Investing in Indonesia with a Racing Spirit!
Investing in Indonesia with a Racing Spirit!
Swedish-Indonesian relations date far back in time - before independence - and have been broad and deep, in spite of the large distance between the 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 carried by the private sector and many of Sweden's large multinational companies are active in Indonesia. This trade and investment relation is not one between elites or Government representatives. This is a relation 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 relation. In an increasingly globalized world, these relations are also becoming more and more multi-faceted. 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. Other Swedish IT companies in Indonesia include IFS, a business applications supplier and Atlantis Software. Tetra Pak milk- and fruit juice containers are used all over Indonesia. Indonesian women 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 Atlas Copco mentioned. In the forestry-related sector we find the trading house Elof Hansson. 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 in 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 to share this knowledge with possible new investors and traders in Sweden.
As an example the new Swedish Ambassador to Indonesia, Lennart Linner, who arrived as late as last November, recently visited PT SKF Indonesia, the producer of ball bearings, discussing the experiences of being an investor in Indonesia with Mr 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!" Mr Saarisivu smiles. "We have 40,000 employees in 95 production units, 70 sales units and (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 bearing made in the factory in Jakarta are the Indonesian motorcycles manufacturers (Honda, Yamaha, Suzuki) and several vehicles manufactures. Unknowingly for many, millions and millions of Indonesian use SKF ball bearings every day they ride motorcycles and cars!
"Tell me something about being an investor in Indonesia", the Ambassador asks. Mr 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 leaders 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 work-force, and a very good working relation between the union and the management." Mr Saarisivu adds that also neighbor relations are important to his company, and many who live close to the factory use the mosque on the company grounds for Friday prayers.
"We have a racing spirit in the company" Mr 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 board-room. And we have a living relation with motorcycle racing. The SKF Enduro Adi Jaya Racing Team won Yamaha Cup 2001 with Ahmad Jayadi as rider. SKF Fuchs Honda Racing Team won the Indonesian championships in 2001 with rider Ahmad Jayadi. The same team won again in 2002. All these tittles have been won in the most prestigious class 116cc 2-stroke tune- up. 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 affaires and a strong role for the United Nations.
Indonesia is indeed of great importance, being the fourth most populous country in the world and having the largest Muslim population of any country. It's economy is the largest amongst the ASEAN countries and its natural resources are indeed vast. Regionally Indonesia is likely to play an increasingly prominent role in the development of an integrated ASEAN market by 2010 and the broader and more ambitious ASEAN Community by 2020. Already Indonesia is playing a leading role in promoting further co- operation on security amongst ASEAN's members. With its strategic location in Southeast Asia (through its waters pass about half of all the worlds shipping), prosperity and stability in Indonesia will affect the region as a whole. Likewise developments further ashore in Asia and globally, be they economic, political or security-related, will inevitably have an impact on Indonesia. Having gone through profound political and economic change during the last six years, and with confidence that the forthcoming presidential elections will be carried out in the same peaceful way as the general elections in April, there is now renewed hope for further economic growth in Indonesia in the years ahead. Sweden for its part, looks forward to expanding its relations with Indonesia sharing the many experiences and challenges we have in common.