PT Denso Indonesia Corp, apace with a changing world
PT Denso Indonesia Corp, apace with a changing world
PT Denso Indonesia Corp. is keeping a stride ahead in a furiously competitive, swiftly changing business world.
Celebrating its 20th anniversary of operations in Indonesia this year, the automotive manufacturing firm boasts some exciting new additions as it satisfies consumer demands, stressing quality and excellence.
Part of the huge global network of Denso affiliates and subsidiaries, with more than 56,000 employees and a consolidated net income of US$483 million in 1996, it has changed its name from PT Nippondenso Indonesia Inc. This was done to reflect its expanding business horizons and realization of the vital importance of integrating smoothly within the global market.
Pride of place in its operations will be a new research and development facility in Cibitung, West Java. Construction of the state-of-the-art department, projected to cost up to Rp 5 billion, was officially started today.
"Geographic location, economic gains and Denso Indonesia's own growth are all factors which will provide an opportunity for our company to become a global player," said PT Denso Indonesia Corp's President Director, Shinji Takeuchi.
"With that in mind, Denso Indonesia has long sought to garner added value, increased access and investment growth through expanding our Cibitung factory."
Denso Indonesia is already a long-time player in Indonesia. The contract for the joint Japanese-Indonesian venture was inked in 1973 as the prudent economic principles of the New Order government began to take shape.
Construction on the Sunter Plant was completed in 1977. Production sales, predominantly car air conditioners but also including radiators and air filters, were slow in the early days. In a strong relationship that continues to this day, Denso Indonesia's major customer was Indonesia's car owner.
"At that time, you could say that demand was limited to a handful of customers," Vice President Director Wiran Tandjungan remembers.
Denso Indonesia was not deterred, judiciously weighing Indonesia's potential as a strategic geographic hub and the largest nation by population and area in Southeast Asia.
"The growth of the automotive industry would also promote development of supporting industries, such as spark plugs, alternators, ignition systems and car air-conditioning, which would be integral to the growth of Denso in Indonesia," says Wiran.
The company's confidence paid off. Car ownership rose in the 1980s in tandem with Indonesia's booming economy and growing consumer spending power. Sales of the Toyota Super Kijang soared in the mid-1980s, fueling Denso's annual car air-conditioning (AC) production.
Demand has continued to increase during this decade. Today, Denso Indonesia produces 300,000 car AC units annually, up from just 100 to 200 in its first years of operation. This represents 85 percent of Indonesia's car AC market and 70 percent of the after-market service.
The company prides itself on adherence to strict quality standards. These have become so entrenched within the workings of Denso Indonesia that the company's Japanese headquarters halted retesting of Indonesian-produced AC units in 1991 in acknowledgement of the excellent quality.
In addition to car AC units, Denso Indonesia produces radiators, filters, sparkplugs, bus air conditioners, starter, alternator, reserve tank, washer tanks, horns, fuel filter and compressors.
Denso Indonesia exports its sparkplugs to Malaysia, New Zealand, Australia, China, Thailand, Vietnam and Singapore. It also exports AC parts to Malaysia, Thailand, Japan, North America and the Philippines. It has successfully contracted for exports of bus AC components to Australia, Taiwan, the Philippines, Thailand and Japan.
Its major customers in Indonesia include local affiliates of Mitsubishi, Suzuki, Daihatsu, Peugeot, Nissan Diesel, Honda, BMW, Mazda, Isuzu, Ford, Volvo, Yamaha, Vespa and Kubota.
Wiran Tandjungan cites economic lot size in the company's remarkable growth among Denso's Asian operations in Malaysia, Thailand, India, Taiwan and Korea.
With all the relevant factors of area, population, economic growth, political stability, production and labor costs weighed together, Indonesia has been selected as a hub for production of AC compressors in Denso's operations.
The decision was made based on both the demand of Indonesian consumers and the outstanding growth of the Asian market attendant to rise in usage of car ACs.
Economic efficiency as part of the regional operations was another important consideration, says Wiran.
"Through a complementary network, it follows that an AC system assembled in Thailand may use a compressor from Denso Indonesia or, alternately, an Indonesian vehicle may have a condenser or distributor from Thailand," he says.
Production of Denso Indonesia AC compressors is projected to increase from around 300,000 currently to 450,000 in the next century.
At the heart of Denso Indonesia's operations is the recognition of always striving to do better, particularly through improving human resources. As companies jostle for a piece of the global pie, this preparation is more vital than ever before.
Denso Indonesia provides on-the-job training for workers and practical immersion in the working environment. Employees are also undergo training at Denso's international headquarters in Kariya, Japan, to enhance their professionalism.
"All of this is meant to create Denso Indonesia human resources, which will be able to adapt to rapid changes," says Wiran.
The expansion at Cibitung is just one more step in anticipation of a brave new business world for Denso Indonesia. The Research and Development Department will initially focus on quality control, with design innovation a goal for the immediate future.
"This is intended to ensure Denso Indonesia is competent, bears added value, has international access and is innovative," said Wiran.