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Challenges in Technology – and Capital – Intensive Industries

JAKARTA JIVE
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Challenges in Technology – and Capital – Intensive Industries

TOWARD the end of 2006, Indonesia’s fast-growing cellular telecommunications sector introduced third generation (3G) technology. The new technology, which enables video calls, was launched by three operators, including PT Excelcomindo Pratama Tbk.

“The 3G service is a new experience for users of XL telecommunications services, for business as well as recreational and educational purposes,” said XL president director Hasnul Suhaimi.

For the company, which commemorated its 10th anniversary in 2006, it was a gift to users in general and its clients in particular. Hasnul said the launch of the new service demonstrated XL’s commitment to give the best service to its clients as the first provider of 3G services, with the widest scope and options of services, as well as the speediest data access supported by 3.5 G technology, the HSDPA (High Speed Downlink Packet Access).

XL is not the only operator to offer 3G services, but what makes it different from the others is that it offers special facilities. Users do not have to re-register. They are also provided with the facility to access the contents of a single media, the XL 3D web portal. In all, XL cooperates with 25 content providers, music labels and TV stations, both local and international. As if to illustrate its optimism about the bright future of this new telecommunication technology, XL has invested US$50-100 million in 3G services.

With such a substantial investment, XL has indeed taken a bold step. There is a reason behind this move — Hasnul has an ambition to make the company he directs the most reliable provider of information and communications technology in Indonesia, both for individual and business users.

“XL will remain committed to the four strategic pillars it has laid,” explained the man who was born in Bukittinggi, West Sumatra, on April 23, 1957 and elected the new XL president director during its annual general meeting at the Ritz-Carlton Hotel in Jakarta on Sept. 1, 2006.

The four XL strategic pillars Hasnul referred to include expansion of coverage, capacities and development of products; expansion of the corporate market; use of new technologies; and optimization of XL synergy with the Telekom Malaysia Group.

XL, which began operations in Indonesia on Oct. 8, 1996, is no longer a national company, since in 2005 it became a subsidiary of Telekom Malaysia, one of the biggest telecommunications companies in Asia. The Malaysian company is now a major share holder of XL, controlling 59.7 percent of the company.

Today XL business includes Consumer Solutions, a provider of dual-band cellular networking of prepaid Jempol and Bebas cards and post-paid Xplor cards, and Business Solutions, a provider of leased-lined corporate solution services, broad band and IP (Internet Protocol).

However, the task is by no means light for Hasnul to bring XL forward as the selected provider of information and communications technology services in Indonesia given that XL is still below the two other operators in terms of income.

But it is lucky that this graduate of the Electrical Engineering Department of the Bandung Institute of Technology and holder of an MBA from the University of Hawaii in Manoa, the U.S., is not a new face in the cellular telecommunications business. His career in telecommunication technology includes more than 23 years with Indosat, with his last position being president director of the company before he quit and moved to XL as its number one executive.

Hasnul humbly said he did not know exactly why he was chosen to be president director of XL, but he felt that he had given all his energy and resources to Indosat. “Meanwhile, there are still many things that can be explored and worked out at XL,” the father of two said.

When asked to compare the two giant companies, Hasnul said that both were good firms that could be called world-class companies. “It is the cultures that make them different. The leadership style at Indosat is more toward consensus, whereas decisions are made quicker at XL. Each style has its own weaknesses and advantages, but both are fun,” said the former director of development of the Indonesia Marketing Association (IMA).

It was the same fun that he felt when he plunged into and penetrated the 3G services. But since 3G technology is still in its infancy, XL — along with the other telecommunication technology providers, of course — has to constantly educate the public about it. For example, a series of promotional programs have been held at shopping centers and on campuses in several cities. In addition, XL has installed XL3G stands at nine XL centers which serve to electronically provide varied information about 3G and XL3G and even free XL3G services.

The work is not at all easy, just as it was not in advanced countries (Japan, U.S. and European countries) when they were marketing 3G services. Today, some 120,000 XL users use 3G, a success considering the amount of time set for the campaigns. But there is still a long way to go when compared against the nine million (cellular phone) XL users.

But Hasnul believes that it is just a matter of time before 3G proves to be popular, just as in the early days of cellular phones, which are now very common. Nationwide, the number of cellular phones in 2005 was registered at 47 million, or some 20 percent of Indonesia’s total population. And estimates by ABN Amro, IDC, Pyramid Research, Business Monitoring International Ltd., IMF and internal analyses indicate that the figure will increase to 63 million in 2006, 77 million in 2007, 89 million in 2008 and 122 million in 2011.

With wider use, growth is declining in percentage, 46 percent in 2005 and only 34 percent in 2006. And next, from 2007 to 2011, growth is estimated at 22 percent, 19 percent, 13 percent, 9 percent and 8 percent respectively. “We don’t have lofty ambitions. We only target growth above the average industries,” said Hasnul.

His expectations are not without basis because XL is not lagging behind in technological terms. Also in terms of capital and investment, which are crucial for such a capital-intensive company, XL is strong as it is a subsidiary of Telekom Malaysia Berhard (TM), a group of prominent regional information and communications companies, which has recorded operational returns of more than 13 billion Malaysian ringgit. Today, with investments and operations in 12 countries in Asia and worldwide, TM is focusing on sustainable growth in local and international markets.

For the past two years, XL has seen encouraging growth. During the first half of 2006, XL showed fast growth, recording gross income of Rp 1.7 trillion, an increase of more than 50 percent from the first half of 2005’s Rp 703 billion. Meanwhile, the net gain of XL for the first half of this year was Rp 358 billion, an astounding growth compared to the first half of 2005, when XL recorded a loss of Rp 53 billion. XL also booked 41 percent growth of pre-interest, depreciation and income, from Rp 854 billion in 2005 to Rp 1.2 trillion in 2006.

XL’s main challenge, Hasnul said, is the ever-keener competition among operators, old and new alike. In addition, the needs of the people for telecommunications solutions and services have become more varied and dynamic.

Apart from that, fast developments in telecommunications technologies is also a challenge for XL to always learn and implement any new technology in providing the best telecommunications solutions. “I believe XL will meet this challenge because we have a very reliable team, strong synergy with the Telekom Malaysia Group and adequate technological capability,” said Hasnul, who was awarded the prestigious Satyalencana Wira Karya Medal (2003) and Satyalencana Pembangunan Medal (2004) by the government. (Burhan Abe)

The Jakarta Post, January 10, 2007

Herman Moeliana: Gaining Success through Thinking Simple

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Herman Moeliana: Gaining Success through Thinking Simple

“I learned about it from friends and newspapers,” said Herman Moeliana, CEO of United Chemicals, in response to the news of his nomination as a finalist for the Ernst & Young Entrepreneur 2006 award some time ago. Herman said he could not believe it. “I was being compared with prominent entrepreneurs. Who was I?” he said in a strong West Javanese accent.

