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From Value One, Winter 2009-2010 No. 27
PT. Indonesia Steel Tube Works
Welded Steel Pipe Manufacturer Founded in 1972
Highest Sales Volume Ever Achieved
PT. Indonesia Steel Tube Works (ISTW), a welded steel pipe manufacturer founded in 1972 and a business investment affiliate in which Metal One has a stake, is an unusual manufacturer. A long-running Japanese-Indonesian joint venture with 380 employees, ISTW operates out of four locations: three plants in Indonesia (one in Semarang and two in Jakarta) and an office in Surabaya. We recorded our highest sales volume ever (82,000 tonnes) in 2008 thanks to the hard work of my various predecessors and our employees. We felt the repercussions of the financial crisis at the end of that year, but our employees have all been working full bore in 2009, with safety first, no delays, no defects, no losses, and do kaizen (improvement) as their objectives.
Our employees all work as hard as they can to create a sustainable company that will please customers, satisfy its shareholders, and enable its employees and their families to have secure livelihoods
Semarang Plant could be mistaken for a botanical garden.
Pipe Cutting Plant Boasts a Monthly Processing Capacity of 10 Million Pipes
The Jakarta Plant is approximately an hour by car from downtown Jakarta in the Pulogadung Industrial Estate. We have two plants—a pipe mill and pipe cutting plant—in this industrial park that manufacture and cut pipes to whatever size the customer desires and deliver products just in time inside and outside Jakarta. In particular, ISTW's greatest strength is its pipe cutting plant, which boasts a monthly processing capacity of 10 million pipes, can cut pipes in diameters down to 40 millimeters, and handles around 1,800 different sizes. We are pretty sure that this plant is the world's largest pipe cutting plant with all these capabilities in one location.
Jakarta pipe cutting plant building (equipped with a high-speed cutting machine)
Promising Market with Expanding Domestic Demand
The world's largest island nation, Indonesia comprises some 18,000 islands, and with 88.6% of its population of 240 million belonging to the Islamic faith, it is the world's largest Muslim nation. Described as a great Asian power, there was a time when direct investment from Japan flourished, but it was this ASEAN member that was hardest hit economically by the 1997 Asian currency crisis, with its GDP growth rate dropping to -13% in 1998. Then, the expansion of domestic demand was subsequently promoted, and domestic consumption grew. Private consumption now accounts for roughly 60% of GDP. The oil industry's share of GDP fell to less than 10%, and the economy's structure was converted to one that is not influenced by international markets. The lack of substantial impact from the fall 2008 financial crisis can be described as a successful outcome of this. After the BRIC countries, Indonesia's name received mention in coinages, such as VISTA and Next 11 as well as “Chindonesia” (China, India, and Indonesia), after the financial crisis, and the country is attracting attention as a promising future market.
Plenty to See in Indonesia
Indonesia has had sad news involving earthquakes, tsunamis, and terrorism recently. On the other hand, it has world-famous tourist and historical sites, including the Bali resort area for starters, as well as world heritage sites at Borobudur and Prambanan. The culture and art of Indonesia include batik, which was designated an intangible world cultural heritage in October of last year. I especially recommend Indonesia's great outdoors. It is quite fascinating to be able to come in direct contact with jungles produced by the subequatorial environment, untouched natural surroundings, and unusual animals. However, you do sometimes encounter scorpions on the golf course, so you need to be careful if you hit into the rough.
Seeing is believing, as they say, so you should definitely include a stop here as part of your Asian business trip itinerary and, if possible, bring a bottle of potato shochu (distilled spirit). [Laughs] I will treat you to Padang cuisine.
However, I have yet to get accustomed to the traffic jams and floods. I hope that Susilo Bambang Yudhoyono, the reelected president, will make some improvements.
February 2007 flood (correspondent's apartment at left)

Here it is—the tropical rain forest (from the first tee of the Jagorawi Golf & Country Club Old Course).

Padang cuisine (Indonesian-style curry dish) Once seated, a succession of dishes is placed in front of you, and the system is that you only pay for what you eat—once you try it, you are hooked!
Motorcycle Manufacturers Are Valued Customers
People who come to Jakarta are first of all amazed by the number of motorbikes, which flit around cars stuck in traffic jams at intersections and leave them behind. You often have to slam on your brakes, and sometimes a bike will run into your side rearview mirror.
Motorcycle manufacturers are actually valued ISTW customers. Nearly all of the 6.2 million bikes manufactured and sold in 2008 were targeted at domestic consumption. There was a pause in the rising growth trend seen at the end of last year (with 5.8 million units projected), but the motorcycle ownership ratio is one for every seven people and is expected to expand further, to around the level of Thailand's one for every three people. We are adding equipment and attempting to beef up our staffing as part of our efforts to offer services carefully tailored to our respective customers.
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