Wed, 09 Mar 2005

Businesses in Indonesia find success in similiar culture

Adianto P. Simamora, The Jakarta Post, Jakarta

Many Indonesians would recognize the name Texmaco but not Ispat Indo. Both are Indian companies, each with different fates, and between them they represent the wide range of Indian businesses in Indonesia.

Texmaco is a business group that still has massive debts following the monetary crisis. One of its subsidiaries, Polysindo Eka Perkasa, has recently been declared bankrupt by the commercial court.

Ispat Indo, however, is little-known among Indonesians. Nevertheless, it is a one of a few Indian businesses here that has gone global from Indonesia.

Established in Waru, East Java, in 1976, Ispat Indo has brought such fortune to its owner, Laksmi Mittal, that those in his industry now call him the "King of Steel".

The firm, which started with one 60,000-ton capacity steel plant, now has operations in 12 countries -- Algeria, Canada, the Czech Republic, France, Germany, Kazakhstan, Mexico, Poland, Romania, South Africa, the United States and Trinidad -- with more than 135,000 employees on its payroll.

Data from the Coordinating Investment Board (BKPM) show that Indian investments in Indonesia stand at about US$800 million.

Indian investors first began coming to Indonesia following the signing of a trade agreement between India and Indonesia in 1978.

Most of the first wave of Indian companies set up here in the late 1970s and 1980s. Many of these focus on processing raw materials to make textiles, rayon, polyester yarn, viscose, staple fibers, cotton yarn and steel.

Later a follow-up agreement on the promotion and protection of investment in 1999 prompted a new wave of entrepreneurs as the Indian economy began to boom.

According to the Indian Embassy in Jakarta, there are currently at least 14 Indian joint ventures operating in Indonesia.

Indian joint ventures in Indonesia include Ispat Indo, Indo- Rama Synthetics, Five Star Industries Ltd., Indo Bharat Rayon, Elegant Textile Industry, Sunrise Bumi Textile industries, Gokak Indonesia, Jaykay Files Indonesia, South Pacific Viscose, Lotus Indah Textile Industries, Bitratex Industrial Corporation, Kewalram Indonesia, Essar Dhananjaya and Indo Liberty.

Unlike other international ventures, none left Indonesia during the crisis. Some of them even expanded their operations in Indonesia, including Indo Bharat Rayon.

Company vice president for marketing Kayur Raiji said: "We are very happy doing business in Indonesia, and we are expanding our operation here."

He said Indo Bharat Rayon's plant in West Java has the capacity to produce 240 tons a day of a wide range of fibers, which it plans to expand to 425 tons a day.

Indo Bharat Rayon, which produces mainly viscose stable fiber (VSF) is part of the Aditya Birla Group, one of India's largest business houses in India. In addition to VSV, the group is also active in the textiles sector through PT Elegant Textile Industry and PT Indo Liberty Textile.

But the nature of business being done here is also changing, with more Indian software companies entering Indonesia.

NIIT, LCC Infotech and Aptech have established computer education centers in Indonesia and plan to extend their networks, as others look ready to follow.

IRCON, a major Indian public sector company, is carrying out a road construction project in Indonesia, and is actively seeking railway projects.

Meanwhile, in the oil and gas sector, the Hindustan Petroleum Corporation has shown interest in entering the Indonesian market.

Analysts say the presence of more Indian companies in Indonesia will improve trade and investment relations between the two countries.

The increased investment has led to a substantial spurt in bilateral trade. While two-way trade reached US$2.4 billion in 2003, it is expected to cross the US$3 billion threshold for last year.

Mathew Ninan W., a technology adviser working at a locally owned company Matracom Indo Sejati said cultural similarities and a shared history helped business relations between the two countries. Indians had a good record of success in Indonesia, which caused more companies to follow them here, he said.

"Historically, we have had trade relations and we even share some common religious backgrounds" he told The Jakarta Post recently.