Indeed, some of the 12 finalists were familiar figures in Indonesia’s business world, including Helmy Yahya (CEO of Triwarsana – a production house that produces many top rating television programs), Hary Tanoesoedibjo (CEO of RCT Ithe oldest and leading private television station) and Subiakto Priosoedarsono (CEO of Hotlinean advertising company known for its eccentric ideas).

That measured reaction reflects the character of the gentleman who was born in Bandung on Oct. 19, 1944. Herman always keeps a low profile. In fact, the company he founded with four employees in a small room in 1983, PT United Chemicals Inter Aneka (UCIA), has grown into a big company with more than 600 employees and now occupies space in multi-story buildings in Central Jakarta and Tangerang, Banten.

Nevertheless, all of this has not prompted Herman to lead a lavish life.is the use of buying many luxury cars? One luxury car is enough. They all feel the same,” he argued.

“If you drove a luxury car to a busy, congested area like Glodok (Jakarta’s downtown), you’d worry. I’d rather buy another car of medium price. That way, the gap between the rich and the poor is less pronounced,” he said.

Probably the humble character of this father of two and grandfather of one is rooted in the fact that he built his business from scratch. After graduating from the Chemical Engineering Department of the Bandung Institute of Technology in 1971, Herman began working at a British company in Jakarta.

Over the next several years he changed jobs a few times. But one thing is clear: he remains committed to working in the chemical industry because it is compatible with the subjects he learned at the institute.

Entrepreneurship remained a goal ever since he started his first job, and finally in 1976, together with some friends, he started buying shares (albeit in small numbers) in a company named PT Linsea Inc. Over time, Linsea developed and gained success. But Herman and his friends felt that they had deviated from their initial mission with Linsea. Finally, after they failed to reach a deal, Herman and like-minded colleagues quit Linsea and set up their own company, PT United Chemicals Inter Aneka (UCIA) in 1983.

And fate favored Herman. Many of his long-term customers and suppliers remained loyal to him. Old friends were also supportive even though Herman and his colleagues were flying a new flag. This made it easier for UCIA to get started, so much so that UCIA was practically at the “harvesting” phase of business.

That is not to say that Herman did not have to work hard. On the contrary, he had to go everywhere by motorcycle, including to factories located in the suburbs, since there were only a few employees. “That is why I have coarse palms because I did not wear gloves,” he recalled.

His perseverance and hard work were not in vain. Many of his customers were satisfied and gradually their numbers increased. The key to success, he said, is to provide personalized service. This service, he added, is crucial because the goods he sells are raw materials that anybody can sell.makes us different is the way we approach our customers,” said the man who likes playing golf. “If customers are happy with the way we serve them, they will not turn to other sellers, even if they sell at lower prices than us.”

With his humbleness, it is little wonder that customers eventually became loyal clients. During a transaction, a customer buys not just goods, but also the personality of the seller. Here Her-man succeeds in his personality.

Moreover, the goods and products he sells are not finished products, therefore, the personal touch is important. If their goods are finished products, the role of promotional campaigns and other marketing tools will determine the commercial success or failure of the products.

In fact Herman does sell finished products as well. One such product is an anti-leak material called Aquaproof. “Selling a finished product is more difficult,” Herman admitted.

He often learns from his staff how to sell finished products.not embarrassed to learn from my subordinates. After all, they have developed special skills for that,” he said, giving an explanation of why he has staff to market Aquaproof.

From such an experience Herman underlined that in marketing finished products, the marketing force is the most crucial element. “A good marketer is one who can sell goods of average quality. On the contrary, a good quality product will not sell if the marketing forces are not skillful,” he explained. But he immediately added that he would not justify just any means to sell a product.

According to Herman, ethics and credibility must be maintained in marketing products. The result? Not long after UCIA was founded, Herman in 1985 set up two other companies, PT Inter Aneka Lestari Kimia (IALK) which produces Aquaproof, and PT Adi Cakra Utama Mulia (ACUM) which distributes it. Aquaproof got a 1994 version of an ISO 9001 certificate in 2000 and a 2000 version in 2004. Aquaproof also became a generic name for similar new products since it was the first product of its kind on the market.

All these successes, Herman argued, are attributed to the hard work and perseverance of himself and his friends and their ability to identify opportunities. However, Herman also admitted that customer loyalty also played a part in the successes he has achieved.

And although Herman did not earn the top award in the Ernst & Young Entrepreneur of the Year 2006, he feels grateful that he was nominated as one of the 12 finalists.

For Herman, who will continue to work for as long as his body and mind allows, that is not the mission in building his business. His mission, Herman said, is simple. “I only want the companies I set up to be useful to me, my family and my employees for a very long time. That’s all!”

(Arif T. Syam)  

The Jakarta Post, January 03, 2007  

Tony Chen: Support RI in Narrowing Digital Gap

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Tony Chen: Support RI in Narrowing Digital Gap

Information technology is nothing new, but for a developing country like Indonesia it is a luxury. That’s why Minister of Information and Communications Sofyan Djalil gave a warm welcome to the idea of leading software company Microsoft establishing cooperation with the Indonesian government in strengthening software companies in Indonesia and increasing their number.

Currently, there are no fewer than 250 small software companies in Indonesia. Microsoft hopes that the government will boost their development by providing support in various sectors, including copyright protection of the software they create. “Our country is notorious for software piracy, which is one of the worst in the world after Vietnam and Ukraine,” said Tony Chen, president director of PT Microsoft Indonesia.

According to a study by International Data Corporation (IDC), software piracy in Indonesia constitutes 87 percent of all the software used. The piracy causes state losses of US$70 million to $80 million per year.

Meanwhile, according to a study by Business Solution Alliance (BSA), 97 percent of software in Indonesia is pirated, with losses totaling about $197 million.

The International Intellectual Property Alliance (IIPA) is also of the same opinion that software piracy in Indonesia has become a complicated problem that is a great cause of alarm. Software products usually pirated are those of Microsoft, namely Windows 95 (for operating systems) and Microsoft Office 97, an application product.

Without any protection over intellectual property, Tony said, the creation of new software will not develop perfectly. Not only will the owner of the intellectual property sustain losses but so too will do the state. The state, for example, will lose potential revenue from taxes on IT products. It is calculated that if intellectual property rights regarding IT products is properly honored, the state could collect taxes five times higher than what it does now.

Tony is concerned not only about copyright matters but also about the digital gap in Indonesia. That’s why as the top leader of a leading software company, it is in his best interests to make Indonesia information-technology literate.

Tony has been instrumental in facilitating dialog between Microsoft and high-ranking officials and decision-makers within the Indonesian government. He is passionately committed to assisting and supporting the government in developing its national IT strategy as well as bringing information technology to the whole of Indonesia.

