Indonesia has become Taiwan’s No.6 market for machine tools in the first 10 months this year, according to chairman of the Taiwan Association of Machinery Industry (TAMI), H.T. Hsu.

The association’s statistics show that Taiwan’s exports of machine tools to the Southeast Asia surged 23.5% year on year in the Jan.-Oct. period this year, during which the island’s total machine tool exports increased 9.2% from the same period of last year to US$3.5 billion.

In the first 10 months this year, the island shipped US$16.9 billion worth of machines including machine tools, slipping 1.3% year on year. But in the meantime, the Taiwan’s exports to Indonesia grew 17.8%, making the nation Taiwan’s No.5 market for all machines.

Citing anticipations that Indonesia’s economy will expand at a brisk pace in the years to come, Hsu urged the Taiwan government to sign a free trade agreement with Indonesia as quickly as possible to remove the 5% tariff that the Indonesian government still imposes on Taiwan’s machinery exports to that country.

He noted Indonesia’s industries have heavily depended on inbound investments and Japanese are currently the primary sources. To minimize the cost impact of the revaluating Japanese yen, many Japanese enterprises have begun sourcing non- Japanese-made machines for their overseas production sites, allowing opportunities for Taiwanese equipment suppliers to sell machines to them due to considerable improvement in the quality of Taiwan-made machines.

The attractiveness of the Indonesian market to Taiwan’s equipment suppliers was recently proven by the energetic participations of the suppliers in a machinery trade show staged in early December Indonesia. A record number of some 200 Taiwanese equipment suppliers exhibited at this show, which pulled in a total number of 2,400 exhibitors from 38 economies manning 2,500 booths in 2012.

Industry executives estimated this show would bring Taiwanese equipment suppliers business worth around NT$650 million (US$22 million at US$1:NT$29).