Global Business Guide Indonesia

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Investment | Technology Transfer
PT Pos Indonesia (Persero) | Mr Gilarsi Wahyu Setijono
Mr Gilarsi Wahyu Setijono

Indonesia is undeniably facing a challenge with logistics costs accounting for 24-27% of GDP. Reducing this level even just by 1% would save Indonesia 100 trillion IDR. We can only think of how many kilometres of railways or how many seaports we can build with that fund.

Mr Gilarsi Wahyu Setijono, President Director

PT Pos Indonesia is a leading provider of postal services in Indonesia with a long history dating back to 1746. What more can you tell us about your company?

Postal services have undergone quite a transformation in recent times brought upon by a changing business landscape. With the emergence of the internet and digital communication technology, the old postal world as we know it has met its day’s end except, perhaps, for certain activities such as philately as a hobby. Indeed, technology has replaced most of its original functionalities. In looking at specific types of postal services, I can predict that the demand for mail delivery services will barely exist over time. On the other hand, the demand for parcel delivery services should become even stronger in the foreseeable future given the rapid rise of e-commerce. Consumers are increasingly drawn to utilising this shopping method for sheer convenience. This is further supported by the fact that the sector still has a low market penetration level. Its continued growth will create more room for our business to expand.

Another service PT Pos Indonesia has been providing is money transfer. Nowadays, however, it is losing relevance and facing direct competition from banks as they are increasingly present even in villages. Nonetheless, we still acknowledge the enormous potential regarding rural areas. For example, using our extensive network of post offices and postmen, the government through us will be able to access people in remote regions devoid of banks. The government simply needs to empower us in this regard. Conclusively, with the understanding that the back-end of e-commerce activities in Indonesia inevitably requires logistics management experts, we see the need to develop our capacity in catering to the demand for parcel delivery services, logistics services, and to a certain extent, financial services.

PT Pos Indonesia ultimately occupies a significant role in resolving Indonesia’s high logistics costs; a condition which has led to steep price disparities between different regions in the country. Additionally, we can also serve as the backbone in mapping Indonesia’s logistics needs. For example, our reach across far-flung regions of the country allows us to support activities such as economic data surveys. In fact, we recently signed an MoU with the Central Bureau of Statistics regarding this.

President Joko Widodo has launched numerous policies aimed at accelerating infrastructure development in Indonesia. From your perspective at the helm of PT Pos Indonesia, what should be the government’s priorities?

Indonesia is undeniably facing a challenge with logistics costs accounting for 24-27% of GDP. Reducing this level even just by 1% would save Indonesia 100 trillion IDR. We can only think of how many kilometres of railways or how many seaports we can build with that fund. On top of this, it also shows that even a tiny improvement matters a lot. Lessening the cost will enable the government to invest more in the country’s development.

On a similar note, Indonesia presently has more than 100 state-owned enterprises, many of which have been building their logistics capabilities exclusively. This spells inefficiency when companies such as Kereta Api Logistik, Garuda Indonesia, Pelindo, as well as state-owned fertiliser and cement manufacturers all heavily invest in the same function. As a result, asset utilisation is considerably low compared to the potential if they were combined in a consolidated capacity.

There lies the challenge; to consolidate and create synergy between state-owned enterprises and encourage them to think as one single big entity.

What are PT Pos Indonesia’s strategies in strengthening its competitive advantages over companies in the same line of business?

We plan to further leverage our presence in rural areas which is where 25% of Indonesia’s economy is located. In fact, PT Pos Indonesia is already stronger there than in urban areas. To stay ahead, we must build our excellence in a few chosen areas that really matters. For instance, enhancing our logistics services is not merely about quicker delivery, but it is also about certainty. As one of the keys to a successful operation, certainty encompasses security, quality and speed. Another key is technology. The availability of the right technology also helps provide customers with a sense of security. One example is the tracking feature of our parcel delivery services which facilitates consumers in checking the whereabouts of their goods at any given time. The third key is cost as the determining factor in staying competitive.

Regional integration in Southeast Asia has commenced with the inauguration of the ASEAN Economic Community on 31st December 2015. What opportunities do you see will become available for Indonesian companies?

At the moment, Indonesia is still being perceived only as a market by other ASEAN countries; especially considering half of the region’s population resides in Indonesia. Furthermore, our country is not among the least-cost suppliers, that must be stated. However, with some effort, it is viable for Indonesia to establish itself as a supplier of goods to all ASEAN countries. One particular sector in Indonesia worth highlighting is the creative economy. The government is pushing for this sector’s development and Indonesia certainly has ample human capital to utilise. The rest comes down to our packaging, branding and marketing strategy.

Foreign investors have been quite active in Indonesia in recent years. How is PT Pos Indonesia positioned towards working with international counterparts?

PT Pos Indonesia is open to partnering with foreign investors. Furthermore, technology transfer, acquiring know-how and capital investment are all opportunities we are keen on. We as a company have accumulated vast knowledge of Indonesia drawing upon our nationwide coverage from the city of Sabang on the northwestern tip of Indonesia, to the easternmost Indonesian city of Merauke in Papua; as well as from the Talaud Islands in North Sulawesi to the Rote Islands in East Nusa Tenggara.

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

Like President Joko Widodo, PT Pos Indonesia is investor-friendly. Overall, we are open to any form of collaboration, so any interest is relevant to us. We welcome our international partners to knock on our door or call our phone; to engage in constructive discussions and forge mutually beneficial relationships.

Global Business Guide Indonesia - 2016

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