone Authority (BPK FTZ) head Mustofa Widjaja.

Yokohama Industrial will build the plant on 5.1 hectares (ha) of a total 10 ha available area, as it leaves space for the plant's expansion, which will likely be conducted next year.

BPK FTZ goods and services traffic director Tri Novianta Putra told The Jakarta Post that Yokohama Rubber had chosen Batam as a place for its new plant as the island was located close to Singapore, only 20 kilometers from one of the world's largest and busiest ports, which would benefit the company's international distribution.

"Yokohama has finally decided to invest in Batam because it has several considerations, one of which is because [the island] is close to the market in the Asia Pacific,” Novianta said.

According to Novianta, the strategic location was expected to ease the company's distribution efforts to reach the global market in its export activities.

Batam BPK FTZ marketing and investments director Purnomo Andiantono told the Post that Yokohama's investment in Batam was a result of a long assessment effort.

"Yokohama's decision to invest in Batam is not a sudden decision. The company has conducted
an assessment for a long period of time, while the government continuously conducted lobbying.
The government even went to Japan several times,” Andiantono said.

BPK FTZ spokesman Dwi Djoko Wiwoho told Antara news agency that by 2017, Yokohama had targeted to increase the ratio of the overseas sales of its industrial products, aerospace products and sporting goods from the current 33 % to 50 %.

"The construction of the Batam plant is a part of Yokohama's grand design,” he said.

Japan is the sixth-largest foreign investor in Batam with 15 companies investing a total of USD 129 million, excluding Yokohama's investment.

Singapore remains Batam's largest foreign investor, with 410 companies investing a total of USD 933 million, followed by Malaysia, Taiwan, Korea and Australia.

Source: Daily "The Jakarta Post”, Jakarta; 25 June 2014
(Syed Rashid Ali, Karachi, Pakistan)