Interview: To do Business in Indonesia, Local Presence and Good Relations are Necessary

Being not only the fourth most populous country in the world, but also an economically strong and politically stable country, Indonesia represents a market worth penetrating. That is also one of the reasons why ComAp, a world leading designer and manufacturer of power generation and engine control products and solutions with 10 subsidiaries all over the world, has strengthen its presence in Indonesia by appointing its fourth local distributor. What were the other reasons, what is the potential of Indonesia and what principles should be adhered to when doing business in Indonesia? Those were the questions we asked Anup Anand, Managing Director of ComAp South East Asia Pte Ltd.

What were the reasons of starting business in Indonesia?

There are several reasons. First of all, it is the largest economy in Southeast Asia and despite slowing down in recent years, its growth trajectory remains impressive. The country’s GDP per capita has steadily risen and at present, it is 10th largest economy in the world in terms of purchasing power parity. Moreover, Indonesia is also a member of a Group of Twenty (G-20).
Another key reason was the Indonesian power sector. We see a vast growth potential there, as the current rate of electrification of Indonesia is below the 80% regional average, and in fact is the lowest one in the whole Southeast Asia.
There is also high energy demand. The peak demand is projected to expand at 7, 3% per year, thus prompting the ambitious government plans to add generation capacities over the next five years.
Last but not least, there is an increasing focus on renewables. The Indonesian government pledged to strengthen the role of renewable energy sources in the near future to support the national energy security and achieve its goal of reducing greenhouse gas emissions by 29% by 2030. Speaking in figures, the energy produced from renewable sources should increase from 2.6 GW to 4.5 GW (increase by 73%).
 
What was the role of Czech Trade and how did your cooperation with this company start?
 
In Indonesia, we can do business in all of our segments, such as marine, gas and diesel power generation or bi-fuel conversion. To reach our goals, we wanted to increase our market reach by expanding our distribution network. That is why we contacted Czech Trade that not only helped us find a new distributor for gas products but also helped our existing distributor arrange meetings with customers using local language. It was effective as it helped us to arrange more than 20 meetings. Based on this, we have established similar cooperation with Czech Trade in some other Asian countries.

What are your further plans in Indonesia? And where do you see the biggest potential in Indonesia?
 
Currently we have four different distributors for different market segments, so our plan is to support the existing distribution network to increase our business and double the revenues.
I see the bigest potential in energy generation: Indonesia is the largest economy in the SEA and its population is growing rapidly – and so thus the demand for energy. As our business is related to power generation and switchboard producers, we see the key opportunities in Jakarta, Yogyakarta, Balikpapan, Surabaya and Batam areas. I hope we will be able to capture the potential of marine business, too, given the amount of ship building in the area.
 
What are the specifics of doing business in Indonesia? What would you recommend to other foreign companies?
 
A must is to find good partners or establish a local office. To do good business, you need to be present locally and to have good personal contacts and networks - business relations in Indonesia are based primarily on trust and familiarity. As strict hierarchy and top-down decision making is applied in all Indonesian organizations, always try to get to the most senior person within the company. When meeting face-to-face, do not forget to show respect and acknowledge the importance of your business partners, even more when they are older than you.
I would also recommend showing genuine interest in local culture and people and learning some basic phrases in Indonesia including how to introduce yourself. If you want to impress locals, buy a couple of quality Batik shirts.
 

 
Anup Anand is the Managing Director for ComAp South East Asia Pte Ltd. Having worked for ComAp for 5 years already, he offers a deep expertise in the fields of control and automation, power generation and power management systems. Within the ComAp SEA team he is responsible for the Southeast Asia, Japan, Korea, Sri Lanka and Maldives.
After earning a bachelor’s degree from Manipal University in India he completed the graduate studies at the National University of Singapore and earned a master’s degree (MSc.) in Electrical and Electronics engineering, majoring in Control and Automation. He also coauthored an international paper published and presented at 10th IEEE International Conference on Control and Automation held in Hangzhou, China in 2013.


This interview was done for an article published at BusinessInfo.cz, available (in Czech) here.
 
Barbora Bednaříková
Barbora Bednaříková

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