Sukyatno, the man behind Es Teler

By Edith Hartanto

JAKARTA (JP): Es teler is a household name in cities across the archipelago for its unique combination of coconut, avocado, jackfruit, syrup, milk and ice. But few locals are familiar with Sukyatno Nugroho, the man who brings it from the street to elegant shopping malls.

From humble beginnings in Pekalongan, Central Java, where he was born, the 50-year-old businessman now owns the Es Teler 77 Group, as well as Mie Tek-Tek and Pasti Enak restaurants.

He manages 234 outlets -- 21 of which have opened since the monetary crisis began -- in 22 provinces.

"I will continue to open more outlets in the months and years to come," he said.

With his wife, Yenny Setia Widjaja, 46, he has spent about 16 years establishing the Es Teler 77 Group's empire and received various awards -- including the Satya Lencana Pembangunan from President Soeharto in 1995 and ASEAN Best Executive 1995/1996 from the ASEAN Program Consultant -- in the process.

And he is set to open Es Teler 77 outlets in Brunei and Singapore, deals which are currently being negotiated.

Sukyatno is seemingly unfazed by the current money crisis as The Jakarta Post discovered last week after sharing an es teler with Sukyatno at his outlet in Mal Citraland.

Below is an excerpt from the interview.

Question: How did you start your business?

Answer: I started all of these with a small kiosk near Jl. Gajah Mada, Central Jakarta, back in 1982, with a capital of Rp 1 million and five employees.

Every day I went to the market. I worked under the blazing sun and got soaking wet when it rained and braved the floods. In the beginning, I opened my outlets on sidewalks in front of buildings or houses, and I was kicked out like an animal by the building owners. But I used that experience to move forward. It gave me inspiration to go on and be a tough and successful businessman.

In 1987 we started to open outlets using the franchise system and in 1994 we decided to open in shopping malls. We cater to people of all walks of life from low, middle and upper classes.

Q: What measures are you taking to survive and even manage to keep your smile in this time of crisis?

A: Well, I've been involved in this business for 16 years now. I have always believed that Indonesian products are the best choice for creating good business. So I chose a product that was essential for all people: food.

Of course, Indonesian food is loved by Indonesia's 200 million residents. The second important thing is that I have a strong and true partnership with all of my franchisees. I only have two hands and two feet. I could not do all of these things by myself.

The third factor, and the most crucial, is that all of my partners are small businesspeople with a capital of between Rp 100 and Rp 200 million so they don't suffer from high bank interest and we're not affected by the bane of collusion or corruption. The point is to create a strong partnership without evicting small-scale businesses.

Q: What makes Es Teler 77 and your two other restaurants -- Mie Tek-Tek and Pasti Enak -- different from other restaurants?

A: We're selling Indonesian food with a special taste ... don't forget that what we developed here is actually a sidewalk food that is being eaten by millions of Indonesians every day.

Mie tek-tek or es teler, for instance, are a daily staple that we can find anywhere on the streets. It will never stop having customers.

In the beginning of the economic crisis last year we gave a discount to attract buyers... after that, people kept coming... and I stopped the discount program. Ha ha.

Many of my colleagues asked me how could I survive with so many outlets open in malls while many other restaurants closed down due to a lack of customers and the high lease rates. I tell you this... in the malls we only rent small spaces. So we don't have to pay expensive rent. We designed it to be as simple as possible. All of our outlets are very neat. The chairs, the tables, are all designed to be as efficient as possible.

It is so efficient that if one of our customers says "I love you", the customer at the next table could hear it. Ha ha.

Yes, we designed the outlets to become fast food and fast- eating restaurants... so the flow of customers could proceed smoothly, and this means more income to gain.

Q: How many brand names and outlets have you created?

A: Currently we have three brand names. The first, established in 1982, is Es Teler 77 which serves es teler, noodles and dumplings as the main items on the menu.

We currently have 199 Es Teler 77 outlets in 22 provinces in Indonesia. The second, Mie Tek-Tek, was established only a year and a half ago, and now there are already 31 outlets in the country. It serves mie tek-tek and fried rice as the main items. Last, but not least, Pasti Enak, which opened only six months ago, now has four outlets. It specializes in seafood, barbecued chicken, kredok (traditional salad) and sayur asem (traditional sweet and sour soup).

During the economic crisis alone, since last August, we've opened 21 outlets in many places including Batam, Padang, Bengkulu, Bandung, Semarang and Pekan Baru. Once, we could open three outlets in one day in different provinces.

All I think about now is how I can manage to keep all of the 3,000 employees and help many others who lost their jobs during the economic turmoil.

Currently we're negotiating the opening of our first outlets overseas, which will be in Brunei and Singapore.

Q: How do you deal with competition, especially the mushrooming number of foreign franchise restaurants?

A: As you know here we're developing an Indonesian food businesses. We sell the food at reasonable prices for everyone. If people could buy es teler at sidewalk kiosks for Rp 1,000 to Rp 2,000... we sell it for Rp 3,500 in most of our outlets in shopping malls. Mie tek-tek's street price is about Rp 1,000 to Rp 3,000... we sell it for between Rp 4,000 to Rp 5,000.

I think that is our advantage compared to local franchisees for other foreign franchises here. Currently, the price at several restaurants such as McDonald's, Kentucky and Wendy's, have sharply increased from about Rp 2,000 up to Rp 5,000... their packet prices have also jumped by more than 100 percent. Moreover, they have to pay the franchise fees in dollars. The franchise fees for Es Teler 77, Mie Tek-Tek and Pasti Enak are paid in rupiah.

Q: What do you think about the crisis?

A: Well, I feel so lucky because most of my friends could not make it through this troubled time. Facing this tough time, all I can think about is how to survive, how to cope with the crisis. I can't wait for the analysts to predict and plan on how to surpass this crisis. I tell you this, there are no economic theories that can work in such a turbulent time. To survive we have to use the 'drunken master theory', that is we have to adapt and make the best of the situation.

I'm tired of listening to economic plans, CBS (Currency Board System)... all of which I cannot understand. The most important thing for me is to keep my business alive and keep jobs for thousands of workers, from fruit farmers to suppliers, and we're contributing a lot to the region's tax revenues. I think people need fast economic recovery and this kind of business matches people's needs. People need a better economic condition, they are tired of promises.

There are people who used to laugh at my business. They called me conservative, old fashioned but in this time of crisis, everything turns upside down. And finally, a local product like this is the one which eventually survives and even grows stronger and stronger all the time.

Q: Have any of the outlets closed down because of bankruptcy?

A: Of course. Along the way there were one or two of our outlets that were closed down, such as the one in Jembatan Lima, West Jakarta. The usual reason was because we had to compete with sidewalk vendors who offered cheaper prices. We could have lowered our price but I don't have the heart to do that because it's the same as killing small business. We are better off moving somewhere else.

Q: What are your other goals and dreams?

A: If I could, I would open my franchise on the moon but currently I really want to be awarded a doctoral decree... sounds crazy, doesn't it? I didn't even finish junior high school. But there are tycoons who did not finish elementary school but they can get honorary doctoral decrees. I've been giving lectures all over the country.

It's just a simple dream, though...

Q: What if people get bored with, for instance, Es Teler 77 outlets?

A: There were times that economic analysts feared that these kinds of franchises would collapse but now, after 16 years, it turns out that we're grow stronger and bigger. So I don't worry about that.