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ollowing a better performance in exports this year and with a positive outlook going forward, state-owned weapon manufacturer PT Pindad has decided to seek new overseas markets for its products as part of its business expansion.

The company is looking for prospective buyers in ASEAN and other countries, such as the Czech Republic, Canada and China, as it has started to increase production capacity of its new plant for small-caliber ammunition in Malang regency, East Java, said its president director Abraham Mose recently.

With a bigger production capacity, the company expects to meet domestic demand for small-caliber ammunition, particularly from sporting users and shooting ranges as well as the Indonesian Military (TNI) and the National Police.

However, Abraham said the company would need to export its products as domestic demand alone would not be sufficient to match its greater production capacity.

It plans to increase its proportion of exports to 40 percent, up from the current 10 to 15 percent, of sales he said.

“We will reach [our target]. However, we need to comply with laws and regulations from the Defense Ministry and the TNI commander regarding exports,” he said.

Abdul Kharis Almasyhari, deputy chairman of House of Representatives’ Commission I, which oversees defense and foreign affairs, said the small portion of exports in Pindad’s sales was an indication of a lack of competitiveness compared to similar strategic industries in other countries in ASEAN.

“There is no other way than to increase production of munitions and offer more complete products, so that we can have a competitive advantage compared to other countries,” he said.

Pindad has invested 58 percent, or Rp 400 billion, of the total Rp 700 billion (US$51.78 million) it received from a state capital injection (PMN), to increase the capacity of its new small-caliber munitions plant in Malang.

It expects to raise the plant’s annual capacity to 275 million units of small-caliber ammunition by 2019 from 165 million units currently.

Pindad is also looking for strategic cooperation with other countries that already have the capability to build large-caliber munitions, such as South Africa and South Korea, Abraham said.

Aside from shipping munitions, the company is looking to export weapons to countries in the ASEAN region, while receiving customers’ multi-year orders for about 60,000 units of bombs.

This figure includes 30,000 units of the air-delivered Mk 81 bombs, while another 30,000 units of Mk 82s were on order, the price of which is set at around $2,000 each.

Indonesia booked $14.54 billion in exports in September, a 15.6 percent year-on-year increase from $12.57 in the same period last year, the Central Statistics Agency (BPS) announced on Monday.

Meanwhile, the remaining Rp 300 billion funds Pindad received from the PMN will be allocated to the company’s research and development divisions, including production of large-caliber munitions.

From its munitions and military tools sales, Pindad expects to book up to Rp 2.7 trillion in profits this year, 17.4 percent higher than the Rp 2.3 trillion it booked in 2016.

As for next year, the company is aiming to achieve profits of between Rp 2.9 trillion and Rp 3 trillion, Abraham said.