Siemens aims to be leader in energy and telecoms sectors
Germany's engineering giant Siemens AG entered Indonesia 10 years after the firm came into being in Berlin in October 1947. Now after almost 50 years of operation in Indonesia, the firm is among the few multinational companies that have a strong and wide business network in the country. It now delivers products and services to six industrial sectors, that is: information and communications, power, automation and control, health care, transportation and lighting. PT Siemens Indonesia's CEO Juergen D. Lagleder recently talked with The Jakarta Post's reporter Dewi Santoso about the firm's business outlook.
Question: With so many divisions, which one will be the focus in the future, and why?
Answer: Energy, because I think Indonesia needs to have more power plants and distribution systems. The market is growing by 8 percent annually, and some areas in Kalimantan and Sumatra already have black-outs sometimes, so that means one has to do something. I hope Siemens will contribute to the improvement of the energy sector here in the country.
Q: How much are you planning to invest for this division? A: That depends what our customer, in this case PLN, is planning. But we put around five to 10 million euros per annum, and maybe even more as I know that there's a huge amount to be spent in the field of energy in the next six years. And we hope we'll be one of the suppliers.
Q: Could you name some of your projects in the energy sector? A: At the moment we have one construction, a new gas-turbine power plant, called Muara Tawar, which will be completed next month. It has a capacity of 6 x 143 megawatts (MW) with an investment of US$250 million. And we've built a coal-fired power plant, called Paiton 2, with our joint venture company PT Jawa Power. Siemens owns a 50 percent share. It has the capacity of 2 x 610 MW. Now it's running fine, and is contributing to the Java- Bali grid.
Q: How does Indonesia fare compare to other countries? A: This is a question that I cannot easily answer because we have many specializations and each depends on the market of a country. But I'd say in general, here in Asia, I think it's in the top three after China and India.
Q: Talking about your business at present in Indonesia, what is now the most profitable market A: Fifty percent of our business comes from telecommunications as we are strong in telecommunications. By that I mean fixed-line -- the infrastructure of switching centers for the normal fixed-line telephone system -- and nowadays, of course, the infrastructure for the mobile networks, the switching centers, the base stations, the radio equipment.
Q: What were your sales last year as compared to the year before? And what is your sales projection for this year? A: Last year, Siemens' total sales in Indonesia increased by 80 percent to 691 million euros, from 384 million euros in 2002. This year, we expect sales to grow by 7 percent to 10 percent overall.
Q: I understand that Siemens has many factories here. Could you name them? Q: We have five factories: a power generation factory that produces the nation's electricity in Cilegon; a power transmission and distribution factory that produces switchgears and circuit-breakers in Pulo Mas, Jakarta; Osram factory that produces all sort of bulbs in Tangerang; Indo VDO factory, a joint venture with Indomobil, that produce instruments for motorcycle electronic components in Tambun, East Bekasi; and Siemens Hearing Instrument factory that produces hearing aids in Batam. The factory in Cilegon was built 50 years ago and the factory in Pulo Mas is our oldest establishment here.
Q: How do you develop your human resources? A: We have a total of 3,700 employees in the country. We conduct a lot of trainings, which are necessary for our staff. In 1997 we built a vocational training center in Cilegon, where we train technicians in the field of electronics, telecommunications, welding and mechanics, for a three-year course, mostly practical work. We also have management training, sending managers to different companies throughout the globe.
Q: Do you see Siemens as the market leader in the future? A: We're the market leader in telecommunications, although we're number one in handsets after Nokia. But there's strong competition out there, and it's getting tougher. We just hope that we'll be one of the leading supplier in power and telecommunications.
Q: Do you see a good investment climate here? A: Yes. Since we're so many years here, we see a good future in Indonesia. We don't mind which political system plays, we just want to do business, and have good relationships with our customers.