New opportunities in Indonesia: Businesses looking beyond Jakarta

Faced with the challenge of finding enough skilled carpenters at home to support its business, Singapore furniture manufacturer Tat Wai Enterprise has cast its net overseas.TechInAsia

“We want skilled craftsmen but there are not many in Singapore,” said Alfred Tan, Tat Wai’s executive director. Attracted by the prospect of cheaper labour, a bigger talent pool and a larger space, Tat Wai decided to expand its footprint in Indonesia. The company is now a tenant at Kendal Industrial Park in Semarang, also known as Park by the Bay, running a factory spanning 4,000 square metres. Officially opened on Monday (Nov 14), the 2,700-hectare Park by the Bay is a joint venture between Singapore’s Sembcorp Development and Indonesia’s PT Jababeka.

“We need more space and people. Other countries are too far for us. This park is only one and a half hours flight from Singapore and most importantly, we can find the tradesmen that we need over here,” said Mr Tan.

Tat Wai started its operations at Kendal in August and now employs about 30 Indonesians at its factory there. The company hopes to eventually hire and train 100 workers so they can take on more projects in Singapore. To meet the increasing demand for cost-competitive manufacturing in Indonesia, IE Singapore is focusing on promoting Kendal as one of the destinations for local companies to venture abroad.

It has been encouraging manufacturing companies through seminars to look beyond the traditional investment destinations such as Jakarta and the Batam-Bintan-Karimun area.

“The labour cost is much lower in Central Java. Probably it’s like lower than Jakarta by about 50 per cent and at the same time, there are a lot of workers there and they are starting to grow their manufacturing,” said Ivan Tan, IE Singapore’s group director of Southeast Asia and Oceania Group in an interview with Channel NewsAsia. He added: “What we have been telling the companies is that don’t just think of Indonesia as Jakarta. Don’t think that only Jakarta has business opportunities. It’s a very big country and the way that the government is pushing development is spreading out of Jakarta.” Read full report