BookTitleToyota Tsusho 70-Year History

Summary

Toyota Tsusho 70-Year History

3 Business Development in IndonesiaDiverse Business Development Centered onAutomobilesWhereas Thailand recovered quickly after the Asianfinancial crisis of 1997?1998, Indonesia’s recovery wassluggish. The Indonesian economy did not take off untilthe 2010s, when the automobile market in Indonesia sawrapid growth. In the second half of the 2010s, Indonesia’sgrowth rate was lower than expected due to delays ininfrastructure development, but with its huge population,expectations for market expansion remained high.Throughout this time, Toyota Tsusho continued toactively develop businesses and invest in Indonesiathrough its subsidiary PT Toyota Tsusho Indonesia.Toyota Tsusho promoted businesses in automotivefields, such as in the materials of metals and syntheticresins, in automobile parts, the Techno Park business,and in used car auctions (i-BID), and engaged inexecuting the TRY1 strategy in nonautomotive fields.Toyota Tsusho took on the challenge of launchingbusinesses that would capitalize on the improvedstandard of living and increasingly diverse lifestylesof people in Indonesia. These included businesses inthe automotive sector, such as the molten aluminumbusiness, and in nonautomotive fields, such as a flourmilling business to respond to growing demand forflour in the country, PET bottle manufacturing andcontracted filling businesses, a hotel residence businessin response to a lack of accommodation facilities, andmedical businesses involving such clinical testing. ToyotaTsusho realized that Indonesia is a country with a veryyouthful population, offered more growth potential thanThailand. The company therefore decided to also take onport development and operation projects that aimed toaccelerate lagging infrastructure development.Entering the Food SectorIn October 2011, Toyota Tsusho partnered withMalaysian foodstuff giant Malayan Flour Mills Bhd.(MFM)and invested in a flour miller established byPT. FKS Capital, a major Indonesian foodstuff group.In Indonesia, consumer needs were diversifying asthe middle class expanded and urbanization increaseddue to economic and population growth. This caused asteady increase in flour consumption, making it almostinevitable that Indonesia would become the largest wheatimporter in Asia. In anticipation of this prospect, ToyotaTsusho entered the local flour market by investing ina flour miller tied to Indonesia’s primary processor offoodstuffs.In 2012, PT. Hokkan Indonesia, a company establishedas a joint venture between Toyota Tsusho and HokkanHoldings Ltd., started commercial PET bottlemanufacturing and filling operations. The joint ventureproved successful, prompting the construction of asecond line in 2013 to meet growing demand.Entering the Hotel Residence BusinessIn March 2013, Toyota Tsusho established PT. TTLResidences as a joint investment with the Lippo Group, aleading Indonesian conglomerate; Toyota Housing Corp.;and PT. Tokyu Land Indonesia, a member of the TokyuLand Corp. Group. This enabled Toyota Tsusho to engagein the hotel residence business, with PT. TTL Residencesresponsible for development and administration. Thatnew company launched a construction project in theBekasi region’s Lippo Cikarang district to build anaccommodation and residence facility that provided highquality,Japanese-style services. The facility, Axia SouthCikarang, was opened in September 2014. The areawas chosen because it contained many industrial parksfor Japanese businesses and had far fewer high-qualityaccommodation and housing facilities than in Jakarta. Asecond wing was opened in April 2016, bringing the totalnumber of guest rooms to 405.PT. TT Techno Park IndonesiaAxia South Cikarang160