JAKARTA – A 100 billion rupiah (S$8.4 million) tin-processing plant is being built in Batam by the younger brother of Indonesian President-elect Prabowo Subianto, with the aim of supplying key raw materials to electronics makers based on the industrial island and in the region.

The plant by Mr Hashim Djojohadikusumo’s company Solder Tin Andalan will source raw tin from a mine in the tin-rich Bangka Belitung islands off Sumatra, 570km south-east of Batam.

That tin mine is operated by Arsari Tambang, a company controlled by Mr Hashim, a prominent businessman.

He told reporters at the plant’s ground-breaking ceremony that he hopes to tap demand from manufacturers such as electronics makers that had relocated from China to South-east Asia.

The plant will churn out, among other things, solder paste and solder wire – crucial materials used in printed circuit boards.

Mr Hashim said the plant will benefit from the relocation of electronics manufacturers to South-east Asian countries such as Vietnam, Malaysia and Thailand, and he expressed confidence that those relocated plants will likely be buyers of Solder Tin Andalan products. 

“Among the main sources of solders (for global supply) are Malaysia and India. Our target is to get some of their market share, relying on the tin resources in Indonesia. We can operate more competitively,” he said. 

Mr Hashim, 69, said the project dovetails with President Joko Widodo’s downstreaming policy that prioritises the processing of natural commodities in Indonesia, thus moving the country higher in the industrial value chain.  

“President-elect Prabowo Subianto has affirmed... and has vowed that the downstreaming programme will continue. The establishment of this plant is one of his commitments,” he said at a press briefing in Batam on May 10.

Defence Minister Prabowo, 72, will be inaugurated as Indonesia’s eighth president in October, when Mr Widodo’s second and final term in office ends. The full name of Mr Prabowo, a former army general, is Prabowo Subianto Djojohadikusumo, though he has used the shorter version of his name since his military days.

The late father of the two brothers, Mr Sumitro Djojohadikusumo, was one of Indonesia’s most influential economists who held ministerial positions under presidents Sukarno and Suharto.

The Solder Tin Andalan plant is slated to be ready in five months. It is being built in the Tunas Kabil industrial park in Batam, a major industrial island south of Singapore.

The plant will hire 320 workers and initially have an annual production capacity of 2,000 tonnes of processed tin, but it has ample room to scale up as the export market that can potentially be served by Batam is estimated to be 16,000 tonnes per year.

Mr Hashim said Solder Tin Andalan has readied 100 billion rupiah to fund the plant’s construction and another 300 billion rupiah as working capital, among other things, to source the raw tin from Bangka Belitung.

Solder Tin Andalan chairman Aryo Djojohadikusumo, Mr Hashim’s son, said at the same press briefing: “Our main target is the export market, but what is extraordinary about Batam is there are many existing electronics manufacturers operating here and the number will increase.” 

Mr Aryo said the mobile phone manufacturing industry in Batam is also a potential market to cater to, noting: “A lot of Indonesians are not even aware that iPhones are also assembled here.” 

Mobile phones of other brands, including Poco and Xiaomi, are also assembled in Batam.