Global Business Guide Indonesia

Property in Indonesia Property in Indonesia Property in Indonesia Property in Indonesia Property in Indonesia
Joint Ventures | Export
Cisangkan | Mr Tjetjep Hartono
Mr Tjetjep Hartono

Indonesia is an especially interesting investment opportunity right now as the Indonesian government wants to build a lot of housing and infrastructure

Mr Tjetjep Hartono, President Director

Since being founded in 1975 focused on concrete construction materials such as roofing tiles, how has Cisangkan evolved and adapted to meet the needs of Indonesia’s property and construction sector?

As of around four years ago we have seen the property market in Indonesia expand rapidly and so our company has invested in new machinery to increase our production volume, particularly in the manufacturing of concrete blocks. We now have machinery from Germany that has doubled our volume, allowing us to meet the doubling of market demand that has taken place over the last two years. The decision to buy this machine was made after taking into consideration future demand and the need for new land and a larger production area.

We have another company in the group which faces the same challenge of having too small a capacity to meet market demand in Indonesia. The growth in Indonesia is very fast paced and so we must prioritise our products for existing customers.

Over the past year we have also increased the number of machines used not only for the production of roof tiles but also for other concrete products for the Indonesian market.

Having already obtained international certifications such as ISO 9001, how is the company positioning itself for the global export market?

As of two years ago, we already began exporting to Japan as well as to New Zealand and Australia. We plan to target further international markets in the future but the problem is finding a good partner in the markets that we want to work in. We also need to gain experience in the market to understand the regulations and business practices in each country. Every market has its own codes of business, for example we typically abide by British standards of production but sometimes German standards or Japanese standards are required and so specialist knowledge is required to comply.

The transport costs for concrete tiles are also high which adds to the cost considerably. This is not the case, however, for lightweight concrete, which makes its export potential very interesting. We have already exported this product to the Caribbean where Indonesian products are still competitively priced despite the transport costs.

Given the booming demand for property in Indonesia, what is your future outlook for the sector?

For the property sector, there is a huge demand for real housing as many people live in temporary housing structures in Indonesia.

In Bandung, there is a high demand for landed houses as land prices are still cheap but in the next ten years I predict that it will rise thereby raising demand for the same sort of multi-storey buildings that are increasingly popular in Jakarta.

You mentioned the company’s interest in working with local partners in your target export markets; for further expansion in Indonesia how is the company positioned towards working with international partners looking to enter the Indonesian market?

We are very interested in working with construction material companies looking to enter Indonesia. Cisangkan already has over 30 retail branches across Indonesia in cities such as Medan and Palembang. Due to high transport costs, we have been told by some of our distributors that it is more competitive to produce locally such as in Bali and so this is an area of opportunity for the construction of new production centres that are needed to compete in key growing commercial centres in Indonesia. We are already in discussions to purchase a piece of land in Boyolali, an area between Surabaya and Bali, for production.

Cisangkan is already an established brand in Indonesia which makes us attractive for investors and we have already been approached by international companies to enter the market with us. The issue is whether the company is serious about entering the market or not; if the contact is serious then we can work together.

What should our audience remember about the company and Indonesia as a final thought?

Indonesia is an especially interesting investment opportunity right now as the Indonesian government wants to build a lot of housing and infrastructure. Infrastructure in Indonesia is very weak at the moment and the government recognises this as an issue not only for Jakarta but for other cities too such as Bandung. There is a real need for roads, an MRT and waste water treatment plants. The Ministry of Public Works has planned many investment opportunities, with proposed spending expected to exceed 150 trillion RP and so this is a major opportunity for us and the construction materials sector in Indonesia.

Cisangkan is an ideal partner as we have good branding and a wide distribution and retail network across Indonesia; factors that ensure that we would enjoy mutual growth with future partners.

Global Business Guide Indonesia - 2014

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