Various efforts by Tony have resulted in important meetings between Microsoft and the Indonesian government. Thanks to these efforts, for example, a meeting could be arranged between President Susilo Bambang Yudhoyono and Bill Gates at the head office of Microsoft, the U.S. in May 2005.

Then, research cooperation has also been established between Microsoft Research Asia (Beijing) and ITB and ITS. Tony has also facilitated many other meetings and in January 2006, thanks also to his efforts, a License Compliance MOU was drawn up between the Indonesian Ministry of Information and Communications and Microsoft Indonesia.

Microsoft is a leading software company. Globally, its revenue stands at $44 billion while its operating income is recorded at $16.4 billion. As one of the world’s top IT companies, Microsoft has enjoyed quite an impressive growth in market share. While in 2000 its market share was recorded at only 18 percent, five years later it rose to 23 percent.

Although relatively new as a global brand, Microsoft is ranked second after Coca Cola, a long-established soft drink brand. Microsoft, which is listed on international stock exchanges, has offices in 100 countries and employs about 70,000 people worldwide.

Microsoft Indonesia was established in March 1996 and is a subsidiary of Microsoft with a head office in Redmond, the U.S. At first it employed only five people but now its workforce reaches over 100 people. Part of the operation of Microsoft Asia Pacific Region, which covers ASEAN countries, India, Korea, Australia and New Zealand, Microsoft Indonesia is one of the most developed Microsoft subsidiaries of the past four years.

Tony attributes the success of Microsoft Indonesia to Indonesia’s huge market potential as this country has a large population totaling some 245 million people. Meanwhile, there are only five million personal computers in Indonesia or, in other words, only 2 percent of Indonesians own a personal computer. “The development follows geometric progression. This is like the cellular telephone phenomenon. Unexpectedly, the number of cellular telephones has grown really fast,” he said.

That’s why Tony is optimistic about making Microsoft Indonesia the most admired company that will give added value to its clients, business partners and workforce and help the government overcome the digital gap. “Our mission is to enable people and businesses throughout Indonesia to realize their full potential,” he noted.

According to a poll by a management consulting institution in cooperation with SWA magazine, Microsoft Indonesia is considered a company where employees are encouraged to build their careers. “We don’t just give our employees attractive salaries and incentives but also make the office their second home,” Tony said.

As the work atmosphere is comfortable, Tony has no qualms about developing the business of the company. Microsoft Indonesia always updates its business, honors its corporate social responsibility and establishes partnerships with the government.

Indeed, some 40 percent of the company’s business activities are designed to serve the interests of the government and state-owned enterprises, but at the same time Microsoft Indonesia does not forget the private sector and has become a partner in learning for a number of small and medium enterprises. Partnering with small and medium enterprises, Microsoft Indonesia has fostered three distributors, five large retailers, four certified Microsoft partners for support services and over 500 other retailers.

Meanwhile, in terms of establishing its network, Microsoft does not concentrate only on Jakarta but has expanded to rural areas, including remote places. Besides including schools in its education program, Microsoft has also entered the agricultural sector, on which some 42 million Indonesians rely for a livelihood. “There are now quite a lot of IT-literate farmers and they sell their products through the Internet,” Tony, a father of three, said proudly. (Burhan Abe)

The Jakarta Post, December 13, 2006

Togetherness is the Key

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Togetherness is the Key

The soft-spoken president director and CEO of Bank NISP, Pramukti Surjaudaja, gives the impression of being a very serious man. But as everyone knows, first impressions can be deceiving, and every now and then Pramukti cracks a joke to lighten the mood.

Pramukti comes across as a warm and modest person, especially when asked what formula he uses to ensure the success of Bank NISP. Thanks to him, the bank, originally just a minor bank in Bandung, has been transformed into a solid and well-reputed private bank.

NISP has won a number of awards nationally, regionally and internationally. It was named “Best Domestic Commercial Bank in Indonesia” by Hong Kong’s Asiamoney magazine in 2002, named “Best Bank in Indonesia for 2003” by Euromoney Magazine and “Best Emerging Market Bank in Indonesia 2004” by Global Finance Magazine of New York.

Pramukti was awarded the Golden Trophy 2006 for “Excellent Performance for Five Consecutive Years” by InfoBank magazine.

It cannot be denied that NISP was able to win all these awards thanks to Pramukti’s capable hands in developing the bank so that its assets, worth only Rp 1 trillion in 1996, have ballooned to Rp 22 trillion in 2006. However, Pramukti is modest about the achievements.

“All this is the fruit of the hard work of all NISP stakeholders. This is a joint success, I’m not the only one responsible for this success,” said Pramukti, who was named Best CEO 2004 by SWA Magazine.

In his opinion, managing a company means maintaining togetherness, especially in corporate culture matters. Company management means making an effort so that all employees and all stakeholders of the company will enjoy various benefits.

“The bank’s management believes that if we can keep our staff happy in their jobs, it will result in business continuing to grow and our customers and investors will have peace of mind after depositing their funds at NISP,” he stressed.

In realizing this goal, Pramukti deems it necessary to involve all these elements in the creation of corporate values. About 1,000 employees are involved in this value creation.

“The creation of corporate values cannot be undertaken unilaterally, for example only by the board of directors. It must involve all employees because they will put the values into practice and enjoy the benefits,” he noted. As a result, following the creation of the bank’s values by the management and employees, NISP’s program to develop its business has run as expected. In its 61 years of existence — the bank was established in 1941 in Bandung — NISP has overcome various obstacles, survived crises and developed into a leading domestic bank.

If Pramukti gives the impression of being modest, it is due to his upbringing. Born in Bandung on July 1, 1962, his family prioritized harmony in all aspects of life. Despite the fact that they owned NISP, Pramukti did not immediately get a top position at the bank. However, his father, Karmaka Surjaudaya, now president commissioner of NISP, started introducing Pramukti to the family business as a teenager. While still at school, Pramukti learned the principles of accountancy, bank management, customer service and everything about the banking business.

After completing senior high school at St Aloysius, Bandung, he went to the United States to study finance and banking at the University of San Francisco, and earned an MBA degree from Golden Gate University in San Francisco. He also took a special program on international relations at the International University of Japan in Niigata, Japan. He also took several executive programs at MIT, Stanford University and France’s Insead.

Pramukti was keen on learning and now tries to inspire all his employees to be enthusiastic about learning.

When Pramukti joined NISP in 1987, he started in the marketing department and was appointed managing director in 1989. In April 1997 he was named president director and CEO of NISP, a position he still holds. He said there were a lot of joys and sorrows in running the bank, especially when his family decided to list the it on the capital market and thereby give up full ownership.

The family resorted to going public because it was one way to ensure the growth and development of the bank. Then NISP established a strategic alliance with the International Finance Corporation (IFC), a subsidiary of the World Bank, as IFC was interested in providing long-term financial support and being an NISP shareholder. An alliance was also forged with the Overseas Chinese Bank Corporation (OCBC) of Singapore, now the majority shareholder of NISP with a 72.29 percent stake.

