Global Business Guide Indonesia

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Joint Ventures | Investment
Nyonya Meneer | Mr Charles Saerang
Mr Charles Saerang

Indonesia as a county has one of the highest levels of biodiversity with 30,000 different plant species

Mr Charles Saerang, President Director

Nyonya Meneer is a leading producer of jamu in Indonesia that has had considerable success reaching international markets. What can you tell us about your company’s background and its strategies going forward?

Our company was founded in 1919 by my grandmother, who used her expertise in cooking to develop our first traditional medicine products. At first, these medicines were primarily used within the family, but it was soon realised that they had the potential to be popular on a much wider scale. From these beginnings Nyonya Meneer has grown from a company that once employed only four people to now having four thousand employees and an active market presence in 18 countries. Taiwan is the number one destination for our jamu products, followed by Malaysia, Hong Kong, Singapore, Holland and Australia. We have also entered the US market, and have agents in Californian cities such as Los Angeles, San Francisco and San Diego. This requires compliance with strict food and drug regulations mandated by the FDA.

To facilitate our entry into key international markets, we have provided our products to other companies that use their local brand name to appeal to consumers. As an Indonesian manufacturer we still contend with the perception that our products do not adhere to food and drug regulations, which can make it difficult to obtain permission from regulatory agencies. Despite the fact that we offer the highest quality of natural medicines and jamu, our company often finds that we cannot sell our products under our own brand name in international markets even though you can find them sold under different brands that we supply instead.

Our focus now is on providing medical products to treat rheumatism; in keeping with the projection that Indonesia’s life expectancy will increase with our country’s continued economic development. We are also focused on offering medicines to protect individuals from diabetes, given the fact that some parts of Indonesia such as Central Java have experienced a substantial increase in the prevalence of this condition. In a similar vein, our company is also prioritising the manufacture of medicines that prevent high blood pressure, stimulate brain development or offer anti-oxidant properties.

What is your outlook for Indonesia’s jamu industry and are there any challenges that stand to impede its growth in the immediate future?

The future of the traditional medicine and jamu industry in Indonesia is bright, at present consumers here spend 3 trillion IDR on this type of product; a figure that jumps to 19 trillion IDR when you include other business areas that tap into Indonesian herbs such as spas and cosmetics. We expect that with the government’s support, the market for Indonesian herbal products could easily exceed 40 to 50 trillion IDR.

With that said, there are several issues faced by jamu manufacturers in Indonesia. The first and most apparent is that the industry is being negatively affected by the emergence of pharmaceutical companies that market their products as traditional jamu despite the fact that they add chemicals to the herbs to increase their potency. These added steroids mean that the jamu is no longer a natural product, and this has come at a cost to Indonesia’s reputation as a centre for natural medicines. We must also deal with the absence of regulation that would make it easier to improve upon our quality of jamu products, and this has significant consequences given that manufacturers in nearby markets are adequately supported by their government. With the implementation of the ASEAN One Market just around the corner, we stand to suffer from this problem as our competitors in South East Asia begin furthering their presence in Indonesia. To address these challenges, we hope to encourage the development of laws specific to Jamu that encompass the cultivation of raw materials until the sale of final products.

Where do you see the most potential for your products?

From a finished product perspective, we expect that the local market will have more potential as the understanding of jamu products is already very high and purchasing power is rising. 

In regards to semi-finished, or single compound, products such as ginger, export markets will be our main area of focus. India in particular is a strong market for this kind of product. China also presents interesting opportunities, as they produce traditional medicines different to those offered by Indonesian companies and largely sell either pure herbs or herbs mixed with chemicals.

Indonesian manufacturers on the international stage often struggle with a lack of country branding and the perception that goods produced are not of the highest quality. What steps have you taken to address this and promote Indonesia as a top quality producer of jamu?

Our strategy to change this misperception centres on using tourism. We designed our plantation in the style of a garden and encourage international visitors to gain a first-hand understanding of the techniques used to cultivate and harvest herbs that go into our jamu products. In addition to a host of tourist friendly amenities such as a café and educational programs for children, this plantation showcases 1,000 different species of plants and instils buyers with the knowledge that our materials come from a beautiful natural source that is in keeping with the ideals of a healthy lifestyle. Emphasising Indonesia’s beauty and biodiversity as key strengths is the way to better brand local manufacturers on a global stage.

How does your company plan to innovate and introduce new products to differentiate itself in Indonesia’s competitive jamu industry?

We recently began supplying spas with herbal products, as well as created Minyak Telon with mosquito repellent properties for Kimia Farma, one of Indonesia’s largest pharmaceutical companies. Our company has extensive experience pursuing similar kinds of innovation for other major Indonesian and multinational businesses.

The high profit venture of supplying spas with our products extends beyond Indonesia. We are already working with spas in Malaysia, and we hope to supply those in Thailand and the Philippines as well. In supplying each of these businesses, we strive to always use our own recipes to ensure product consistency.

Is Nyonya Meneer open to working with foreign companies and international investors looking for a well-established local partner in Indonesia?

Yes, we have already been approached by a major company based in the USA that would like to use our brand to reach out to the Indonesian consumer market. We are very much interested in cooperating with foreign entities capable of bringing in capital and investment to fund ventures that take advantage of our strong local brand presence. In working with international partners, we would like to form ties with those that can make available a comprehensive distribution network to further our ability to reach consumers across Indonesia. Technology is also of interest to us, as is working with firms that offer research and development skills.

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

Encouraging the use of jamu is to the benefit of health and wellbeing. If you want to enjoy good health and live naturally, use jamu. Indonesia as a country has one of the highest levels of biodiversity with 30,000 different plant species. At our company we use only 1,000 so you can imagine the scope for variety that still remains available to us as a manufacturer of jamu and herbal products in Indonesia.

Global Business Guide Indonesia - 2014

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