SINGAPORE — An alliance of thrifty Singapore entrepreneurs expanded plastics work into Indonesia in recent years and, through a conservative structure, survived the region's subsequent financial turmoil.
``We walked through the crisis with no problems,'' Albert Leong, group finance director of Preshion Engineering Plastec Pte. Ltd., said in a plant interview in Singapore.
The small-business people forming Preshion in July 1995 needed a manufacturing environment with costs lower than those in Singapore. They selected Indonesia for its larger potential market rather than neighboring Malaysia, Leong said.
The Singapore core includes Dave Plastic Industries Pte. Ltd., OM Spring and Printing Pte. Ltd. and Harper Engineering and Mold Workshop. All lease nearly contiguous space in Tampines Industrial Park.
The closely linked Singapore operations in molding, tooling and secondary processes employed 45 and had 1995 sales of S$4 million (US$2.8 million). Assets included six Toshiba presses of 22-45 tons. Secondary processes include tampo printing, silk-screen printing, hot stamping and paint spraying.
As of Dec. 31, Preshion's principals employed 250, had sales of close to S$8 million (US$4.8 million) and also operated two Indonesian plants. It is contemplating a third plant in Indonesia with 10,000 square feet.
So far, amidst the chaos, ``the Indonesian government is protecting our operations,'' Leong said, but a pending election may affect growth plans.
Civil unrest is occurring at a significant distance from the plants.
``Depending on the outcome of the June election, we may add three presses in Indonesia,'' a 170- and two 250-ton models, Leong said.
``Either civil war breaks out, or there will be an influx of business,'' he said.
Meanwhile, Indonesian businesses including Preshion are speeding April-May production schedules to build inventory ahead of any disruption.
In Indonesia, the group operates 11 Toshibas in 15,000 square feet in Surabaya and, 400 miles away, six Toshibas in 10,000 square feet at a Jakarta site in use since October 1997. The Singapore facility has 12 Toshibas. Clamping forces range from 22-140 tons.
The specialists generate about 50 percent of their work for alliance customers such as JVC, Matsushita, Samsung, Sony and Honda's motorcycle unit. Audio and video applications make up 70 percent of Preshion's business.
Singapore operations account for 55 percent of Preshion's dollar value and 40 percent of its production volume.