Global Business Guide Indonesia

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Joint Ventures
OSO Group | Mr Mariano Asril
Mr Mariano Asril

The risks of investing here are falling in line with the strengthening of our economy, and I expect that post 2014 we will see an acceleration of this growth

Mr Mariano Asril , Chief Executive Officer

PT Citra Putra Mandiri, also known as OSO Group, is a holding company with subsidiaries in several key sectors in Indonesia. What can you tell us about the company’s background and its strategies going forward?

Our company was founded by Mr Oesman Sapta Odang in the early 2000s. We were primarily involved in the property sector as building hotels is one of our founder’s passions. The group owns several properties including the ‘Five Star Plus’ Stones Hotel operated by Marriot in Legian, Bali. We are now in the process of establishing our presence across the country in areas such as Kalimantan, Jakarta and Bali to achieve further growth. We also have subsidiaries in a host of different sectors ranging from transportation, mining, agribusiness and financial services.

To move into the transportation industry, we charter aircraft to private companies and institutions and are also one of the leading ground handling service providers in Bali, which has the third busiest airport in Indonesia. In mining we own and manage one of the largest granite quarries in Asia, and export the majority of this material to Singapore. It is our goal to increase the production capability of this quarry to support local consumption as well. We also have a bauxite mine in Kalimantan. Our agribusiness activity is largely focused on CPO plantations, also located in Kalimantan. Finally, we provide financial services such as securities and asset management through the subsidiary OSO Securities.

Given your involvement in the aforementioned sectors, which industries do you think hold the most potential?

The manufacturing sector is one of the more attractive areas of business in this country due to the recent government initiatives and regulations to promote the production of finished products. In mining, for example, I expect that the recent ban on unprocessed mineral ore will hurt Indonesia in the short term but will ultimately have a positive outcome for the economy by encouraging businesses to pursue value added processing. This sector is therefore one that we have identified as a key investment area for the medium term. With that said, more needs to be done by the government in regards to infrastructure to create an environment that supports this type of business activity.

In addition to mining, our group is currently most focused on our operations in the property and agribusiness sector and in the short term expects that the former will be the most lucrative because Indonesian property prices have risen significantly over the last five years. From a more long term perspective, we believe that agriculture has the most potential as it goes with the growing trend towards ‘green’ business.

Aside from a lack of infrastructure, what are the main challenges faced by businesses in Indonesia?

More government support is needed to increase awareness amongst the Indonesian people about the public benefits of making land available for projects such as road construction.

Indonesia’s network of roads is growing at a pace of less than 2% a year and much of this is because of land owners’ unwillingness to sell property. The government needs to provide guarantees to the business community that it can facilitate straightforward land acquisition and thus reduce risk. It is my view that the most recent land acquisition law and implementing regulations do not provide enough assurance to businesses and investors.

What can you tell us about your company’s international expansion strategy? Moreover, how is OSO Group positioned towards cooperation with foreign partners?

We plan to focus on the domestic market in the immediate future as Indonesia has huge potential that needs to be explored and realised. With that said, we are attracting interest from companies abroad to carry out joint ventures in Indonesia and have initiated some projects that are currently ongoing. We are working towards developing a large oil infrastructure project in Batam with the Azerbaijani state oil company. We are waiting for the presidential election to take place prior to moving on to the next stage of this proposed project so as to avoid uncertainty.

We are also inviting investors from the U.S. and Europe for joint ventures in the quarry business. Our group is most interested in working with partners for technology transfers in mining, agribusiness and energy. It is important that foreign parties recognise that in looking for potential partners we prioritise strengths in strategic values and industry related skills such as implementing strict mining safety standards and advanced management systems.

Within the context of the recent opening of airport management to foreign investors by the government; are you interested in working with foreign companies in this industry?

We are open to cooperation and encourage partnerships between local companies and foreign investors in airport management. Changi Airport in Singapore, already one of the best in the world, recently initiated a joint venture with foreign investors from Qatar, and Indonesia should follow suit in taking this approach to improve its airport services and make it easier to travel in the country.

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

Indonesia is an emerging market that has good opportunities for investors. The government is working hard to facilitate the entry of foreign investors and there are many local companies ready to cooperate with foreign partners. The risks of investing here are falling in line with the strengthening of our economy, and I expect that post 2014 we will see an acceleration of this growth. We therefore encourage foreign entities to come and invest in Indonesia.

Global Business Guide Indonesia - 2014

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