Giant cigarette maker aims to inspire SMEs
Leony Aurora, The Jakarta Post, Jakarta
It was 1913 when Lim Seeng Tee got on his bike and rode through the streets of Surabaya selling the cigarettes that he and his wife had hand-rolled at their humble bamboo-walled house.
Not many people know that that humble beginning was the start for giant cigarette maker PT HM Sampoerna, which in the first nine months of this year sold 30.95 billion cigarettes worth Rp 12.52 trillion (US$1.38 billion) -- roughly equal to the Jakarta administration's entire budget for 2004.
"What small and medium enterprises (SMEs) need are good examples and inspiration to show them that they can grow into great businesses," Rusni Kartina, senior brand manager of Dji Sam Soe, the brand Seeng Tee crafted more than nine decades ago, told The Jakarta Post recently.
"They also need help in finding a market for their products," she added.
These things were what the government, as well as the private sector, should do -- more than merely giving capital -- said Rusni.
The East Java-based cigarette company is holding a national competition called the Dji Sam Soe (DSS) award to find exemplary SMEs. The model enterprises selected will be those which have good corporate governance in their management and a high sustainability prospects.
To be eligible, the SMEs are required to have assets of between Rp 250 million and Rp 1 billion -- not including land and buildings -- and a turnover of between Rp 1 billion and 5 billion per annum. They should employ more than 10 workers and have been in business for more than three years.
Sampoerna will entrust the selection process to Tempo Media and SMEs development organizations Dunamis Organization Services, Swisscontact and state-owned investment firm PT Permodalan Nasional Madani.
As for finding markets, Rusni gave examples of what Sampoerna does for several tempeh and tofu producers near its factory in Malang, East Java, as an example.
"We distribute their products via Alfa minimarkets," she said.
The government also plans to honor excellent micro entrepreneurs of 2004 by handing out an award on Nov. 18. In a bid to boost the development of the micro-enterprise sector, it has set 2005 as the international year of micro-credit.
Micro-enterprises and SMEs in Indonesia, which reached 40 million units and employ 80 million people in 2003, have proven to be highly sustainable, even amid the 1997 monetary crisis.
A survey by the office of the state minister of cooperatives and SMEs of 225,000 enterprises shows that just 4 percent had gone bankrupt.
Sixty-four percent were able to maintain profitable turnovers, while 31 percent kept their businesses despite declining sales.
SMEs played a big role in the success of large companies, said Rusni. Sampoerna is supported by 25 enterprises with more than 1,000 employees that roll the company's trademark cigarette Dji Sam Soe.
"Our cigarettes are also distributed widely through SMEs," she explained further.
The first, second and third place winners of the DSS award will get cash prizes of Rp 36 million, Rp 27 million and Rp 18 million, respectively.
Registration forms, available in several banks and website www.djisamsoe.com, can be submitted until Dec. 9.
Over 190 selected nominees will receive site visits and be interviewed by the jury. After further selections, nine top nominees will go to Jakarta to give presentations in front of prominent business figures -- Eva Riyanti Hutapea, Bob Sadino, Enny Harjanto and Charles Saerang.
The winners will be announced in the third week of January next year.
"We believe that the award will give the model SMEs wide exposure, a sense of pride and inspiration," said Rusni.