Global Business Guide Indonesia

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Joint Ventures | Export
Tirta Marta | Mr Tandio Sugianto
Mr Tandio Sugianto

As a manufacturing company that has focused on R&D, we have been able to demonstrate how much potential there is in Indonesia

Mr Tandio Sugianto, President Director

What was the background to the founding of Tirta Marta and what are the current strategies being followed to expand the company further?

My father in law established our packaging manufacturing company in the 1970s as a family business. We continue to concentrate on the packaging industry, which has a lot of potential in Indonesia as the fourth largest country by population in the world. The Indonesian plastic market is very interesting as consumers use a large volume of plastic packaging individually but the market penetration is still low and as such there is room for significant growth.

In 1995, I expanded the company and we grew by 2-3,000% through the introduction of an improved business structure as well as investment in innovation. Our expansion strategy was focused on research and development as I could see the trend of greater environmental consciousness and the rising number of campaigns to reduce plastic consumption. We thus began producing biodegradable shopping bags as they are universally used. However due to the increasingly wide availability of biodegradable plastics, companies like ours must invest in technology, research and development to continue to improve our product and establish a strong market position. Now that we have had success in Indonesia with our eco-friendly packaging products, we are targeting similar success in other regional and international markets.

What are your future plans for further international exports?

We are still quite new to the field of entering international markets, but have already expanded our export network to ten countries in a very short amount of time. We believe that we are only scratching the surface so far in terms of applications as well as market coverage. The world consumes 275 million MET of plastic every year and there are millions of applications which means there is so much more to be done.

What further innovations in the plastic and packaging sector can we expect to see from Tirta Marta in the future?

Our R&D division is driven to respond to market trends, and I expect that we will further our penetration into the industry by adapting our eco-friendly products to the many applications for plastic. It is our job to carry out innovation that will allow us to substitute existing plastic in the market with new and improved biodegradable plastic.

Our commitment to innovation is also motivated by the fact that despite having many natural resources and the potential for year round agricultural activity, most tropical countries are still poor. This has never sat well with me and I believe it is because of the lack of R&D to add value to natural resources. Without value added activity it can be difficult to create new jobs and move the economy forward. The Indonesian government is now starting to emphasise this to push domestic companies to pursue value added processes.

What is your outlook for the plastic and packaging sector both in Indonesia and the global market?

Indonesia’s modern retail sector is actually still small at only 20% of the market compared to the traditional market. As part of the modern sector, packaging for food is thus a luxury item and so there is still a lot of market to capture for flexible packaging and shopping bags.

There is a trend around the world to reduce plastic consumption and plastic shopping bags consumed at supermarkets by adding a fee per use. However what I see is that even if you reduce shopping bag consumption, people still require garbage bags for use at home. Garbage bags are actually thicker than shopping bags so I foresee that plastic consumption will increase as opposed to decrease. The policy is therefore somewhat short sighted.

How is the company positioned towards working with international partners in the plastic industry for new opportunities and forming joint ventures?

We are very open to working with foreign investors looking to enter the plastic sector in Indonesia. We have been in the business for 40 years and we know the plastic and packaging market of Indonesia well. Now that we have the technology, we can introduce it to other markets. What we would be interested in are partners in international markets to introduce our technology. Research and development is very costly and we cannot do it alone. In the past, we worked with a venture capital firm from Europe and are targeting similar types of cooperation going forward.

Capital is not the most important aspect for us but rather we are looking for synergies, added value and skills that complement our own strengths. The value system of how we can do business together in terms of vision and mission is the most important element for me. Money has not been our main objective; we are focused on creating high quality products and strive to offer good services, as the financial rewards will follow if you achieve these goals.

What is your final message to potential investors and partners looking at opportunities in the Indonesian market?

Indonesia has a lot to offer as a country rich in natural resources. As a manufacturing company that has focused on R&D, we have been able to demonstrate how much potential there is in Indonesia. Our plastic is produced from tapioca whereas other plastics use corn which as a staple food disrupts the food chain. Tapioca also creates jobs and therefore has a far reaching social impact and so our goal is to bring this to the entire tropical region.

Global Business Guide Indonesia - 2014

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