with Takashi Aso, President Director, Metbelosa, PT
Metbelosa’s history dates back to 1982, when Osaki decided to join with two other local companies to establish this factory. What was the opportunity identified by Japanese investors at that time that made Indonesia an attractive investment destination?
Previous to the 1980s, Japan had established great export relations with Indonesia bringing products such as automobiles, food and textiles, as well as electrical meters. Under the Suharto regime, a ban on Japanese products was imposed as a means to boost the local economy, however, he also provided incentives to companies that had been exporting in Indonesia to come and set up their operations here. Rather than banning imports altogether, Suharto provided advantageous taxation, privilege and benefit to companies that invested in building factories in Indonesia, as long as they committed to employing a majority of local workers. This was a very unique and unusual policy, and Japanese investors considered that their relationship with Indonesia and the great potential of this market were too important to give up. As a result, many Japanese companies decided to build factories in Indonesia, including Toyota, Ajinomoto and Teijin, etc. in order to supply the local market without exporting from Japan.
In the case of Metbelosa, we were probably the second generation of this kind of investment wave from Japan. When Osaki expressed interest in setting up their operations here, the government requested that we use the land and facilities of a former state-owned company, Metrika, whose factory was empty. Our partner, Mr. Gobel, who was very interested in producing KWH meters in Indonesia, traveled to Japan to convince my boss that this was a good investment in the interest of Osaki. In the end they agreed, and Mr. Gobel became our Indonesian partner through which Osaki invested and provided the capital to set up what today is Metbelosa. As a matter of fact, the name Metbelosa is a mixture of abbreviations from the three companies that created this enterprise; Metrika, Gobel, and Osaki.
Metbelosa began production in 1982 and has produced more than 12 million KWH meters since then, and this year we celebrate our 30th anniversary. We are proud to contribute to the growth and development of Indonesia throughout all this time and look forward to doing so in the future as well.
After 30 years of manufacturing in Indonesia, what is your full range of products and how has this evolved?
Our production facilities are designed to manufacture mechanical meters, including single and multi phase KW meters. The demand for these products has been quite high since the beginning and today there is a current demand of 2-3 million single-phase meters every year in Indonesia. As one of the leading manufacturers of electrical meters, we have been enjoying this high demand that is fueled by the country’s rapid economic growth.
In addition, just recently PLN shifted its policies to use electronic, especially pre-payment meters, rather than mechanical meters for its operations. Under such policies, all new households will have a pre-payment meter installed and eventually PLN would like to replace all meters with the pre-payment versions. Pre-payment meters offer the advantage of improved cash-flow for PLN because the money is received instantly, and it also guarantees that customers will pay for the electricity they are using. At the end of the day this also benefits us indirectly because PLN is able to pay us within a shorter amount of time.
Due to such policies, we are now shifting from mechanical meters to electronic ones in order to satisfy the demand of our sole costumer, PLN. Previously, we used to export our products to many countries in the world, but today we have decided to focus entirely on the domestic market as there is sufficient demand here to keep us occupied. Especially now that we have to shift to the pre-payment meters, we need to catch up with PLN’s demand as quickly as possible. As an example, the latest tender posted by PLN for pre-payment meters for Java-Bali was for 1.9 million meters, which is a lot higher than what we had expected. Due to this, we now see a sharp increase in competition with foreign players wanting to take over this share of the market, particularly companies from China that have the capacity to do so.
Given the heightened competition, how is Metbelosa positioning itself to remain the leader of meter producers in the fast-paced Indonesian market?
The Indonesian KWH meter market is led by 3 major Japanese companies, namely Fuji, Mitsubishi and ourselves, and one American company, Itron. These players are present all over the world and we are already used to competing against them in most every market. For this reason products and strategies are naturally suited to compete with such companies because our goal is to differentiate ourselves from them on a global scale.
As part of the global trends, we are now moving to pay more attention to smart grids and smart metering, which is something we wish to do here in Indonesia as well. We have to newly develop products directly linked to the smart grid, which is why Osaki recently just completed a merger with Singapore-based EDMI. EDMI is a medium-sized electronic metering company that is very competitive in European markets and especially in British Commonwealth countries. Osaki does not have a significant presence in such markets, which is why this merger will create great synergies for us on a global scale.
In response to all these opportunities we are soon to complete our second factory here in Indonesia, specifically designed to produce electric KWH meters only. We are hoping to complete the construction of our new facilities by the end of May 2012 and will begin production one month later.
Considering your choice to further invest in Indonesia by building additional manufacturing facilities, what are the advantages that this country offers to produce locally?
The first advantage that Indonesia offers is its large pool of human resources and labor power that is known for its high performance and commitment to quality. Furthermore, this labor is still available at a competitive cost, which is something that China, for example, is having a hard time to maintain. The other advantage of producing locally is simply the ability to effectively supply the local market, which is extremely attractive, with a population of 240 million, simply because of its sheer size. Indonesia’s GDP is comprised mostly of local demand, close to 70%, which is quite unique when compared to other ASEAN countries. Any manufacturer in Indonesia has the advantage of producing its products locally and having them consumed here as well.
Speaking about human resources, how do you attract and retain the most-skilled workers in the industry?
In my opinion it all comes down to the philosophy and culture of the company. If there is a general culture of respect and mutual understanding, then employees will automatically want to work here and will not be tempted to leave their jobs. The most important element is to make sure that everyone is happy to work together as this generates faithful employees that care about the work they do. One last thing is to maintain the trust between you and your employees, because as soon as this is broken, then the relationship will fall apart. At the end of the day it is almost like a big family, and as we are Japanese we have the same values as Indonesians, which places family first.
Since 2009 the transmission and distribution of electricity has also been opened up to private companies. Even though, until now, there has been very limited activity in this regards, what prospects do you see to target private companies in the future?
For the time being our sole focus in the Indonesian market is to supply to PLN, as they are the single buyers at the moment. In the future, if other opportunities present themselves we will certainly explore them. We have no problem in supplying to other customers, but for now this is not one of our priorities as there is more than sufficient demand from PLN.
What would you like to achieve for Metbelosa over the next five years?
I am counting that PLN’s shift to pre-payment and smart meters will continue beyond a decade, and it is my aim to have Metbelosa supply this shift. Our mission is to produce the largest quantity of meters as possible to meet PLN’s demands and to compete with all the companies in the market. In order to do this, my mission is to improve Metbelosa’s profitability and cost structure in order to grow the company and make it healthier. At the end of the day, all of our efforts are in the interest of improving the lives of Indonesian people and assisting the country in its social and economic development.