Siemens aims to be leader in energy and telecoms sectors

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.