Global Business Guide Indonesia

Agriculture in Indonesia Agriculture in Indonesia Agriculture in Indonesia Agriculture in Indonesia Agriculture in Indonesia
Joint Ventures | Export
Agrindo Maju Lestari | Mr Henry Haryanto
Mr Henry Haryanto

With a population of 250 million people that is set to increase by a further 90 million people by 2030, Indonesia has to focus on its food security and prioritise its food self-sufficiency program

Mr Henry Haryanto, Director & CEO

Established in 1995, Agrindo Maju Lestari is a leading manufacturer of agricultural equipment. Please present the company to the GBG Indonesia audience as well as elaborate upon its current strategies.

We started as a family business focused on agricultural equipment such as power sprayers, hand sprayers, brush cutters and jet cleaners. We are now an industry leader with approximately 60% market share in Indonesia. Around 90% of our sales are for the domestic market and we cater to customers all over Indonesia with two dealers in most cities. The remaining 10% of our products are exported to international markets. So far we have exported throughout South East Asia in countries such as Myanmar and Cambodia as well as South America and parts of Africa including Nigeria and Kenya.

Our vision is to become a leading and reliable supplier of agricultural equipment for the international market. Our mission is to continuously improve in terms of HR and quality control as well as provide value added products.

What is your current outlook for the agriculture sector in Indonesia?

Indonesia is becoming one of the most dynamic players in the region and the demand for agricultural products is growing in line with economic development. With a population of 250 million people that is set to increase by a further 90 million people by 2030, Indonesia has to focus on its food security and prioritise its food self-sufficiency program in order to provide for this growing population. Our goal is to improve food self-sufficiency as part of the Indonesian government’s millennium development goals.

With that said, the country faces many challenges. For example, 50% of the irrigation systems in Indonesia’s agricultural cultivation areas are not working properly. There is also high pressure on land resources as small hold farmers sell their land to property developers. The young population is also migrating to cities as opposed to working in the agricultural sector.The Indonesian government therefore needs to focus on infrastructure such as irrigation, improving land productivity as well as concentrating on stabilising the price for agricultural commodities.

Within agricultural equipment Indonesia is facing stiff competition from markets such as China, India, Korea and Thailand as they are strong in terms of quality, price and delivery. As an agricultural equipment manufacturer we must therefore focus on our quality and obtain international certifications. 

Having already exported your products to a host of different countries, what are Agrindo Maju Lestari’s current target markets abroad and in what regions do you hope to expand into in the future?

With 90% of our market focused on the local market, we are looking to branch out to further international markets. We have been approached by the USA who has seen the quality of our products so we are currently working on this. Our other target markets are in Latin America, Africa, the ASEAN such as Vietnam as well as Europe.

Different countries have different cultures; countries such as Vietnam are more stringent on price. Europeans are more stringent on quality and certifications whereas in the USA they are more particular on the pricing as well as marketing. 

African markets are more concentrated on the gifts and promotional items that accompany the products. Therefore we must approach each market differently.

In order to export our products abroad we have secured our ISO certification as well as OHSAS environmental management certifications in addition to being the first in our sector to have the Indonesian National Standard. With the support of the Ministry of Industry and Ministry of Agriculture we are promoting our products to both the local market and international market through workshops and exhibitions. At these exhibitions we have seen that farmers from all over the world have welcomed our products. In addition we are working with IPB (Institut Pertanian Bogor) for research into the use of agricultural equipment for farmers and plantation owners such as in sugarcane.

What new products and innovations will Agrindo Maju Lestari introduce to the market?

We recently introduced several new products. The Bengawan Solo 15 litre knapsack hand sprayer is well known among farmers in Indonesia for its durability and quality. It is mainly used for pest control or for weed killer and can be used in gardens, yards, small orchards and golf courses. It is made from HDPE, which makes it lightweight as well as long lasting. The Sanchin Power Sprayer is used to spray water in fruit orchards while the Tasco Brush Cutter is for clearing grass and brushes.

For the future we are planning to introduce a motorized mist blower and a battery operated hand sprayer due to the tendency of this sector to require motorised products. This is already taking place in Vietnam and Thailand so when Indonesian farmers have greater purchasing power we believe this product will be successful. In order to make the price affordable we are looking to establish a joint venture for battery manufacturing in Indonesia as we have seen the weakness in existing products has been in the battery.

How is the company positioned towards working with foreign companies and partners?

We are open to any opportunities especially in supply chain management, distribution management and good manufacturing processes. We have already received enquiries from Japan as well as Malaysia. They are interested in investing but the challenge they see is in infrastructure and bureaucracy; two areas that the Indonesian government is looking to improve. What we would be most interested in is expertise as opposed to capital as we want to learn from companies overseas that have experience in the aforementioned fields.

What would you like our readers to remember about Indonesia as a final message?

Indonesia will soon be part of an ASEAN Economic Community that will comprise of 600 million people. There are thus considerable opportunities to tap into this market and so foreign companies would need to be focused on this potential. Indonesia has a very important role to play in this as a trading partner and potential partners must visit Indonesia to truly understand what makes this country so dynamic.

Global Business Guide Indonesia - 2014

icone share