Global Business Guide Indonesia

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PT Sekar Lima Pratama | Mr Liliek Setiawan
Mr Liliek Setiawan

More support needs to be given to research programs seeking to find innovative solutions to increase the production of raw materials needed by local textile companies

Mr Liliek Setiawan, President Director

PT Sekar Lima Pratama has a long history in Indonesia as a leading textile manufacturer established in Solo. What more can you tell us about your company’s background and its main strategies going forward?

PT Sekar Lima Pratama has been in the market since 1977, starting as a small cloth trading firm before developing into an integrated textile manufacturer. We have established a strong position as an industry leader based on our commitment to providing the best; our company believes that if better is possible then good is not enough. We have thrived as a business in spite of two major economic crises due to our initiatives to work with small and medium enterprises that serve as the foundation of Indonesia’s economy. One of our main strategies is to take upon the role of foster company in cooperating with SMEs that do not have adequate access to capital or raw materials. This kind of working relationship allows us to grow with SMEs and enables us to support the continued development of Indonesia’s textile manufacturing industry.

We have also been focused on addressing the local industry’s dependence on imported raw materials – more than 95% of raw materials are sourced from abroad. In my capacity as Vice Chairman of the Indonesia Textile Association, it has been my goal to help the local textile industry develop the capability to fulfil its own raw material needs.

As Vice Chairman for the Indonesia Textile Association and President Director of a prominent local textile manufacturing company, what is your outlook for Indonesia’s textile industry?

Indonesia has enjoyed considerable success in manufacturing natural and synthetic fibres, having fulfilled orders worth $12.78 billion USD last year. As such, I do not agree with the assertion that the local textile industry is currently in the midst of a ‘sunset’ phase. Furthermore, textile manufacturing continues to play an important role as a labour-intensive industry that absorbs a significant portion of Indonesia’s human resources.

Central Java in particular continues to present promising opportunities for textile businesses, given its availability of cost-competitive land. Minimum wage in this province also compares favourably against other manufacturing hubs on the island of Java. I therefore expect the textile industry in Central Java to flourish going forward, as long as we overcome the challenge of finding the skilled labour needed to take full advantage of strong demand from a local market of more than 250 million people.

Much is expected of the new government to improve upon the business climate in Indonesia. What should the new administration prioritise in spurring the development of the textile industry?

The major problem faced by businesses in our line of work is the previously mentioned challenge of obtaining raw materials locally. Tackling this issue should be the country’s immediate priority through better coordination between the relevant ministries and research organizations. More support needs to be given to research programs seeking to find innovative solutions to increase the production of raw materials needed by local textile companies.

In addition to this, our industry would benefit from a clearer legal framework in which there is less overlap between central government regulations and regional government regulations. Last but not least, the new administration needs to focus on Indonesia’s well-known issue of inadequate infrastructure. Businesses in Central Java still need to contend with an inconsistent power supply, and this acts as a barrier to rapid growth.

This problem extends beyond the need to build new power plants; Indonesia also needs to improve upon the quality and coverage of its roads so as to lower logistics costs.

Where do you see the most potential for Sekar Lima Pratama’s products on the international stage?

We remain focused on our traditional export markets of the US, Europe and Japan. Indonesia’s textile manufacturing industry is currently able to meet 1.8% of global demand, and we should strive to increase this figure. Taking steps to provide clearer and more straightforward regulations will play a big part in this regard. Moreover, our export activity would have benefitted from a formal trade agreement between Indonesia and the US such as the Trans Pacific Partnership Agreement. Thus far, our country’s unwillingness to take part in this agreement has seen the local textile industry lose out to markets such as Vietnam, who despite not having an integrated textile industry has been able to take advantage of the TPP as a preferred supplier to the US.

On the other hand, we expect to benefit from the implementation of the ASEAN Economic Community as a mature company equipped to serve the region’s 650 million people.

What can you tell us about Sekar Lima Pratama’s plans to innovate as a means of furthering its manufacturing capabilities?

We have begun to manufacture more high-tech textile products such as geotextiles that are now being used by infrastructure development projects. To achieve the most from this, however, we need to further develop our technology and technical capabilities. We look forward to being able to build upon our know-how and expertise in this field.

How is Sekar Lima Pratama positioned towards working with international investors and foreign companies looking for an experienced local partner in Indonesia?

We are very open to any opportunities for joint ventures or investment from an overseas partner. Our company welcomes any cooperation that would expedite the expansion of our manufacturing capacity. In this regard, we are most interested in the transfer of know-how and opening new markets.

Prospective partners should know that it is my vision for this company to become more open to ensure its long-term growth and development. As the second generation in my family to have taken upon leadership of Sekar Lima Pratama, it is my goal for this company to continue to enjoy success for many generations to come.

As a final message, what would you like Global Business Guide’s readers to remember about Indonesia?

Indonesia is a very promising country at the moment and has been identified as one of the top five investment destinations for 2014-2018 by a United Nations Trade and Development Report. This is a clear sign that investors should have faith in Indonesia and make the most of opportunities to grow with us. I therefore encourage international parties to come and collaborate with Indonesian companies.

Global Business Guide Indonesia - 2015

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