Pramukti says the family made the right decision in giving up full ownership of the bank, saying that this way the public gets more benefits. Today, NISP has 225 branches throughout the country and its employees, only about 900 people in 1996, now number about 4,000 people.

Despite his tight schedule, Pramukti always finds time to tend to his aquarium fish, in which he finds pleasure. Once in a while, Pramukti, who has one daughter, goes to Bandung to visit his extended family. He also likes diving. “I feel totally different when I dive and enjoy the time away from routine activities,” he said. He has visited most favorite diving sites, but has been unable to dive for a few years due to lack of time. (Maulana Yudiman)

The Jakarta Post, November 08, 2006

Rene’ Suhardono Canoneo: Building Career While Whetting Business Intuition

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Rene’ Suhardono Canoneo: Building Career While Whetting Business Intuition

The mid-1997 monetary crisis virtually brought to a stop most economic activities in Indonesia. However, the recession, like a coin, had two sides to it, that is positive and negative. One positive outcome was the birth of tough entrepreneurs. Rene’ Suhardono Canoneo is a case in point. He tried his luck in the food business, and along with 10 business partners, set up a tent cafe called “Sambel Tomat” (spicy tomato sauce) on Jl. Mahakam. “It was not a unique idea, but our concept was different from other food stalls,” said Rene’, born in Jakarta on July 8, 1972.

And even though running a tent cafe is easier said than done, Rene’s cafe survived, thanks to his earnestness and passion. In 1999, he moved his food stall to a more established area, Kampung Tenda Semanggi, Semanggi Tent Village, and renamed it Dixie.

It was here that good fortune began to smile on him. After operating for seven months in the new area, his 120-seat cafe, measuring 12 by eight square meters and employing 20 people, reached breakeven. Dixie benefits from its superior menu, which was prepared by one of his business partners, Ragil Imam Wibowo, a childhood friend. Besides Ragil, formerly a chef at a five-star hotel in Jakarta, help also comes from Rico Kasmanda, who is excellent at financial matters. “We survive because we share a common dream to have something better,” said Rene’, the only son of Rini Warsono, 49, and Vicente Canone, 71, who comes from the Philippines.

Rene’ and his partners were not satisfied with one cafe and in 2000 opened another outlet in Lippo Sudirman, but closed it in 2004 after a dispute with the building management. Dixie continued to operate under an easy dining concept, and its owners opened more outlets: on Jl. Kemang Raya (150 m2), in Cilandak Square (80 m2), in Taman Rasuna Said in Kuningan (30 m2) and at Benton Junction in Lippo Karawaci, Tangerang (180 m2). In 2005, they opened another Dixie outlet on Jl. Gejayan, Yogyakarta, which is Rene’s first expansion outside Jakarta. All these Dixie outlets are under the control of PT Trirekan Rasa Utama (TRU), a company Rene’ set up with Ragil and Rico.

TRU allows Rene’ and his business partners to move forward with confidence. In 2005, for example, TRU made another hit when it opened Mahi-Mahi. This restaurant, located on Jl. Antasari, Cilandak, South Jakarta, and also used as TRU head office, serves only seafood, with patrons choosing the fish they wish to eat. There are over 15 species of fish to choose from, like kerapu bintang, amplas, senangin, kaka tua, rop ropo and kaneke, which come from Bali and Makassar waters.

While in the case of Dixie, outlets are established with different investors but operated fully by the management of TRU. In the case of Mahi-Mahi, outlets are developed under a franchise system. Mahi-Mahi franchisees simply pay TRU a fee of between Rp 150 million and Rp 250 million for a period of three years, depending of the size of the outlet. “We can do this because we have a standardized system, encompassing a concept, management and food taste and raw material supplies,” said Rene’.

Indeed, in addition to running his own business, Rene’ is a professional at Amrop Hever, a head-hunting company.

This company, Amrop International and The Hever Group, which is a world leading institution for the recruitment of executives, involves 800 professionals in 85 offices in 52 countries.

How does Rene’ arrange his time so there is enough for his activities as an executive and as a restaurant owner? To which he responds that it is not that difficult, he divides his time on the basis of strict discipline. Of course, when he started his own business, he had to work harder than usual. At one point he was running around in all directions without knowing what to do, especially because, as his Dixie business was booming, he became increasingly busier as an executive. Therefore, he slept less, had less leisure time and worked harder.

However, he became more tactical and strategic in his thinking. “Fortunately, with good management, the work load can be arranged. All jobs, especially those of a clerical nature, can always be delegated,” said Rene’, a graduate of the School of Economics of the University of Indonesia.

More importantly, though, his boss at Amrop, Pri Notowidigdo, who Rene considers his “professional father”, highly supports his office career and his side business. As for hurdles, he says they are second nature to him. “What I mean is that all this is a choice. If you think of it as a hurdle, it will be a hurdle. Just don’t think of it as a hurdle,” said Rene’.

He and his partners are looking for business partners for the establishment of Mahi-Mahi in a number of areas in Jakarta. As for Dixie, Rene’ is planning new outlets in Ambarukmo Plaza, Yogyakarta, Soewarna Park in Soekarno-Hatta Airport, Semarang and Surabaya next year. “We’ll sell not only food but a culinary experience,” he noted.

Sometimes Rene’ does not know to what extent he will ultimately develop his business. He greatly enjoys what he has achieved and is not afraid of failing. He is also developing two new brands, Rice Bar, with rice as its specialty, and Health Freaks, a food delivery service for office workers in Jakarta’s Golden Triangle.

Meanwhile, he is also planning to open, in the immediate future, Warung Pizza, a sidewalk-class pizza stall. “It is not because I like pizza and can make it but because this Italian food is well accepted by Indonesians.” (Burhan Abe)

The Jakarta Post, October 11, 2006

Irfan Ramli: Building a Brand with a Strategy

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Irfan Ramli: Building a Brand with a Strategy

MANY people believe that creative work in Indonesia’s advertising world only ever gains domestic recognition. Indeed, very few such works have passed the test internationally.

That’s why the news that three Nissan X-Trail print ads, which are the work of Hakuhudo Indonesia, have been nominated in Cannes 2006 global advertising competition has spread rapidly.

Hakuhodo? Any relation with the famous Hoka Hoka Bento, a restaurant offering Japanese fast-food?

Indeed, Hakuhodo does not quite ring a bell in the advertising world in Indonesia. Irfan Ramli, the president director of Hakuhodo, said the company has been in operation in Indonesia for three years. “In fact, in Japan, the principal’s country, Hakuhodo is one of the companies that was established well over a century ago,” he said.

Initially Irfan hoped that with well over a century of experience in the advertising business, Hakuhodo would find it easier to expand its business in Indonesia. Unfortunately, business expansion is not as easy as a wave of the hand. “I really started from scratch,” he said.

