Kamis, 02 Mei 2013

Indonesia Can Follow in Mexico’s Aerospace Industry Development

Aerospace in Indonesia has the potential to emulate Mexico. (JG Photo/Rezza Estily)
Aerospace in Indonesia. (JG Photo/Rezza Estily)
Indonesia has the potential to expand its aerospace manufacturing industry and can emulate Mexico’s, should it recognize its strengths and know how to face challenges, a Mexican official said.

Ildefonso Guajardo Villarreal, Mexico’s Secretary of Economy, told the Jakarta Globe in Surabaya this past weekend that his nation’s airspace industry has been growing tremendously over the years, and it is a step above automotive manufacturing, which is one of the country’s largest industries.

Mexico is the fourth-largest automotive exporter in the world and has one of the biggest production capacities in the world, he says.

“Sometimes your capacity in a different area gives you the base to have the potential to experience new development in different areas,” Guajardo said. “So being a country with a strength in the automotive industry gave us the capacity to innovate and jump into the aerospace industry.”

Indonesia may emulate this type of success, he said.

According to data from Mexico’s Secretariat of Economy, there were 248 companies working in the industry by the end of 2011 with $4.34 billion worth of exports from Mexico.

The Southeast Asian nation has a growing automotive manufacture sector with carmakers Toyota Motor, Nissan Motor and Daihatsu Motor expanding their facilities to take advantage of growth in the middle class. Car sales topped 1 million units for the first time last year and might achieve that mark this year.

The jump to aerospace manufacturing can be done “if you can pinpoint the strategic changes that you have to make in order to have a supply chain and insert it in the value chain circuit of the aerospace industry,” Guajardo said.

He said the country has to start “by looking at what is going on in Indonesia in terms of the aerospace industry and in order to do this link, the country needs to jump into possibilities.”

Indonesia has Dirgantara Indonesia, the only state aircraft manufacturer, but the company has been struggling financially since 2007 and it started a corporate restructuring in 2010.

Dirgantara is undercapitalized and cannot compete with the global market’s big players, Alvin Lie, an aviation observer in Jakarta, said on Wednesday.

“Dirgantara may fare better [in competition] if it concentrates on its capability in selling components instead of building a whole aircraft,” he said. “They have good human resources and a good concept. They just need to focus on their strength.”

Dirgantara was formerly called Industri Pesawat Terbang Nusantara or IPTN. Former President B.J. Habibie, an engineer who trained in Germany, served as chief executive of IPTN during Suharto’s administration more than a decade ago.

Other aircraft-related manufacturers, though, have capitalized on Indonesia’s manufacturing capabilities.

Honeywell International, a diversified US manufacturer, has invested in an avionics plant on Bintan Island that produces avionic radio systems, communication and navigation equipment and other cockpit components for aircraft.

These products are used in corporate jets, helicopters and the largest commercial aircraft in the world.

Alex Pollack, president of Honeywell International in Indonesia, said that the company’s aerospace facility in Bintan is one of the most modern aerospace assembly facilities in Southeast Asia.

“The aerospace industry, just like every other industry, is facing globalization in manufacturing. Honeywell from its Bintan facility not only manufactures for Boeing, but for Airbus also,” he told the Jakarta Globe in an e-mail.

“More and more aerospace companies like Honeywell will find Indonesia as its home. Being close to most of the top five fastest-growing airlines in the world, also has its advantages,” Pollack added. Southeast Asia is home to two giant low-cost carriers, AirAsia and Lion Air.

Pollack said, that having lived in Indonesia for more than 15 years, he noted that the country has some of the best engineers and some of the most innovative people in the world. However, he also said that the country is still lacking in skilled workers and talented professionals.

“Due to the high level of trained people required and limited resources in Bintan, some of the employees come from Singapore and travel to Bintan each day,” he said. The site started operation in October 2005 and employs about 200 people.

Pollack added that other challenges it faces in Indonesia also includes concern on protection of intellectual property and unclear tax laws.

Ilthabi Rekatama, an Indonesian company chaired by Ilham Habibie, is conducting a feasibility study on building an airplane factory in Batam city on Riau Island.

The company may invest $500 million for the plant. Ilham Habibie is a son of B.J. Habibie.

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