Small companies survive crisis the best

Small companies survive crisis the best

The business sector has long been feeling the pinch of the
economic crisis, with many companies going bankrupt or slowing
down their pace. But there are some survivors which are able to
maintain their performance or even step up a gear. The Jakarta
Post reporters Edith Hartanto, Budiman Moerdijat, Devi Asmarani,
Kosasih Daradjat, Dwi Atmanta and correspondent M. Ahyani
compiled the following report. Pictures by Oka Budi Yogaswara.

JAKARTA (JP): Small is beautiful and modesty shows the way to
survival in this unpredictable spell of economic adversity
paralyzing most business fronts across the country.

While business heavyweights are counting their losses accrued
from their lust for multibillion dollar investments, some midsize
and small businesses, which virtually stayed out of the public
spotlight during the boom of the past few decades, are coming
into their own.

And when the once-superfluous conglomerates are handing the
government a severe headache with their apparently unpaid
external debts and massive layoffs, small and medium companies
are stepping in to ease the pain.

Atih Surjati Herman, head of the small industry development
agency at the Ministry of Trade and Industry, says that small and
midsize firms are the most likely firms to survive the crisis.

"Some of them are benefiting from their rising export volumes
because of their competitive prices. There are also companies
which are enjoying export hikes but, although managing to
survive, are weak when it comes to price-bargaining power," she
says.

With the rupiah weakening against the U.S. dollar, products
with a high imported content have been largely blamed for killing
many business sectors.

Atih singles out, among other things, food, handicraft and
furniture producers for their use of local materials, and
suggests that other businesspeople follow suit.

Such a call, however, underlines the irony of the country's
successful development story over the past 30 years for
agricultural expert Bungaran Saragih.

He criticizes the government for encouraging industrialization
which failed to exploit agricultural resources, despite the fact
that most of the country's population makes its living from their
land.

"How come that a country which is blessed with fertile soil
like Indonesia has to import food?" asks Saragih, a professor at
the Bogor Institute of Agriculture.

Another scientist, Thobby Mutis of the Jakarta-based Trisakti
University echoes Saragih's criticism, saying that instead of
stressing land cultivation policies, the government has spent too
much time on controversial policies such as the national car
program, high-tech industries and clove and orange trade
regulations.

Export-oriented

Irwan Suryanto of Majalengka, West Java, turns a deaf ear to
the controversy surrounding state development planning. He finds
nothing remarkable in the government's recent "I love Indonesian
products" drive because he has been advocating it for years.

The 48 year old finds himself on the right track after seeing
his leather soccer-ball industry escape the steamrolling monetary
turmoil.

A junior high school graduate, Irwan bounced back from a Rp
200 million loss in 1994 with the brilliantly picked new
orientation of targeting overseas markets.

Employing some 800 local handcrafters, who mostly work from
their respective homes, Irwan's company produces 30,000 balls a
month. Some of the balls will be used in the World Cup that
starts in June in France.

World soccer body FIFA estimates the global demand for soccer
balls at 150,000 per day, compared to the domestic demand of
75,000 per month.

Such a huge market is the major reason why Irwan insists on
sticking to his old business, rather than expanding it to making
other sports equipment.

With a relatively cheaper price, thanks to the rupiah's
depreciation against the U.S. dollar, Irwan's balls are in high
demand in China, Russia, the United States, Middle East, Latin
America and Europe.

Sukyatno Nugroho, owner of the Es Teler 77 restaurant chain,
is another rare success tale who, like Irwan, doesn't want to
hear empty talk about how the business sector is struggling with
the worst crisis in decades.

"No economic theories can solve this crisis. I'm just an
ordinary person. I'm just treading my own way to save the 3,000
people working for me," he says.

Despite the slowdown, the 50-year-old businessman is spreading
his wings to Brunei and Singapore.

But it took Sukyatno, a native of Pekalongan, Central Java,
almost two decades to reach such a height. Starting his business
on the street, he made use of what can be considered a
conservative approach to build up his own kingdom. He currently
controls 234 outlets, 21 of which were opened during the monetary
crisis.

"I form strong partnerships with small businesspeople who do
not rely on bank credits. This is one of the keys to our
success," he says.

He adds he avoids opening outlets in high-class buildings, not
only because of fears about expensive rents but due to his
decision to target the middle class.

"My conservative style drew laughter from my friends, but now
it's proven to be right," he recalls.

"I enjoy doing everything myself, including buying materials
in markets or cleaning tables. I prefer becoming number one
person in my own company to a tycoon rated below 100
(nationally)," he says.

Suprapti Wahyuni, who runs a garment and handicraft company in
Bekasi, West Java, has seen her company survive the crisis,
although she says it is earning less than it should be.

Her firm, PT Wahyu Purnomosari, has raised the output of its
ladies garments from 2,000 dozen a month to 2,500 but only after
she offered a 25 percent discount to her traditional buyers from
the United States, the United Arab Emirates and several other
Asian countries.

"The dollar we receive is smaller because its exchange rate
multiplies by three to four times compared to the rupiah, while
production costs such as labor wages and engine expenses remain
high," she says.

With nobody knowing when the crisis will end, Saragih asserts
that opportunities for businesspeople to regain ground remain
wide open if they turn to agroindustry.

"We are actually watching an agribusiness boom, with a tomato
selling at Rp 500," he says. (team)