Most Indians picked up the Indonesian language quite easily and many could quickly begin talking with Indonesians without much accent.

"When they can communicate well and freely without any risk of misunderstanding, then half the battle is won," he said.

The acceptance level among locals of Indians was also higher than expatriates of other nationalities working in this country, he said.

The difference between the Indian businessmen and other expatriates may be that we can easily understand the working system in this country, as there are a lot of similarities between the two nations," he said.

Corruption was also a common part of life in India as it is here and Indians could deal with this fact of life more easily than other nationalities, he said.

Meanwhile, president director of textile company Five Star Industries Ltd,. Manjit P. Chaudhury said Indians developed similar strategies for running business across the globe.

"Indian businesspeople are focussed and hard-working, and they know how to achieve their targets," he said.

"They are also very cost-cautious, they are good at accounting so that they know where the losses (in the company) come from," he said.

Many Indian Marwari business groups still apply the age-old cost accounting system known as the Partha. Under the system, the profit and cash flows of the company are calculated and analyzed daily.

Chaudhury said Indian businesspeople were also creative at cost-cutting aimed at maintaining prices of products at competitive levels.

They were generally computer literate and had a good understanding of English, which allowed them to get the latest market news and business trends from around the globe, he said.

"As a result, when the Indonesian markets slump, we become exporters," he said.