It is true marketing and advertising activities have enjoyed rapid development but to enter a tough market, hard and smart work is needed. With its 12 employees, Hakuhodo is actively engaged in pitching activities to obtain a project. As the company bears the name Hakuhodo, it can easily gain access to Japanese companies. “This access, however, will be useless unless we offer a creative and unique concept,” said Irfan, a father of two.

A period of three years is relatively brief and Irfan believes that to get a good result, substantial time and effort will be required. “There are no instant results. Good things always take time,” he said.

Irfan, who left Polyama Advertising as its vice director, can finally thank God that Hakuhodo, now employing some 50 people, has gained about 12 clients such as Nissan X-Trail, Panasonic (dry cell batteries), Yakult, Suzuki Spin 125 and Kopi ABC.

The current advertising industry landscape is indeed changing. While before a client would simply trust one advertising agency for creative, placement and execution matters, today it will usually hire two specialized agencies: a brand agency and a media agency. Hakuhodo, while also accepting orders for advertisement placement, focuses itself more as a brand agency. “Building a brand so that it gains strength gives you a special sense of satisfaction,” Irfan noted. “Of course, the success of a brand is not attributable to our own efforts alone but the fact is that we have successfully strengthened the positioning of Nissan X-Trail as No. 1 sports utility vehicle in Indonesia,” he said by way of an example.

Admittedly, advertising not only builds and creates brand awareness but also boosts the market share. Once he was deeply obsessed by the desire to build a brand. He even considered abandoning the advertising world to focus on being a marketing consultant for just a number of companies.

However, the offer made by Hakuhodo, which was then looking for a partner in Indonesia, made him think twice. “To build something from scratch is really difficult and not so attractive but as I am partnering with Hakuhodo, at least I have an initial capital outlay,” said Irfan, the eldest of five siblings.

Born in Surabaya, Irfan has interesting parentage. His mother, is of Gorontalo’s Sangir Talaud and Chinese blood, and his father is Arab-Indonesian with the surname Basalamah. Irfan began his career in the advertising world when he decided to join Polyama. “In fact, I was then close to joining a TV broadcasting station,” said Irfan, who graduated from Avalon Studio, New Zealand, in 1992.

In Polyama, he joined the client service department and the first clients he was entrusted to handle were Bank BNI and ITC Mangga Dua. “When you deal with a client, you learn a lot. You can combine the concept offered by an advertising agency and your client’s wishes,” said Irfan, who quickly climbed the career ladder and was made vice director in 1998.

To win the market, Irfan said, there are two main keys, namely the concept offered and the strategy. Although these two elements are standard, they should not simply be a discourse offered to a client while budgeting is given a less important role. “What matters more is that before a strategy is formulated, a research must first be made, be it a serious research involving a research institute or an informal one, to ensure that only the right decision is made,” said Irfan, who is currently the secretary-general of the Association of Indonesian Advertising Companies (P31).

Irfan realizes people in the advertising world must be more observant in their work and adopt a better strategy, given market complexities, media fragmentation and the clutter of advertisements. In such conditions, the availability of data and information, a good understanding of industrial trends and development and anticipation of changes are important elements to consider before a business decision is made.

In leading Hakuhodo, Irfan does not set his goals very high. He will be satisfied if the company can get into the group of medium-class advertising companies with annual billing totaling between Rp 100 billion and Rp 150 billion. At present, Hakuhodo’s billing stands at some Rp 80 billion with a gross profit ranging between 15 percent and 19 percent. With this achievement, he is close to reaching his goal, which he envisions will be reached in the fifth year.

According to data compiled by Nielsen Media Research, advertising spending throughout 2005 was worth a total of Rp 23 trillion. Irfan, however, believes that the real figure is less than half of this amount because Nielsen’s survey did not take unusually large bonuses and discounts into account.

The year 2006, Irfan said, is actually the most difficult year for all types of industries because it is only now that the impact of fuel hikes is being felt. This is especially felt by the advertising industry. When introducing efficiency measures, nearly all companies will, first of all, cut their advertising budget. “There is a natural selection of sorts. Whoever can survive this year may experience plain sailing in future. However, no matter what the conditions, we must always hold on to our optimism,” he noted. (Burhan Abe)

The Jakarta Post, September 13, 2006

Creating Goliath, David’s Helper

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Creating Goliath, David’s Helper

In the Bible, the story of David and Goliath tells of a fight between an ordinary human being and a giant. Although Goliath was far stronger than David, David won the duel due to his cleverness. In the hands of Yoris Sebastian Nisiho, however, Goliath has become a collaboration project that will help many Davids grow into hit-selling musicians.

With the Goliath Project he is now preparing, Yoris is making his way toward further success following his successful “I Like Monday”, a program at Hard Rock Caf‚ that he initiated 10 years ago. In this current project, Yoris is planning to mix various activities such as collaboration involving various musicians, workshops, the making of albums and the making of a musical database that can help businessmen in the music area to develop their businesses.

Yoris, who represented Indonesia, presented his Goliath Project before the panel of judges at The International Young Music Entrepreneur of the Year (IYMEY 2006), organized by the British Council in London between late June and early July. “The preparation was short. The idea came up just before I had to leave for London,” he said.

Although he went to London in an individual capacity, Yoris said he was quite proud because he represented Indonesia and had to compete against music practitioners from 10 countries with their respective superiority and uniqueness. Yoris devised the Goliath Project as a vehicle through which music can be developed on the basis of investment support from Goliaths.

The Goliaths in Yoris’ vision are rich young men aged a maximum of 35 years, those who have a lot of spare money who can use it helping Davids, who can be just about anyone in the music business, such as solo singers or local bands with great potential for future development. However, this investment must yield a profit for these Goliaths.

“Besides reaping a profit, they can help new talents emerge in the music arena,” he said.

Since his participation in IYMEY 2006, Yoris has become even more convinced that music is a highly promising business. He also believes that the creative industry, which includes the music industry, may contribute significantly to the state’s coffers if it is run properly. In England, he said, the music industry is ranked second after the financial services industry in terms of contribution to the country’s revenue.

What about Indonesia? There is still quite a long way to go before the music industry becomes a prime business sector here. Still, Yoris will consistently strive to build this industry in Indonesia. His interest in music can be summed up in just one word: passion. He has made up his mind to totally immerse himself in building a career for himself in the entertainment business. To focus on the entertainment business, he gave up his studies at the accounting department of Atma Jaya University in Jakarta

When he was a senior high school student, he joined a teenage magazine in Jakarta as a freelance worker in order to start developing his professional skills. He also initiated the organization of Pangudi Luhur Fair, a high school art festival capable of drawing in sponsorships worth up to hundreds of millions of rupiah. When he later decided to give up his university studies, he spent his time selling various things, ranging from advertisements on the launch of albums of new artists to consumer goods and sports products.

