PT Siemens Indonesia, the local arm of German technology company Siemens AG, says that it has expanded its locally manufactured product line by refitting a power generation factory used to build heavy components for the energy sector.
Helmut Schmitt, the general manager for the company’s power generation factory, said that Siemens Indonesia spent €5 million to upgrade existing manufacturing facilities and introduce new technologies at its factory in Cilegon, Banten.
“We have invested a total of €9.5 million from 2009 up to now to bring in new, upgraded equipment and install new facilities, in addition to buildings, to this factory,” he said.
The factory, built in 1989, is Siemens’s center for large steel fabrication, the assembly of turbines, and the manufacturing of heavy condensers for power plants.
Schmitt added that the company chose to equip the factory with up-to-date technology to allow it to increase productivity and efficiency without having to expand, which was not possible considering a lack of empty land around the factory.
The factory sits on 43,000 square meters in the Krakatau Industrial Estate.
“We can set ourselves in another place, but moving facilities is expensive,” Schmitt said.
He added that the refurbishment has allowed the firm to start manufacturing combustion chambers for gas turbines.
“We want to manufacture products with higher added value,” Schmitt said, adding that the factory sourced 65 percent of its manufacturing materials locally.
He said that 98 percent of the power plant components manufactured at the factory were shipped abroad, with steam and gas turbine power plants in Mülheim and Berlin in Germany, as well as Charlotte in the USA, as its main customers. Siemens has stake in the power plants.
The remainder, he said, went to joint venture power plant projects that Siemens has conducted with domestic energy companies.
The Siemens group of companies in Indonesia includes PT Siemens Indonesia, PT Java Power, PT Siemens Hearing Instruments and PT Siemens Industrial Power.
Siemens has a 50 percent stake in PT Jawa Power, a joint venture company that sells electricity to state-owned electricity company PLN under a long term contract.
Siemens, under Java Power, owns two 610-Megawatt coal-fired thermal power stations at the
Paiton II plant in East Java.
Schmitt added that Siemens aimed to raise sourcing from their domestic arms by up to 5 percent.
“This will also be done in cooperation with our joint venture partners,” he said.
Josef Winter, the new president director and CEO of Siemens Indonesia, said that the firm generated €249 million in revenue and booked in new orders worth €179 million in 2012 .
Siemens Indonesia also operates in the healthcare, industry, infrastructure and cities sectors.
He added that Siemens sought to “increase its footprint in Indonesia” through intensified business activities to capitalize on the healthy domestic economy, considering that Indonesia’s gross domestic product (GDP) grew at a rate exceeding 6 percent last year.
“We want to make sure that we are producing in Indonesia excellent low- and high-end technologies,” he said.
He added that gaining market share was one of the strategies the company would use to fortify their business here.
“We would like to gain market share by growing much stronger than the market through the use of the appropriate technology and having the right production facilities,” he further said.