Meshindo Corporation riding high on its wheel of fortune

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."