In 1993, he was offered the position of assistant advertising and promotions manager at Hard Rock Cafe (HRC) in Jakarta. He then devised a program to feature local bans in this cafe. Called “Local Sunday Band”, this program presented, among others, Java Jive, Kahitna, Porotonema and rif.

When he was entertainment manager of HRC, he made a new program called “Save Ragunan Zoo”. He collaborated with Air Supply to collect funds for the renovation of Ragunan Zoo.

Yoris, who was born in Makassar, South Sulawesi on Aug. 5, 1972, is also very interested in technological development and has come up with an initiative for a video request program, which is relatively new in Indonesia.

For this program, he has adopted VDS (Video Distribution Center) technology, which will make it possible for the promotions of albums held at HRC in Jakarta and Bali to be screened at HRC in several other countries. The head office of HRC in the United States has given him the go-ahead for this program and Dewa will be the first Indonesian music group whose album promotion will be distributed through VDS.

“Hopefully, this effort will make our local artists known in the countries where HRC is found,” he said.

Of all the programs that he has devised, the one Yoris is most proud of is “I Like Monday”, a program featuring local bands and singers that has been held every Monday since 1996.

Yoris, then advertising and promotions manager at HRC, wanted to introduce a breakthrough for his cafe every Monday, which is generally considered a slow business day because it is perceived that people are reluctant to go to cafes on the first day of the business week.

Many artists that Yoris invited to perform in this Monday program have been happy to perform at HRC and HRC has made a good profit because the number of visitors on Mondays has become as big as, or sometimes even bigger than, on weekends.

Although HRC is a franchised cafe with its own standards and management procedures, innovations and local touches are still needed to ensure that HRC is a big name in the entertainment business. In this respect, Yoris has successfully made HRC one of the most famous cafes in Indonesia.

Thanks to this success, on April 1, 1999, he was made general manager of HRC and, upon assuming this position, became the youngest general manager in HRC’s Asia chain and the first local national to be appointed general manager.

At the same time, he was also the second youngest general manager in HRC worldwide. Generally, the post of general manager goes to an expatriate, be he a U.S. or Singaporean national. As GM, Yoris has paved the way for Indonesian artists to perform at HRC in Singapore and Kuala Lumpur.

Owing to his talented marketing skills, Yoris has been able to introduce a number of marketing breakthroughs, which is why he was presented the Young Marketer Award by IMA-Mars in 2003.

He learned everything about marketing through self-study, said Yoris, who likes to read in his spare time.

One of his popular marketing and business concepts is “coopertition”, a combination of cooperation and competition. While other people view cooperation and competition as two different things, Yoris believes that competition can be used as a means for cooperation so that something can be done for the benefit of all parties.

Under Yoris’ leadership, HRC has also been named the Most Admired Company in Indonesia. This award shows Yoris’ great capability in leading and managing HRC. While noted marketing expert Hermawan Kartajaya has popularized the principle of Marketing in Venus in terms of leadership, Yoris chooses to lead in the style of Management in Venus or, in his own words, a good-natured management style.

The days when a boss could use force to command respect from employees are gone, he said. In his view it is not enough for a leader to merely demonstrate good and correct leadership because a good leader must also be wise and inspire his employees. “He must be firm, not stern,” Yoris said. (Maulana Yudiman)

The Jakarta Post – August 16, 2006

Mardi Wu: Innovations that Go On and On

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Mardi Wu: Innovations that Go On and On

INNOVATION is a key word in business. It may sound cliche but Mardi Wu repeated this word several times with firmness. At just 34 years old, Mardi is the managing director of Tropicana Slim, a division of PT Nutrifood Indonesia, and has been responsible for dozens of products under the Tropicana Slim Strategic Business Unit (SBU) since 1999.

“There are two other directors equal to me in other SBUs, but I am directly responsible to the owner,” said Mardi, the second man in charge in the company.

Mardi is responsible for the management of popular health food products, such as Tropicana Slim low-calorie sugar, WRP, Body Shape and Stay Slim (all dieting products), Nutrisari and Nutri Tea, Hi Lo milk, L-Men and the latest, Diabetamil, milk especially produced for diabetics.

Since he first joined Nutrifood Indonesia as research and development manager in 1995, Mardi has known that the company is a pioneer in the market. “Its first product was Tropicana Slim, which is a syrup product for diabetics. This was the first such product in Indonesia,” he said.

Nutrifood products, Mardi said, are always related to low-calorie sugar, which are needed by people suffering from degenerative diseases like a heart trouble, stroke, diabetes and many others that are mostly complications of diabetes. Since 2004, the World Health Organization (WHO) has also shifted its campaign from, originally, the dangers of smoking to diabetes, because the latter is more destructive than AIDS and the avian flu. “Indonesia has a strong tendency and prevalence in that direction so WHO has estimated that we will end up being one of the countries with the highest diabetes rate in the world,” Mardi said.

Hence the recommendation that granular sugar should be limited to a maximum of 10 percent of one’s calorie needs. Indeed, alternative sugar like Tropicana Slim constitutes a small market niche, but the industry itself is much larger as it also involves health foods.

Other characteristics of Nutrifood products is that they are concerned with health and are innovative in nature. “Our market is the middle to upper class, the type of people who indeed are deeply concern about their health. Our competence lies in this area,” Mardi said, giving an example of the composition of low-calorie corn sugar as one of Nutrifood products, which is unique and envied by business competitors.

There are many products similar to Tropicana Slim today so Tropicana Slim needs to innovate to maintain its leading position. One example is that it has extended its line to include things such as lemon C, anti-oxidants and a special product for diabetics other than the classic sugar. “We don’t want merely to be in the market. We want to be unique. Our Tropicana Slim sweet soybean sauce, which is sugar free and low salt, may be the only such product in the world,” Mardi said.

Mardi, who earned a BA in food technology at the Bogor Institute of Agriculture (IPB) and a Master of Science in industrial administration from Purdue University, U.S., is also one of the brains behind Nutrifood’s L-Men, milk especially intended for males. “I think not only Caucasian men can have good physiques but Indonesian males can too,” Mardi said about how he came to think of producing this special milk for men.

When he lived in the U.S., he noticed that most of his college mates regularly went to the gym to work out. So when he returned to Indonesia he also wanted to see Indonesian males get into the same habit. Mardi and his team have also introduced Hi Lo, milk intended to prevent osteoarthritis. “So far our market has known only calcium-rich milk to prevent osteoporosis. In fact, our survey shows that there are more people suffering from osteoarthritis. Some are even still in their 30s,” he said.

Hi Lo, which is the only milk here for people with osteoarthritis, was launched in 2004 and is now ranked second nationwide with a market share of some 20 percent.

As a leader, it is Mardi’s job to ensure that innovations continue to be made. The key, said Mardi, who was named “The Most Promising Young Marketer 2002” by Swa magazine, is the “learning spirit, sufficient dynamism, sufficient flexibility and quite a high speed at work. All these factors will lead to good innovations.”

