Meshindo Corporation riding high on its wheel of fortune

By John Aglionby

NOT many Indonesian automotive companies are riding high at present.

Anything that has to be imported has soared in price, local demand is decreasing daily, and there is no end in sight to the financial crisis.

One of the few exceptions is PT Meshindo Corporation, an alloy wheel manufacturer based in Surabaya. Not only is it bucking the trend, Meshindo is about to expand its production capacity by 40 percent.

"The company is extremely healthy at the moment, in spite of the economic problems affecting the country," marketing manager Edmund Tan said. "We have many more orders at the moment than we can manage, so we are going to expand,"

More than two-thirds of these orders are for original equipment manufacturers (OEM) abroad, meaning carmakers rather than just wheel wholesalers or retailers, although the latter two sectors are by no means ignored.

Much of Meshindo's technology, particularly in the design phase, is derived from a joint-venture technical assistance program with Central Motor Wheel Company Ltd, a subsidiary of Japanese giant Toyota. But its wheels are made so as to satisfy both European and Asian specifications.

Tan said: "This has enabled us to really get into the European market.

"We are supplying OEM in Italy, Holland, the Netherlands, Belgium, Denmark, England, Ireland and even Russia. Our turnover for these markets will be almost US$10 million this year from sales of between 15,000 and 20,000 wheels a month."

A major reason why order books are full through to the end of next year is because this is the first year Meshindo has actively gone overseas to sell its products.

Tan, and company president director Tirta S., made the long trek to the Frankfurt Motor Show last month for the first time but Tan has no doubt it was worth the effort and expense.

"It was a calculated risk but it turned out to be a very good decision.

"We met a lot of European customers we would never have met staying here.

"We got 10 to 15 new customers from the show, reestablished old contacts and introduced ourselves to many others. We definitely plan to go back next year."

Before then, in the first half of next year, Meshindo will look to expand its operations into the Middle East, a market it currently has very little presence in.

"There are a lot of factors to take into account and so, we haven't made a final decision whether to go to the show there, but it is a part of the world we are looking at very closely," Tan said.

Meshindo's operations are not entirely export oriented however. The six-year-old company supplies a number of local manufacturers, including Toyota, Honda, Bimantara, Isuzu and Daihatsu.

"The local market is going very slowly at the moment, which is why we are looking overseas so much.

"In the last month we have increased exports to 75 percent of our total sales," Tan said.

The secret behind Meshindo's success, Tan believes, is its design team.

"We are the leader in aluminum alloy wheel design in this part of the world. Being semi-European semi-Japanese our wheels can be accepted in either market, unlike most other Southeast Asian wheels, which only conform to Asian requirements."

Having an in-house design team, which is where Toyota provides most of its input, has enabled Meshindo to become ISO 9001 certified. "We were examined in the beginning of September and will get the certificate later this month," Tan said.

The company paid three times more than was necessary and employed TUV Rheineland to carry out the examination. Tan said the decision to do so was motivated by wanting to build the company's image abroad.

"It should improve our credibility with European buyers having one of their top companies doing it. It shows we want to be taken seriously and are not just any other Southeast Asian firm."

Tan says the design team gives Meshindo the edge over its main local competitor, PT Prima Alloy.

"They have been around for more than 10 years but I think we are much more than just holding our own against them."

And what of the future? Next year, the emphasis will be slightly different, Tan said. "Instead of going all out for the hard sell, we will be looking to introduce new products, meaning new designs, and let the other side of the world know that we are still around and mean business."