Japan’s Sakai Heavy Industries doubling soil compactor output in Indonesia

25, Jul. 2019

A road stabilizer to be produced by Sakai Heavy Industries Ltd. in Indonesia starting next year is shown in a photo taken in West Java on July 23. Behind it is a vibratory soil compactor already locally produced.
A road stabilizer to be produced by Sakai Heavy Industries Ltd. in Indonesia starting next year is shown in a photo taken in West Java on July 23. Behind it is a vibratory soil compactor already locally produced.

JAKARTA, NNA - Japanese construction machinery maker Sakai Heavy Industries Ltd. has launched a new plant in Indonesia to double its annual output capacity of vibratory soil compactors in the country to 2,400 units, while reinforcing its sales network there.

A ceremony was held on Tuesday to inaugurate the plant in the East Java Industrial Park (EJIP) in Cikarang, West Java Province, which started production this month, Sakai said in a statement.

Operations undertaken at the two existing Sakai plants nearby will be completely incorporated into the new site by the end of this year. The new plant has a site area of 51,829 square meters, about double that of the two existing plants combined, according to the Japanese firm.

Sakai, which has a 70 percent market share of road maintenance and repair machinery including vibratory soil compactors at home, will also start direct sales in Indonesia in August in addition to its previous marketing through local agents, the statement said. It will embark on production of large-sized heavy machinery in Indonesia next year as part of its endeavor to expand its sales at home and abroad.

The new plant was purchased last year from an affiliate of major Chinese home electric appliance maker Skyworth Group Ltd. with a total investment of $20 million.

Sakai has three subsidiaries in Indonesia: PT Sakai Indonesia, which manufactures export products, PT Sakai Road Machinery Indonesia, which produces machinery for the domestic market, and PT Sakai Sales and Services Asia, founded in 2017 as a sales division.

The two manufacturing companies will be merged by January next year following the integration of plants. Sakai Sales and Services Asia, which has so far specialized in after-sales services, will also engage in sales hereafter. “We have established a triune structure incorporating production, sales and services,” Sakai Indonesia President Director Hiroshi Baba said. “We want to contribute to our construction of infrastructure worldwide.”

Of the machinery units manufactured in Indonesia, about 60 percent are destined for export to wide-ranging destinations, including Southeast Asia and the Middle East. Road stabilizers, which are not widely used in Indonesia, will be added to the production lineup next year for sales at home and abroad.

PT Sakai Indonesia has a domestic market share of about 40 percent in vibratory soil compactors, well ahead of the second-biggest share of 15 to 20 percent held by German company BOMAG. Sakai said it is the only company in Indonesia engaged in assembly production but is outdone in sales prices by competitors. “Our products are simple to use and durable. We are supported as a reliable brand,” Baba said.