To support all these efforts, Mardi, who originally aspired to be a teacher, pioneered a Management Development Program for young managers at Nutrifood. The curriculum is like that in an MBA program. But the program lasts 1.5 years, with lessons conducted every Friday and Saturday and spanning 8-10 hours per week. The third batch of trainees is taking this program. Here Mardi not only initiated this program, but also teaches it, particularly strategic management.

Eventually, these excellent human resources, Mardi said, are expected to form a solid work team and support a strong corporate culture. Of course, they also need the support of strong research and development undertakings with good laboratories.

Mardi’s love of knowledge can also be observed in his office, which is located in the Pulogadung industrial estate. Absent is the atmosphere of a factory and barrenness of an industrial estate. Instead, green leafy trees can be found in every corner. There is a library for employees on every floor of the office building.

In order to get personnel with a strong quest to learn, Mardi himself often interviews candidates. “Teaching on the campus is one of the ways to obtain good personnel,” said Mardi, who also teaches in the master’s program in the food technology department at IPB and in the biotechnology department at Atma Jaya University. “If the team is good, everything will be far better,” he said.

The career of this man born in Bagansiapiapi, North Sumatra, has been quite smooth. After obtaining his Master’s from Purdue University, he returned to Nutrifood to become its purchasing manager. He was made corporate strategic planner five months later, when Nutrifood was split into a number of companies. “I was assigned a project to restructure the company, including drawing up the vision and mission of the company, re-arranging the personnel and charting the organizational structure. In short I was assigned a strategic planning job,” he said.

After completing this restructuring, he led one of the SBUs. “There are two things that give me the greatest pleasure working here. First, innovation. Second, teaching, recruiting and guiding new recruits until they are established in their jobs. Both give me satisfaction in their own right,” said Mardi, who has worked for no other company but Nutrifood.

A sports regular, traveler and avid reader, Mardi believes that the greatest challenge in his career is how to improve the quality of his leadership. “I still must to learn to be more patient. I should listen more to other people and show more empathy toward them. I also should be better at directing our teams so that they will become more effective,” he said.

Leadership is important to ensure that Nutrifood will survive in the business and win over the market. So one of the duties of the company’s executives, he said, is to ensure that all those involved in this business become well-acquainted with the company’s vision and mission, although he admits this is quite difficult.

One of the key elements in leadership is ingenuity, which he found after reading Heroic Leadership, a book by Chris Lawney (2002). It is said that a leader must be not only flexible but also smart enough to make use of existing strengths. It is the strength of innovation that Nutrifood must always have to ensure that its products are not copied by other people. To this end, everyone must have their own ideas, which may be obtained from just anywhere. “You must read a lot, listen a lot and observe a lot. You must also speak with other people. A search for ideas may not necessarily be structured but what matters is our desire to be always curious,” he said. (Lily G. Nababan)

The Jakarta Post, August 09, 2006

Widigdo Sukarman: Experience is the Best Teacher

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Widigdo Sukarman: Experience is the Best Teacher

Is it true that experience is the best teacher? If you believe so, learn from Widigdo Sukarman, former CEO at a number of state banks (BNI, Papan Sejahtera and BTN) and now lecturer at several institutions.

Widigdo, who was born on Dec. 31, 1941 in Banjarnegara, Central Java, is the right person to learn from. “Even when I’m in a classroom, my students ask me just to share my experiences with them because, they say, they can learn theories by themselves,” said Widigdo, who earned his doctoral degree from the School of Social and Political Sciences at Gadjah Mada University (UGM), Yogyakarta, in 2003.

Indeed, who wouldn’t want to hear or learn from his experience as the top executive at a number of banks over several years? He led these companies, introduced efficiency programs and dealt with a crisis. However, Widigdo does not agree with an opinion that he is better than other lecturers as each lecturer has his or her own pluses and minuses. “Some lecturers do not have much experience but they teach well. Others have had a lot of experience but fail to share their experiences,” said Widigdo, who is also a member of the board of trustees of the Master of Management Program at University Gadjah Mada (MM UGM).

Ideally, however, he went on, a good leader must also be a good teacher. “How can he convey his ideas if he cannot present them properly?” he said.

This was the reason that, when MM UGM was still under consideration in 1988, Widigdo was not only involved in the process of initiating this masters program but he, who was at that time still the chief of the planning division of BNI, asked his staff to teach particular programs. He also gave a general lecture there. “Fresh graduates from abroad could teach there. While improving their ideas, they could earn additional income. These people were given credit points and their involvement in this masters program at UGM was also part of the personal appraisal at BNI,” he said.

Education is inseparable from Widigdo’s life. “Especially so, since I’m a son of a teacher. It runs in my blood,” said Widigdo, the seventh of nine siblings.

Widigdo has earned several degrees like Master of Public Administration (MPA), Master of Business Administration (MBA) and even PhDs from the world’s most prestigious educational institutions. He obtained the degrees because he likes education.

Widigdo, who earned his MPA from Harvard University in 1983 and his MBA from Boston University in 1985, both in the United States, refutes the belief that when an official is assigned to study further, this means that he has been “discarded”. He himself had a funny experience while studying in the United States.

A young man in his class asked, “Since you are older, why are you still studying? You’re no longer useful in your office, right?”

Widigdo only chuckled, but deep in his heart he wondered whether the young man was right after all. However, he later realized that his career at BNI, where he started working after earning his BA degree from UGM’s School of Economics in 1965, was bright enough. He later went on to become chief executive officer of this state bank. He spent some time working as CEO of Bank Papan Sejahtera and then at Bank Tabungan Negara (BTN) before he was eventually re-assigned as the top executive of BNI when the bank was planning to go public.

Some people have said that there is nothing special about his leadership because, they argue, the companies entrusted to him already ran well. “They may be correct,” he said. “However, in every company there is always a black box that contains internal problems. Therefore, it is demanded of a CEO that he should not only be well versed in the problems facing his company but that he can also provide wise solutions to these problems.”

His work to prepare BNI to go public in November 1996, the year marking 50th anniversary of the bank, left a strong impression on Widigdo. “We prepared the whole thing in just three months,” he said proudly. However, the bank’s listing went perfectly as its shares sold well and were even oversubscribed.

Eko Budiwiyono, president director of Exco Nusantara Indonesia, an international money broker, said that Widigdo’s actions could have been categorized as being too bold. However, Eko, who used to be an official at Danareksa, the underwriter of BNI’s initial public offering, investors eagerly anticipated snapping up BNI’s shares. “In fact, we previously underestimated this state bank. However, after the due diligence, our worries about this bank proved incorrect because it proved to have excellent performance,” Eko said.

