RI market offers Australia new opportunities

RI market offers Australia new opportunities

Bilateral trade with Indonesia grew by 30 percent last
financial year to a total figure in excess of A$5 billion. It is
now Australia's 10th largest trading partner and will soon be its
biggest partner in the region. Austrade has been actively
promoting Australian business interests through its offices in
Jakarta, Surabaya and a new office in Medan. Despite the rupiah
depreciation, a property downturn, and an IMF loan bailout, many
prominent Australian companies still believe strongly in the
future of the Indonesian market.

Austrade's move into regional Indonesia took a further
significant step forward with the opening of the new Medan, North
Sumatra, office on Dec. 17 under the skilled management of
Wagiman Tandun. Sumatra, located on the Strait of Malacca and
part of the Indonesia/Malaysia/Thailand Growth Triangle, offers a
range of untapped business opportunities for Australian companies
in a resource-rich region of strong economic growth.

The Medan office will operate in cooperation with The
Australia Center and the Asean Focus Group Pty Ltd. The Australia
Center is an educational foundation which receives technical
assistance from Insearch Language Center at the University of
Technology, Sydney.

The Australia Center provides language training and
educational services for the local community, as well as
Australian educational institutions. It has the premier
Australian profile in Medan. Asean Focus Group Pty Limited also
has well-established links in Indonesia and will add considerable
value to the Medan operation.

The move into Medan is part of a process aimed at projecting
Australian business into regional Indonesia. No one denies the
importance of Jakarta as the business capital, but there are,
nonetheless, opportunities in the provinces which we sometimes
miss as a result of being perhaps a little too Jakarta centric.

According to Senior Trade Commissioner in Indonesia Bruce
Wallace: "This trend indicates the increasing sophistication of
Australian firms in the Indonesian marketplace. They realize that
while Jakarta is the preeminent business center, there are still
strong opportunities elsewhere. We can offer practical support to
firms entering new areas through our office expansions."

The move into the provinces began with the opening of the
Surabaya operation in 1992. Surabaya has long been recognized as
a successful initiative. Companies in the health sector, the
sugar industry, in marine, building materials, mining,
agribusiness, food and many other sectors recognize the
contribution the Surabaya office has made in tapping them into
opportunities in Surabaya, East Java, and beyond.

Budi Daroe, who manages the Surabaya operation, said:
"Surabaya's growing role as a purchasing center for major mining
operations in eastern Indonesia will be enhanced in 1998, so this
should add a new facet to our relevance to Australian business.
It fits in very well with our ongoing effort to open new horizons
for Australia here."

The relaunch of Surabaya in new premises in November 1996 by
the managing director, Charles Jamieson, was timely, enabling the
profile of an efficient and effective office to be raised among
both clients and customers and further underlining the relevance
of regional Indonesia to a deepening commercial relationship.

A 50 percent increase in both the number of new clients and
customers contacting Austrade Surabaya has been witnessed over
the past year. There is also a growing Australian corporate
presence in East Java.

There were only seven Australian investors present in East
Java in 1992. This has now risen to 19. New faces include Mayne
Nickless/HCOA, BHP and Boral. In addition, representative and
branch offices have increased from nine to 35 over the same
period. New faces include Aquatec Maxcon (environment), KMP (ISO
9000) and Procon Indah (property).

A prime example is the new Mayne Nickless/HCOA hospital -- RS
Internasional Surabaya -- which began construction in 1996 and is
scheduled to be launch in mid-1998. It is a major step forward
for the Australian health sector in Indonesia, where Australian
expertise and geographical proximity fit very comfortably with
Indonesian demand and needs over the long-term. The Surabaya
opportunity was HCOA's first in Indonesia. It now operates one
and is building two other hospitals here.

EGM Southeast Asia Roger Bayliss and Bruce Wallace wanted to
extend the principle to Sumatra in 1997.

"The aim is to project Australian business into an area where
bilateral business links are strangely not perceived to be as
strong as elsewhere in Indonesia. The Medan launch was warmly
welcomed by both the public and private sectors in Sumatra and
received extensive press coverage, both locally and nationally.
People expressed surprise we had not been in Medan long ago,"
said Wallace.

North Sumatra Deputy Provincial Governor Pieter Sibarani, in
opening the Medan office, acknowledged Australia's foresight in
making the move at a time of considerable economic downturn in
Indonesia. He said he regarded Australia as a major and natural
regional partner and was delighted it had decided to move in.
Local businesses agreed with him.

The community turned out in full force at the opening
reception to welcome the new office. Local business
representatives from Jakarta included Sabam Siagian, a former
Indonesian ambassador to Australia and currently chairman of the
Australia-Indonesia Business Council. He is keen to see the
council establish a branch in Medan in the near future. Wagiman
Tandun will be right behind this council initiative.

"The launch has already raised Australia's profile
considerably in Sumatra. Australia is well-established as a
destination for study and tourism. Now, we need to convince the
business community that we are also ready and able to do business
with here," said Wagiman. Wagiman's strong background and
extensive network in local business will no doubt assist in this
process.

Bayliss made the point many times to numerous interlocutors
during his December launch visit to Medan that the office, like
Surabaya, gives the business community access to the whole range
of services available through Austrade.

Talks centered mainly on workflows and their advantages in
allowing customers to identify sources of supply in Australia
quickly and efficiently. Bayliss emphasized the high degree of
integration which exists among the three office in Austrade's
Indonesia operation and underlined the growing ability to support
the needs of specialist posts and to ensure that resources are
there to back them whenever required.

And after Medan? The next obvious arena is eastern Indonesia.
The commitment of both governments to the development of the
Australia Indonesia Development Area (AIDA) means that as the
concept moves forward, there will undoubtedly be new business
opportunities. The offices will need to be responsive and to
adapt the models developed in the other regions to ensure they
are best placed to assist Australian business to take advantage
of them.