A commitment to building good business with Indonesia
A commitment to building good business with Indonesia
Australian resources giant BHP has operated in Indonesia for more than 20 years, with all its key business groups represented here, from coal mining in Kalimantan to steel plants in Java, as well as oil and gas exploration in the Timor Sea.
Until quite recently, BHP operated six distinct businesses, employing 3,512 people in five offices scattered around Jakarta, other parts of Java, Kalimantan and Sumatra. It was a confusing situation which, in the company's own admission, caused duplication and missed opportunities.
That changed early in 1995. When the company was looking at establishing parallel organizations in offshore locations. Indonesia -- with its variety of businesses and opportunities -- was considered the logical place to start.
Colin Smith, at that time Group General Manager of Finance, Steel Group, was the first country manager appointed under the scheme. Since then, the various BHP businesses have been grouped in a single building in central Jakarta. The move has been a catalyst for an even closer involvement in Indonesia's development.
"Helping BHP to grow is the primary objective of my being here," says Smith, now Corporate General Manager and President of BHP Indonesia.
"You have to build relationships. You have to build a profile that is appropriate for Indonesia and BHP's Corporate profile, attracts the best people to work for you and gives those people the necessary training and exposure to our culture."
BHP, Australia's largest company, invests about US$3 billion a year around the world and employs 64,000 people in 50 countries working in five main areas of business: steel, petroleum, copper, minerals and specialist service businesses in power generation, transport, engineering, information technology and insurance.
All but one of those businesses -- insurance -- are represented in Indonesia, where BHP and its partners (two of whom are PT Bakrie and Bros. and PT Krakatau Steel) have invested more than $200 million in expanding existing business operations and developing new businesses since 1993, providing employment for more than 3,450 Indonesians.
"Despite this, as in many countries, our profile in Indonesia is still minimal. We have to build on our global reputation if we want a long-term presence in places outside Australia, such as Indonesia," Smith says.
Ultimately, it's about relationships," he says. "Relationships between the company, the Indonesian Government, businesses and people. Too many western companies move into Asia and if they're not successful within 12 months, they pack up their bags and go.
"I've been told there's a type of Chinese bamboo that takes four years to break the surface and then grows to 25 meters in six months. I think business here is a lot like that.
"I think that BHP's long-term commitment to Indonesia is proof of this. We now produce seven million tonnes of thermal coal per annum from three mines in Kalimantan. We have two welded mesh and rollforming plants in Pulogadung and Surabaya, with a third under construction in Medan, Sumatra. And we have an organic and metallic coating steel plant in Cilegon, West Java. This, in addition to our Information Technology, Transport, Petroleum and Power interests, is, we hope, an example of the Chinese bamboo about to surface."