BNI was successful in selling its shares on the stock market, helped by the fact that the macro economic condition of the country was conducive to the sale of the shares. However, Widigdo later faced a challenge when the financial crisis hit local banks, including BNI, in 1997. In fact, the acute economic crisis almost bankrupted Indonesia. Many companies had to introduce efficiency measures and lay off employees. “Lay off employees is the easy way out. In fact, there are many other ways to cut costs,” said Widigdo, who loves smoking cigars.

BNI was also facing a similar problem. Also equally important was its recapitalization to make it financially sound. Widigdo, therefore, did his best to look for sources of finance. “We made use of our overseas networking,” said Widigdo, who tries never to display concern in front of his employees. “We must show them that everything runs smoothly. A leader must give protection.”

One may be curious to find out how Widigdo could lead a government bank for so long. Some may just surmise that he followed the easiest path and dabbled in collusion and nepotism. “I don’t care what other people have said about me. I always do my job sincerely and always hold onto the principle that I have nothing to lose. A position is not forever because it can be taken away from you at any time,” said Widigdo, currently chairman of Risk Management Center Indonesia (RMCI)

Widigdo, who claims that he remains Javanese to the core despite his Western education, lives his life like flowing water. “I believe in destiny. Everything is preordained,” he said.

However, he said, we discover our destiny only after what has been destined to happen happens. Therefore, he always holds on to his principle of being persistent, willing to learn and observant. “Do not give up easily. If you fail, evaluate where you went wrong.”

Because of this principle, not only does Widigdo evaluate his performance, he also keeps on learning. “From school or from reading a great variety of books, such as books on Islam, Buddhism, politics, economics, management and so forth,” said Widigdo, an avid reader with a book collection of some 3,000 titles.

Knowledge and practical experience — these two elements are complementary and give you wisdom in running your life. Widigdo is like a walking dictionary, a living legend in the banking sector and someone from whom we can learn a lot. (Burhan Abe)

The Jakarta Post, August 02, 2006

Arif S. Siregar: Strong Leadership in Strong Sector

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Arif S. Siregar: Strong Leadership in Strong Sector


The appointment of Arif Soeleman Siregar as president and chief executive officer of PT Inco Tbk., a nickel company listed on the Jakarta Stock Exchange, came as no surprise. Arif, who was appointed to the helm of the company at a shareholders meeting in Jakarta on July 5, is indeed no newcomer to the mining business.

Before being appointed Inco’s CEO, Arif was president director of PT Kelian Equatorial Mining (KEM), a mining company that operates in West Kutai, East Kalimantan, with some 90 percent of the shares being controlled by Rio Tinto and the remaining 10 percent by PT Harita Jaya Raya.

In its operational heyday, KEM employed some 1,400 people and registered a production output of 450,000 ounces a year. In February 2005, ore reserves were exhausted and the company closed the mine. By the end of 2005, the company had reforested the former mining area and returned it to the government.

Arif had intended to retire in February 2006 but changed his mind when PT Inco Tbk approached him with a job offer. “Perhaps I’m still needed,” he said, modestly.

However, he entered the company with commitment in his new responsibility as CEO of PT Inco. Arif, a 1980 mining and metallurgy graduate of the Bandung Institute of Technology (ITB), said, “I never do things halfheartedly. I always do everything all out and do it correctly.”

The challenges faced by the mining industry now, said Arif, who was born in Padangsidempuan, North Sumatra, on Dec. 19, 1952, and earned a PhD in Metallurgy from the University of Queensland in Brisbane, Australia, in 1992, are heavier and more complex.

While mining companies operating in Indonesia were previously concerned only with their mining operations, since 1998 they have not only faced various demands but also have had to think about how to empower local communities. Corporate social responsibility is indeed inevitable not only in Indonesia but elsewhere in the world. That’s why as a mining company PT Inco must redefine its business. It is not enough for Inco to post the biggest profit possible but it must make its presence in Sorowako, Sulawesi, also called the Land of Sawerigading, useful to the environment.

Among other things, the company must help improve the welfare of the local community and provide technical and managerial support to ensure that there will be professional entrepreneurs. “Well, there are references for you to take care of internal affairs of a company but matters outside a company are often unpredictable,” he noted.

As a publicly listed company, Inco is indeed in the spotlight a lot. It was inevitable that the company would take its corporate social responsibilities seriously, especially after the company was involved some time ago in environmental and social problems, for example the illegal appropriation of land belonging to the Dongi and Petea tribes and their eviction from this land. “We are not blind to these problems. Instead, we remain committed to our social responsibility to the community and always make sure that we maintain good business ethics in running our business,” Arif said.

As one of the world’s biggest matte nickel producers, the management of Inco is convinced that it is not enough for the company to be merely a profit center but “it is also our concern to do our business as well as possible while still paying proper attention to the environment and our social responsibility,” said Arif, who also graduated from the General Manager Program of Harvard Business School, Boston, U.S., in 1998.

There is indeed no denying the excellent performance of PT Inco as a sound mining company. This company was established in 1968 and is owned by Inco Limited (61 percent), Sumitomo Metal Mining Co. Ltd. (20.09 percent), the investing public (18 percent), and four Japanese companies — Inco TNC Ltd., Mitsui & Co. Ltd., Nisshoiwai, Ltd and Sumitomo Shoji Kasisha Ltd. (1.01 percent). On July 26, 2006, Phelps Dodge Corp., the world’s third largest copper producer, purchased 60 percent of the shares of Inco Limited and Falconbridge Ltd., worth US$35.4 billion.

PT Inco shares are indeed highly attractive because the company is one of the world’s top producers of nickel, a multi-purpose metal that is used in hundreds of products, such as anticorrosion steel dishwashers, skyscrapers, floppy discs and jet engines.

PT Inco’s competitive edge comes from the abundant nickel ore reserves for which it secured a contract to exploit on 218,528.99 hectares of land. It has skilled and trained manpower, a low-cost hydro-powered generating plant and a guaranteed market for its product. PT Inco has set a target that its production capacity will reach 200 million pounds of matte nickel in 2009.

If this target is reached, Inco will be a very lucrative business entity. In the first quarter of 2006, Inco produced no less than 38.3 million pounds of matte nickel — half finished product processed from laterite ores — all to fulfill the offshore market, particularly Japan. The sales recorded by this company in the first quarter of 2006 stood at $181.9 billion, up 6.40 percent from the figure registered in the same period last year.

Given its outstanding performance, Arif is optimistic that PT Inco will give a high return to its shareholders. The company will also actively hold talks with various parties, including shareholders, employees, local communities, the government, customers and suppliers, to ensure that good relations are maintained.

In view of these measures, Arif believes Inco’s corporate vision will make it a leading multinational company in Indonesia, consistently generating a high investment yield and at the same time adhering to strong corporate values. “Strong leadership is needed in this regard,” said Arif, who is fond of golfing and riding his Harley Davidson. (Burhan Abe)

The Jakarta Post, July 19, 2006

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