COUNTRY PROFILE -- Sweden

COUNTRY PROFILE -- Sweden

Article for The Jakarta Post 6 June 2004

Investing in Indonesia with a racing spirit!

Swedish-Indonesian relations date back far in time -- before
Indonesian independence -- and have been broad and deep, in spite
of the large distance between our two countries.

Diplomatic relations were established in 1950, Sweden being
one of the first countries to recognize the newly independent
Republic of Indonesia in late 1949.

The backbone of Sweden's relations with Indonesia, however, is
the private sector, with many of Sweden's large multinational
companies active in Indonesia. This trade and investment
relationship is not one between elites or government
representatives. This is a relationship that is carried by
Indonesian workers in factories in Indonesia, and by Swedish and
Indonesian consumers. Trade and investment is an international
people-to-people relationship.

In an increasingly globalize world, these relationships are
also becoming more and more multifaceted. A Swedish product could
be produced in an ASEAN country or somewhere in Europe outside of
Sweden. A Swedish company could be owned by others than Swedes,
but have its headquarters in Sweden -- or the other way around.

Some Swedish company brand names are quite familiar to
Indonesians, others perhaps less so. Everyone recognizes a Sony
Ericsson cellular phone, but how many know that the telephone
system that they are talking through builds on Ericsson
equipment? Today, Ericsson has the edge in the technology shift
from analog to digital mobile telephony, leading the way to
third-generation mobile communications.

Tetra Pak milk and fruit juice containers are used all over
Indonesia. Indonesian women (and also an increasing number of
men) will no doubt associate quality cosmetics with Oriflame,
sold all over Indonesia.

The yellow Swedish Match matchboxes are recognized by millions
of Indonesians, as are Lux and Electrolux home appliances.
Hundreds of thousands of Swedes have Indonesian products from the
furniture chain IKEA in their homes or wear Hennes & Mauritz
Indonesian-made clothes. Anyone in mining will think of
reliability and high-tech when hearing the name Atlas Copco
mentioned. Swedish consumers are enjoying excellent Indonesian
pineapple and Indonesian drivers feel safe in Volvo and Scania
cars, trucks and buses.

Encouraging trade and investment in both directions is a
centerpiece of the activities of the Swedish Embassy in
Indonesia. The ambassador and his staff often visit Swedish-
related companies in Indonesia to learn more about the
practicalities of doing business here, and then share this
knowledge with possible new investors and traders in Sweden.

As an example, the new Swedish ambassador to Indonesia,
Lennart Linnir, who arrived last November, recently visited PT
SKF Indonesia, the producer of ball bearings, discussing the
experiences of being an investor in Indonesia with Ilpo
Saarisivu, the managing director of the company here. The
ambassador also saw the production line and talked to staff at
the company.

SKF was established in Sweden in 1907 -- "three years to go to
the company's centennial!" Saarisivu says with a smile. "We have
40,000 employees in 95 production units, 70 sales units and a
(commercial) presence in practically all countries of the world."

SKF has been present in Indonesia since colonial times and
started production under its own management and ownership (PT SKF
Indonesia) in 1997. Today, there are 400 employees, nearly all of
them Indonesian. The buyers of the quality ball bearings made in
the factory in Jakarta are Indonesian motorcycle manufacturers
(Honda, Yamaha, Suzuki) and vehicle manufactures. Unknown to
many, millions and millions of Indonesians use SKF ball bearings
every day they ride on motorcycles or in cars!

"Tell me something about being an investor in Indonesia," the
Ambassador says.

Saarisivu answers with yet another broad smile. "Indonesia has
been a very encouraging experience for us. Through all the
difficulties in this country during the past few years we have
been able to grow, and we are by far the leader in delivering
ball bearings to the automotive industry here."

Some people have said that it is difficult to find competent
staff in Indonesia, but that is not the SKF experience. "We have
a loyal and very competent workforce and a very good working
relationship between the union and the management," Saarisivu
says, adding that good relations with nearby residents are also
important to the company, and many residents who live close to
the factory use the mosque on the company's grounds for Friday
prayers.

"We have a racing spirit in the company," Saarisivu says. "We
see it as a goal to be better and better all the time, so a race
for quality is crucial and we all participate in it, from the
production floor to the boardroom. And we have a living relation
with motorcycle racing."

The SKF Enduro Adi Jaya Racing Team won the Yamaha Cup 2001
with Ahmad Jayadi as the rider. The SKF Fuchs Honda Racing Team
was Indonesian champions in 2001 with rider Ahmad Jayadi. The
same team won again in 2002. All these titles have been won in
the prestigious 116cc 2-stroke tune-up class. The 2003 racing
season ended with a win in the National Championships, this time
with a Honda bike and rider Poppy Rafid.

Although business relations might dominate, the relations
between Sweden and Indonesia cover everything from research and
sports to culture and tourism. Before the devastating terrorist
attacks in Bali in October 2002, nearly 20,000 Swedish tourists
visited Indonesia every year. Since then that figure has dropped
but is again on the rise. Nowadays there is also a lively
cultural exchange in such areas as art, film, music, food and
design, and not least important -- a growing student exchange.

Equally crucial, Sweden and Indonesia share views on many
important international issues, including the need for a
multilateral approach to many of today's most intractable
problems in international affairs and a strong role for the
United Nations.

To Sweden, Indonesia is indeed of great importance, having the
world's fourth largest population and the largest Muslim
population of any country. It is also of importance because
Indonesia, with its strategic location, is a major political
actor, not only in Southeast Asia but in Asia as a whole.

Sweden firmly believes that there is great potential to expand
the bilateral relations between the two countries in many
different fields, and Sweden is certainly prepared to do its part
in realizing this vision.