Flourishing economic ties between Taiwan and Indonesia bring mutual benefits.
Like many other Taiwan manufacturers active in Indonesia, Hu Lane Associate Inc. has high hopes for the economic prospects of the world’s fourth most populous country. In March the enterprise, which specializes in automotive connectors and other vehicle components, broke ground at its newest overseas factory site located in the West Java city of Bekasi. Slated for completion next year, the facility will be 10 times larger than Hu Lane’s nearby plant and will expand the company’s presence in the electric vehicle (EV) sector.
“The country’s potential is huge due to its rapidly expanding economy, large population and heavy reliance on private vehicles, although public transportation in Jakarta has improved in recent years,” said Ritchie Glen, director of Hu Lane’s subsidiary in Indonesia. Statistics bear out Glen’s optimistic economic expectations: in 2022 Indonesia posted an impressive growth rate of 5.31 percent, the highest in nine years.
Hu Lane Associate Inc.’s Indonesia subsidiary specializes in manufacturing vehicle components such as automotive connectors. (Courtesy of Ritchie Glen)
Indonesia is Taiwan’s second most popular Southeast Asian investment destination in terms of total accumulated capital and assets from 1959-2020. Around 2,000 Taiwan businesses operate in the country, hiring approximately 1 million local workers. Among them is Pou Chen Group, which set up its first shoe factory in Indonesia in 1992. With five plants employing about 100,000 workers today, it is the biggest Taiwan company in the country by workforce size.
According to Tseng Yu-hua (曾裕華), former director of Jakarta-based Indonesia Taiwan Chambers of Commerce, the manufacturing sector in the country also attracts skilled labor from Taiwan to join local businesses run by Chinese Indonesians, with the first wave arriving in the 1970s and ’80s. “Many later set up their own enterprises producing goods ranging from paper, textiles and furniture to cement, creating job opportunities and bringing in new manufacturing techniques,” said the entrepreneur, who started a steel-processing business there in the 1980s.
Tailored Wares
As Indonesia’s manufacturing sector continues to boom, its domestic market has steadily matured, attracting service-oriented businesses from Taiwan. One of the first to make inroads into the country was the world-famous dumpling restaurant chain Din Tai Fung, which opened its first Indonesian location in 2005. About a decade later came Mooimom Co., which was founded by a married couple from Taiwan.
Founded by Taiwan entrepreneurs, Mooimom has a solid presence in Indonesia with around 70 retail locations across the country. (Photos by Oscar Chung)
“Since I first visited in 2008, I’ve been deeply impressed by the country’s fast development, so my wife and I decided to relocate,” said James Chou (周靖棠), who moved to Jakarta with Carolyne Lee (李沆澎) in 2012. They initially sold imported goods to locals via e-commerce platforms before deciding to design and market their own products for expectant and nursing mothers under the brand Mooimom four years later. “Our strength is that we live here and know what locals want while also adhering to international quality standards,” Chou said.
To adapt to the local market, Lee, a designer by trade, partnered with Indonesian peers to create textile products catering to Muslim women. She also gave birth to her third child in Indonesia to fully understand the pregnancy, delivery and postpartum experience in the country. The couple’s diligence has paid off, with approximately 70 retail locations across the country selling Mooimom merchandise today. The company is now expanding its presence in the region with new offices in Singapore and Vietnam, while promoting green consumption with products that have a minimal impact on the environment.
Eco Focus
Prominent Taiwan-headquartered manufacturing company Delta Electronics, which has production, sales and R&D centers worldwide, is also helping advance Indonesian President Joko Widodo’s plan to transition to a green economy. Since opening an office in Jakarta nearly 10 years ago via its subsidiary in Thailand, Delta has installed more than 20,000 smart, energy-efficient streetlights in Jakarta and set up the country’s first EV charging stations in the city. The company decided to step up operations in Indonesia last year, relocating executive Johnny Tam (譚中一) to Jakarta. “The move demonstrates Delta’s resolve to deepen its involvement here,” said Tam, who previously managed the Indonesian branch remotely from Thailand. “Only by living in the country can I gain a comprehensive understanding of the local market.”
A line of public EV charging stations for the 2022 G20 Bali Summit, provided by Delta Electronics, demonstrates the depth of the company’s business relationships in Indonesia. (Courtesy of Johnny Tam)
Delta is now deploying EV charging stations across the country, with over 4,000 already in place. Its work has made such an impact that it was chosen to be the main supplier of public charging stations for the G20 Bali Summit last November. The decision reflects the essential role Delta plays in forging a greener future in Indonesia, and it is not the only Taiwan enterprise doing so. In June representatives of 10 companies flew to Jakarta to discuss their participation in building Nusantara, the country’s future capital, on the island of Borneo.
According to Frank Lu (路豐璟), director of the Economic Division of Taipei Economic and Trade Office in Indonesia, a total of 12 groups from Taiwan visited Indonesia to explore business opportunities during the first half of this year. “Indonesia is very interested in cultivating economic ties with Taiwan, and Taiwan companies have responded enthusiastically,” Lu said. “Business relations are especially warm right now and are expected to keep growing apace.”
Write to Oscar Chung at mhchung@mofa.gov.tw