Toyota opens aluminium engine plant in West Java, Indonesia

Toyota Motor Manufacturing Indonesia, a local unit of the Japanese automotive giant, has inaugurated its fifth factory in the country on Monday in Karawang International Industrial City, an industrial area in West Java.

The opening marks a significant milestone for Indonesia after the country took control of its domestic aluminium supply three years ago, as part of its aspiration to to add more value to its natural resources. The factory will produce aluminium-block engines, known as R-NR, for domestic and Asian markets, Koei Saga, senior managing director at parent company Toyota Motor Manufacture, said.

The company chose Indonesia as its third country in which to establish engine manufacturing, after Japan and China, as the country is the world's largest producer and consumer of aluminium, Saga said.

The engine is cheaper to operate and generates smoother vibrations during operation due to its lighter weight compared to an engine with steel-blocks, TMMI's president Masahiro Nonami said. He further added the company sourced 80 percent of its material domestically.

Toyota has two other factories in Sunter, in northern Jakarta, that produce steel-block engine for its Innova and Fortuner cars.

Indonesia took over Indonesia Asahan Aluminium, or Inalum, from a Japan consortium in 2013 after a 30-year agreement expired. Under the agreement Inalum had to sell 70 percent of its output to Japanese buyers with the remaining to domestic market.

New state controlled management reduced export of the raw material to the East Asia country in favor of supplying local industries. Inalum is the country only aluminium smelter, capable of churning out around 300,000 tons of the metal ingot a year.

Saleh Husin, the industry minister, said he hoped Toyota to continue to develop local products and manufacturing capability. "The government hopes Toyota also improve the quality of local components industry," Saleh said.