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)