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Lorena Group | Ms Eka Sari Lorena Surbakti
Ms Eka Sari Lorena Surbakti

It is important to remember that many parts of Indonesia do not have access to airstrips and emerging markets exist beyond Java in areas that still rely heavily on road transport

Ms Eka Sari Lorena Surbakti, President Director

Lorena Group is a well-established player in Indonesia’s logistics and public transportation industries. Having recently conducted an IPO for your subsidiary in transportation, what more can you tell us about your company’s background and its main strategies going forward?

We are very focused on public transportation services for passengers as well as distribution and logistics services for goods. Within Lorena Group we thus have two distinct groups operating in these lines of business, including one geared towards inter-city and inter-state passenger transport providing urban transportation, chartered rental and feeders. Our strategy in becoming an industry leader is centred on a prudent approach in which we seek to build upon our existing strengths and expertise of the local market. This is in line with our background as a company that was first established in 1970 as a provider of commuter bus services from Bogor to Jakarta. We expanded from this foundation of only two buses to then move into inter-province routes, and our recently-listed subsidiary Eka Sari Lorena Transport Tbk currently serves 52 destinations, giving us one of the largest coverage networks in Southeast Asia. We moved into logistics 18 years ago, in response to the needs of our customers who used our bus services to transport goods, and already have representatives in 584 places spanning the archipelago from Sabang to Merauke. It is our vision for the future to achieve better collaboration between our two divisions, so as to best cater to passengers who wish to travel on our buses while simultaneously using our logistics services to transport their goods.

As the first inter-city/inter-state bus service provider in Indonesia to go public, we face new challenges such as the perception that we must contend with airlines. In this regard, it is important to remember that many parts of Indonesia do not have access to airstrips and emerging markets exist beyond Java in areas that still rely heavily on road transport.

As Chairwoman of the Organization of Land Transportation Owners (Organda), what is your outlook for the future development of Indonesia’s transportation sector taking into consideration factors such as the recent fuel price hike and inadequacies in infrastructure?

We have a lot of expectations for the new president, given that the biggest challenge to our industry is the lack of proper infrastructure development. Looking at the state budget, we can see that the amount of funding being allocated to this is still not sufficient. Moreover, the arrangements for PPP projects are still not clear. We are thus very interested to see how the new administration tackles these issues, and Organda has been very active in proposing several programmes to expedite the development of infrastructure for transportation. Among these programmes is the proposed privatisation of terminals to better equip them to serve the market through improved facilities and a greater emphasis on ensuring the safety of female passengers. Many of today’s leaders in Indonesia’s transportation industry have been in the business for a long time but have international experience from time spent working and studying abroad, and as such are open to implementing new ideas and novel concepts to facilitate continued development.

In adapting to the priorities of President Joko Widodo’s government, we have also taken steps to work with various port organisations to improve upon connectivity and anticipate plans to further develop maritime facilities. At Organda, we understand that it is necessary to do more than just be a spectator and we hope to contribute to progress even if the new administration is to first focus on sea transportation.

Lorena Group has recently been featured by the media on the topic of your plans to increase the company's fleet of buses. From an innovation point of view, what else can you tell us about your strategy to introduce new services and/or implement new technologies for the future?

To better analyse the performance of a given area, our buses are already equipped with a comprehensive e-ticket system. Using this data, we are able to analyse and make quick decisions related to expanding our fleet, which in turn helps us meet customer needs. IT thus plays a crucial role in our group’s fleet management strategy and I am a big believer in pursuing innovation in this field. We are now working with prominent local convenience store chains to make our e-tickets available through their outlets. This plan of action would expand our reach beyond our own offices and agents to create easy access to our transportation services.

Lorena Group has increased its number of subsidiaries substantially under your management. Based on this strategy, where else will you diversify going forward?

At the moment, we are involved in chartered cargo and freighters by air. We work with airlines with the means to transport goods but without the network to fill their flights. Ground companies such as ourselves are thus very important in tapping into an extensive network on behalf of air cargo companies, and we are currently in the process of deciding whether to further our involvement in this industry. Our company is particularly interested in looking into opportunities to have our own freighters to transport goods to Indonesia’s eastern islands, where demand and the price of goods are very high.

How is your company positioned towards collaboration with international investors and foreign companies looking for an experienced local partner in Indonesia?

Lorena Group is expanding quickly, and we would like to more intensively carry out plans in the air cargo and sea transportation industries. Right now, we are still analysing as to whether we are capable of managing this expansion, and in this regard our company is open-minded when it comes to working with other partners. The listing of one of our subsidiaries was in part motivated by the understanding that we can achieve faster growth by involving entities outside of the group, and we have considerable experience in working with other companies in the form of joint operations.

Given our current positioning, we are amenable to working with prospective partners that can bring in capital as well as know-how. The type of collaboration we carry out depends upon the size of the project. Potential partners should know that it is our vision as a group to become a major player on the regional stage, with plans to enter other ASEAN markets once we have covered Indonesia in its entirety.

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

Indonesia is a very lucrative market and to succeed here I encourage interested entities and investors to take the time to gather information and find a strong local partner. I am a big believer in collaboration with experienced local companies as an effective means for foreign businesses to enter Indonesia.

Global Business Guide Indonesia - 2015

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