Global Business Guide Indonesia

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Joint Ventures
Polowijo Gosari | Mr Didik Pribadi Arifin
Mr Didik Pribadi Arifin

Indonesia presents great opportunities for foreign companies looking for partners in this industry because we have a steady supply of raw materials and a market with growing demand for dolomite based products

Mr Didik Pribadi Arifin, President Director

Based in Gresik, East Java, Polowijo Gosari specialises in the production of fertilisers and minerals in addition to a host of different industries following the implementation of a diversification strategy. What can you tell us about your company’s background and its strategies going forward?

Our company was founded more than thirty years ago, and first focused on providing dolomite to be used in fertiliser products. When we first entered the market, the benefits of dolomite were largely unknown to buyers of fertiliser and as such we had to actively set about demonstrating its potential when applied to agricultural crops such as palm oil plantations. Dolomite is particularly useful in balancing the pH of soil and is now being used by many plantations as a secondary fertiliser to supplement the main NPK treatment. This was our focus for the first twenty five years, before we moved on to pursuing more value added products. These efforts have centred on using technology to add value to the magnesium we make available, and we have partnered with one of the biggest producers of dolomite from Belgium to develop a more advanced magnesium product to be marketed in Indonesia and South East Asia. The demand for minerals used in fertilisers in Indonesia is substantial and it is our goal to further our market share from the current 15-20% to upwards of 50% over the next five years.

What is your outlook for the fertiliser and mineral industries in Indonesia?

The government is now trying to increase the production of biodiesel, primarily made from palm oil. It is thus expected that demand for palm oil will rise considerably and to increase the yield of their plantations, palm oil companies will need to use dolomite. Based upon this and our expectation that a trend towards biofuels is likely to remain a priority over the next five to ten years; we have a positive outlook for the fertiliser and mineral industries going forward.

From an international perspective, which markets have the most potential for your products?

We are in midst of developing our dolomite calcination capabilities, which would allow us to use the mineral to supply the steel industry in addition to fertiliser manufacturers. In South East Asia, no company is currently able to carry out the dolomite calcination process and as such there is an opportunity for us to act as a main regional supplier of the resulting products. We are now carrying out feasibility studies to determine the extent to which we can offer this new product to both the steel and fertiliser industries in markets around the world. Based upon our research, we expect to be able to reach out to countries such as Malaysia, Thailand and Vietnam.

Within your industry, what do you think represents the biggest challenges to overcome?

As a private sector player, we have very little control over the supply of fertilisers to smallholders as these plantations tend to receive subsidised fertilisers from the government and state owned enterprises.

Because of this, it is difficult for us to educate these individuals on the benefits of using fertilisers to improve crop yields. Without the necessary training and education initiatives, the portion of the market made up of smallholders will not reach its potential as buyers of our industry’s products. With that said, much depends on government regulation as it is not presently feasible for the private sector to offer fertilisers and minerals at subsidised prices.

How does Polowijo Gosari plan to expand and pursue innovation?

As the second generation of leadership at our company, we have sought to build upon Polowijo’s foundation as a supplier of dolomite for fertilisers to find new applications for this mineral. Collaboration with educational institutions is one of the ways that we have set about discovering products that can be made from dolomite, a raw material found in abundance in Indonesia. Our innovations tend to be focused on replacing products that currently need to be imported into Indonesia, such as those made via dolomite calcination. There is also the potential for us to use our raw materials to manufacture magnesium ingots, which can be sold at $3000 USD per tonne.

How is your company positioned towards collaboration with foreign partners and international investors?

We are very open to this type of cooperation; in fact we currently have two plans in development for which we are looking for a partner. As previously mentioned, we have already begun communicating with a company based in Belgium to further our dolomite calcination capabilities, and we hope to initiate a joint venture with them by the end of this year in anticipation of making this new product available to the market by 2017. Indonesia presents great opportunities for foreign companies looking for partners in this industry, as we have a steady supply of raw materials as well as a market with growing demand for dolomite based products. For us, the key is working with companies interested in establishing manufacturing operations in Indonesia, as the advantages in natural resources, government support and labour make this the best place to set up. In light of the government’s recent move to curb the export of unprocessed mineral ores, we invite partners to work with us in using Indonesia’s raw materials to produce value added products.

As a final message, what would you like our readers to remember about Polowijo Gosari and Indonesia?

We are the owner of a dolomite mine and encourage parties interested in developing new applications for magnesium to approach us, because we believe that this market has room for us to further our standing as a leader and offer a wider range of products not yet available in Indonesia.

Global Business Guide Indonesia - 2014

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