Global Business Guide Indonesia

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Joint Venture | Investment | Technology Transfer
Pudak Scientific | Mr Zaenal Arief
Mr Zaenal Arief

Most of the potential in Indonesia’s market for educational equipment is still in primary education, because it is these schools that require the most support

Mr Zaenal Arief, President Director

Founded in 1978, Pudak Scientific is a leading manufacturer of educational aids and laboratory equipment in Indonesia. Having also had success in international markets, what can you tell us about your company’s history and its main strategies going forward?

Pudak Scientific is a family owned business, established by my father. I joined the company in 1992, followed by my brothers in the years that followed. It was our goal to further our standing as a professional company, and we thus focused on ensuring high levels of quality to differentiate ourselves from competitors in Indonesia’s education and laboratory equipment industry. Many companies in our field at this time sought to attract customers with the lure of lower prices but as such compromised quality. Educational institutions soon began to recognize that the lower price equipment was not durable and in fact placed a burden on their budgets over the long-term. This created new demand for our superior offerings in educational aids and lab equipment, and has seen us achieve rapid growth.

What is your outlook for the educational equipment manufacturing market in Indonesia?

An encouraging development in the local market is the implementation of regulations requiring the government to spend 20% of its budget on education. This means that the next budget should allocate up to 400 trillion IDR to education, a huge amount relative to past years. Assuming that only 10% of this education budget is used towards the purchase of new equipment, the market for our products should grow and because of this I have a positive outlook for the future.

Pudak Scientific caters to a wide array of customers, ranging from primary schools to polytechnic institutions. For the future, where do you see the most potential in terms of demand for your products?

Most of the potential in Indonesia’s market for educational equipment is still in primary education, because it is these schools that require the most support. In Indonesia we have 125,000 primary schools, 100,000 secondary schools and about 70,000 high schools. In-depth market research suggests that even when we have supplied our products to the vast majority of the many primary schools, such is the sheer amount of schools that there will continue to be opportunities to provide new models as well as replace existing equipment.    

Your company has already enjoyed success in reaching out internationally to markets in Asia and the Middle East. What can you tell us about your priorities in regards to exports and international markets?

Exports currently account for 10-15% of our annual production and we are focused on covering markets in Asia because they typically require the same level of quality as products manufactured for Indonesian consumers. This is particularly true for clients in Malaysia and Vietnam.

Our products have also been provided to educational institutions in Myanmar and Thailand, but in the case of the latter we have to compete with manufacturers based in China. Markets beyond the ASEAN are presently less attractive as they are already saturated with educational aids and laboratory equipment from their respective domestic manufacturers.

How is your product line evolving and what products in particular are you seeing demand for?

At present, our products for higher education are mainly designed for polytechnic institutions such as technical training equipment. Our product portfolio does not currently include equipment for universities, which tend to be served by companies based in Europe and the USA. These companies manufacture advanced equipment such as spectral photometers for universities around the world. If we were to make this type of university-level equipment, we would need to make thousands of them to achieve economies of scale but there are not enough universities in Indonesia for demand to reach that level.

To keep up to date with the latest trends within our field and ensure that we adapt to new customer needs, our company works closely with universities in Indonesia, particularly teacher’s universities that produce the country’s next generation of educators. We also collaborate with LIPI, Indonesia’s foremost science and research organisation.

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

We are currently working with a partner from Japan through a joint venture to establish glassware manufacturing operations in Indonesia. We are open to cooperation with foreign companies to pursue joint venture opportunities and are also open to investment. In working with overseas entities we are particularly interested in technology transfers and can offer the advantages of lower production costs to potential partners.

Companies looking for a local partner in Indonesia should take note of the importance of a shared corporate culture and vision. At Pudak Scientific it is our priority to pay close attention to the quality of products we manufacture, and it has been our goal since establishment to produce superior quality educational aids and laboratory equipment.

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

We encourage Global Business Guide Indonesia’s readers to come to Indonesia and invest here to make the most of the country’s many opportunities.

Global Business Guide Indonesia - 2015

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