The Kuala Lumpur & Selangor Chinese Chambers of Commerce and Industry (KLSCCCI) had organised a seminar on 'Activate Asia: Insight Indonesia' on 8 July 2010 with assistance from the Associated Chinese Chambers of Commerce and Industry Malaysia (ACCCIM) and the Indonesian Embassy in Kuala Lumpur, to assist Malaysian businesses to gain better understanding of business opportunities in Indonesia. Our Group Chairman and CEO, Tan Sri William Cheng who is also the President of KLSCCCI and ACCCIM delivered the opening address at the seminar which was officiated by HE Tan Sri Prof. Drs Da’i Bachtiar, Indonesian Ambassador to Malaysia.
Group Executive Director, Tan Sri Albert Cheng was also present as one of the panelists and shared his experiences of working in Indonesia having spent ten years there from the seventies to the eighties followed by regular trips to keep abreast with the Group's operations and developments in the country.
The Group has invested in Indonesia since the 1970s and has 2 public listed companies engaged in the businesses of manufacturing and marketing steel office furniture, steel rackings, C channels, wire mesh, roof trusses etc. It has substantial market share in the steel office furniture in Indonesia and its operations span all the islands there.
Some of the pertinent insights by Tan Sri Albert were: - Indonesia has undergone a lot of changes since the 1970s. Doing business is much easier now. Previously, Customs clearances used to take a month or more but now take about a week.
- The Indonesian rupiah has depreciated quite a lot over the years. From a low of Rp2,500 to one US Dollar in 1997, it is now about Rp10,000. Imagine the Ringgit going from RM2.50 to RM10.00 to one US Dollar, and the impact that would have on business. However, companies in Indonesia have learnt to deal with the impact of devaluation, especially on the balance sheet. For companies that are buying and selling domesticsally
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domestically, there is no impact and accounts receivable remains unchanged; but for companies that are importing raw materials in US Dollar and selling the finished product in rupiah, the impact would be an increase in accounts payable in proportion to the devaluation.
- Similar to investing in any other country, partner selection is very crucial. There will be serious trouble if one picked the wrong partner as the dispute settlement process is very complicated. If possible, it is better to settle the problem on a bilateral basis. Otherwise, it might incur a lot of expenses and the outcome may not be to one’s satisfaction.
- The political situation in Indonesia has greatly stabilized since the days of former Presidents Megawati and Gus Dur. The last presidential election was relatively peaceful without any major demonstration. President Susilo Bambang Yudono won by a landslide in the direct presidential election by the citizens. Indonesian politics has matured a lot with democracy taking hold.
- Bahasa Malaysia is quite similar to Bahasa Indonesia and thus, it is easy to get around in Indonesia. However, there are some words with different meanings, such as Bapak which is father in Malaysia but Mister in Indonesia, or Ibu which is mother in Malaysia but Madam in Indonesia. There are also differences in expression, for example, in Malaysia, 6.30 is enam setengah but in Indonesia, it is setengah tujuh. Here, Saturday night is malam Sabtu but in Indonesia, it’s malam minggu. Another difference is the term used for staff or employees who are referred to as "karyawan" in Indonesia while we call them "kakitangan" in Malaysia. To Indonesians, "kakitangan" literally means arms and legs.
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