News Search/Filter
Transaction Rates
17 Oct 18
Buy
Sell
AED1
4,141.07
4,141.07
AFN1
200.00
200.00
ALL1
140.59
140.59
AMD1
31.42
31.42
ANG1
8,569.33
8,569.33
AOA1
50.52
50.52
ARS1
423.53
423.53
AUD1
10,858.36
10,858.36
AWG1
8,448.12
8,448.12
AZN1
8,934.44
8,934.44
BAM1
9,004.48
9,004.48
BBD1
7,605.45
7,605.45
BDT1
179.57
179.57
BGN1
9,003.57
9,003.57
BHD1
40,350.42
40,350.42
BIF1
8.49
8.49
BMD1
15,210.90
15,210.90
BND1
10,785.86
10,785.86
BOB1
2,200.85
2,200.85
BRL1
4,083.13
4,083.13
BSD1
15,210.90
15,210.90
BTC1
97,700,589
97,700,589
BTN1
206.69
206.69
BWP1
1,429.32
1,429.32
BYN1
7,214.06
7,214.06
BZD1
7,568.80
7,568.80
CAD1
11,758.18
11,758.18
CDF1
9.31
9.31
CHF1
15,357.25
15,357.25
CLF1
607,270.04
607,270.04
CLP1
22.74
22.74
CNH1
2,200.65
2,200.65
CNY1
2,200.64
2,200.64
COP1
4.91
4.91
CRC1
25.61
25.61
CUC1
15,210.90
15,210.90
CUP1
590.71
590.71
CVE1
159.44
159.44
CZK1
681.55
681.55
DJF1
85.45
85.45
DKK1
2,360.18
2,360.18
DOP1
304.54
304.54
DZD1
128.68
128.68
EGP1
849.34
849.34
ERN1
1,014.18
1,014.18
ETB1
545.75
545.75
EUR1
17,609.16
17,609.16
FJD1
7,139.77
7,139.77
FKP1
20,059.76
20,059.76
GBP1
20,059.76
20,059.76
GEL1
6,188.94
6,188.94
GGP1
20,059.76
20,059.76
GHS1
3,137.58
3,137.58
GIP1
20,059.76
20,059.76
GMD1
307.55
307.55
GNF1
1.67
1.67
GTQ1
1,968.42
1,968.42
GYD1
72.76
72.76
HKD1
1,940.85
1,940.85
HNL1
631.87
631.87
HRK1
2,374.42
2,374.42
HTG1
213.80
213.80
HUF1
54.70
54.70
IDR1
1.00
1.00
ILS1
4,177.22
4,177.22
IMP1
20,059.76
20,059.76
INR1
207.04
207.04
IQD1
12.76
12.76
IRR1
0.35
0.35
ISK1
128.88
128.88
JEP1
20,059.76
20,059.76
JMD1
113.78
113.78
JOD1
21,438.80
21,438.80
JPY1
135.39
135.39
KES1
150.69
150.69
KGS1
221.92
221.92
KHR1
3.72
3.72
KMF1
35.79
35.79
KPW1
16.90
16.90
KRW1
13.54
13.54
KWD1
50,187.90
50,187.90
KYD1
18,253.04
18,253.04
KZT1
41.42
41.42
LAK1
1.78
1.78
LBP1
10.07
10.07
LKR1
89.02
89.02
LRD1
96.88
96.88
LSL1
1,054.49
1,054.49
LYD1
10,999.87
10,999.87
MAD1
1,611.46
1,611.46
MDL1
892.72
892.72
MGA1
4.29
4.29
MKD1
286.31
286.31
MMK1
9.50
9.50
MNT1
6.11
6.11
MOP1
1,884.09
1,884.09
MRO1
42.60
42.60
MRU1
423.70
423.70
MUR1
442.82
442.82
MVR1
984.52
984.52
MWK1
20.91
20.91
MXN1
811.05
811.05
MYR1
3,662.25
3,662.25
MZN1
251.38
251.38
NAD1
1,054.02
1,054.02
NGN1
41.81
41.81
NIO1
473.40
473.40
NOK1
1,867.72
1,867.72
NPR1
129.18
129.18
NZD1
10,014.09
10,014.09
OMR1
39,511.39
39,511.39
PAB1
15,210.90
15,210.90
PEN1
4,565.70
4,565.70
PGK1
4,534.33
4,534.33
PHP1
282.56
282.56
PKR1
115.16
115.16
PLN1
4,107.61
4,107.61
PYG1
2.55
2.55
QAR1
4,177.67
4,177.67
RON1
3,773.49
3,773.49
RSD1
149.01
149.01
RUB1
232.85
232.85
RWF1
17.28
17.28
SAR1
4,054.77
4,054.77
SBD1
1,916.18
1,916.18
SCR1
1,116.88
1,116.88
SDG1
322.30
322.30
SEK1
1,707.13
1,707.13
SGD1
11,066.47
11,066.47
SHP1
20,059.76
20,059.76
SLL1
1.81
1.81
SOS1
26.27
26.27
SRD1
2,039.54
2,039.54
SSP1
116.77
116.77
STD1
0.72
0.72
STN1
716.81
716.81
SVC1
1,738.55
1,738.55
SYP1
29.53
29.53
SZL1
1,056.27
1,056.27
THB1
468.00
468.00
TJS1
1,613.89
1,613.89
TMT1
4,345.98
4,345.98
TND1
5,385.33
5,385.33
TOP1
6,596.53
6,596.53
TRY1
2,671.83
2,671.83
TTD1
2,256.63
2,256.63
TWD1
495.16
495.16
TZS1
6.64
6.64
UAH1
544.65
544.65
UGX1
4.02
4.02
USD1
15,210.90
15,210.90
UYU1
461.08
461.08
UZS1
1.85
1.85
VEF1
0.06
0.06
VND1
0.65
0.65
VUV1
136.84
136.84
WST1
5,816.37
5,816.37
XAF1
26.84
26.84
XAG1
222,976.18
222,976.18
XAU1
18,633,729.83
18,633,729.83
XCD1
5,628.35
5,628.35
XDR1
21,279.99
21,279.99
XOF1
26.84
26.84
XPD1
16,482,705.56
16,482,705.56
XPF1
147.56
147.56
XPT1
12,817,490.07
12,817,490.07
YER1
60.75
60.75
ZAR1
1,072.69
1,072.69
ZMW1
1,258.28
1,258.28
ZWL1
47.18
47.18
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services