ASEAN KEY DESTINATIONS
Despite current pressure on the economy, heavy equipment manufacturers are confident about business as demand for machinery has risen thanks to increased spending on infrastructure.
Based on the revised state budget, the government has allocated Rp 208 trillion (US$18.19 billion) for infrastructure, an increase of Rp 10 trillion from that initially proposed.
PT Gaya Makmur Traktor (GMT) president director Tjandi Mulyono said the distributor of a number of heavy equipment brands such as Wirtgen, Takeuchi and Xuzhou Construction Machinery Group is confident that his company will see a 30 percent increase in sales in the second half of this year.
“Even with Indonesia’s current economy, we booked a 25 percent increase in the first half of this year compared to last year,” Tjandi said on Wednesday on the sidelines of a heavy equipment expo that will run until Sept. 7.
With the increase in sales, GMT expects to gain from after-sales services.
However, Tjandi acknowledged that the weakening of the rupiah had deterred a number of customers from placing orders while they waited for the rupiah to strengthen, because most heavy equipment was sold in foreign currencies such as dollars, euros or yen.
Volvo, on the other hand, has introduced new models of heavy equipment to keep its foothold in the market, such as the Excavator EC220D, the Volvo CE Excavator EC140BLCM and the Articulated Hauler A35F.
Volvo Group executive vice president Joachim Rosenberg said that with the company’s current market share of 23 percent, it was still confident in Indonesia’s market despite the fluctuating currency.
He said that the volatility being experienced in Indonesia was also being felt in other countries, and noted that Indonesia’s economy was “good for the long run”.
“With its macroeconomic and demographic situation, Indonesia is well positioned to be a country with a developed economy,” said Rosenberg.
He said that the growth in infrastructure would result in stronger sales for the company as there was strong domestic demand.
Volvo Group also plans to build a spare parts warehouse in Balikpapan, East Kalimantan, where many companies that use it equipment are located.
In addition, the World Economic Forum (WEF) recently published the 2013-2014 global competitive report, revealing Indonesia’s improvement in infrastructure as the reason for the country’s leap to 38th rank this year from 61 previously.
“After years of neglect, Indonesia has been boosting infrastructure spending to upgrade roads, ports, water facilities and power plants,” said the report. (asw)
Indonesia,infrastructure,Economy, equipment,heavy equipment ,manufacturers
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below