Japanese SMEs seek more information, wider access to enter Indonesian market
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SOME 2,000 Japanese companies are currently operating in Indonesia, but entrepreneurs lack information about the country.
Indonesia’s sheer market size continues to attract foreign players wanting to try their luck, including small and medium-sized enterprises from Japan.
Japanese businessman Tsubasa Hoshino is eager to expand his business to Indonesia. He currently runs information-technology company Kek Rack System Co in Kawasaki prefecture.
Hoshino said he wanted to know more about Indonesia’s IT-systems market, which companies need solutions for their technological problems, and what computer programs his company could offer to the country’s businesspeople.
Despite his excitement, Hoshino acknowledged that establishing a new business in Indonesia, which is one of Japan’s main trading partners, would not be as easy as falling off a log.
Professional workforce availability and competition with other bigger Japanese companies that have already set foot in the country are among his concerns because his company is considered an SME in Japan.
Ken Rack System was among five SMEs from Kawasaki that were invited by |Small and Medium Enterprises Japan (SMEJ) and private lender Maybank Indonesia on Monday to introduce themselves to potential business partners in Indonesia, including Japanese buyer and supplier companies that operate in the country, as well as Indonesian supplier companies.
Yasunobu Shiraishi, chairman of SMEJ, an organisation that acquaints Japanese SMEs with Indonesia, backed Hoshino’s concerns.
He said SMEs from Asia’s second-largest economy still found it hard to venture into Indonesia because of the lack of thorough information on both the possibilities and challenges for their business ventures.
SMEJ notes that there are at least three things that will play a key role for Japanese SMEs in their business-venture decisions: general information on production costs, the availability of a workforce that can help grow their business, and information related to financial backing.
SMEJ data show that there are around 2,000 Japanese companies operating in Indonesia, 90 per cent of which are SMEs in several industrial sectors such as manufacturing and home appliances.
However, Japanese SMEs’ efforts may not bear fruit any time soon because the Indonesian government has stated that local SMEs are among its top development priorities, as they account for more than 90 per cent of the domestic workforce.
It has issued several economic stimulus packages, some of which contain incentives for SMEs, including affordable-financing schemes and ease in licensing procedures.
Shiraishi said SMEJ had been cooperating with the Association of Indonesian Employers (Apindo) and the Indonesian Chamber of Commerce and Industry (Kadin) for several years to gather more information on doing business in Indonesia.
Data from the Investment Coordinating Board (BKPM) reveal that realised investments from Japan stood at US$2.9 billion, the second-highest, during the first half of this year. In terms of trade, Japan was listed as Indonesia’s No 3 export destination, with exports worth $821.6 million in July, as well as No 2 for Indonesia’s imports, with a value of $913.1 million.
Meanwhile, Maybank’s head of international strategic business, Nancy Novita Helen, said the event, which was also organised by the Japan External Trade Organisation (Jetro), had served as a way for new business players from Japan to establish networks in Indonesia.
“Oftentimes SMEs from Japan know little regarding Indonesia from their fellow Japanese companies in Indonesia. Hopefully this event will create new business opportunities as we try to acquaint them with our customers.”
