Events

Trade Mission to Jakarta & Surabaya jointly organised by Branding Association of Malaysia & Malaysia External Trade Development Corporation (MATRADE) from 15^th to 20^th May 2016.

1. Introduction

The MATRADE export acceleration mission delegation is the first initiative whereby MATRADE has worked with a business association in a public-private tie-up, and Branding Association of Malaysia is acting as its first partner in this respect.

There were a total of 22 members from 14 companies in the delegation, representing a wide range of industries such as education, beauty & fashion, F&B, technology, media, photography, manufacturing, real estate development, forklift parts and recreational facilities.

2. Objectives of the mission to Jakarta & Surabaya:

Exploring new business opportunities in Indonesia especially in Jakarta & Surabaya

Better understanding of regulatory requirements in markets

Identify, build and foster new connections and partnerships

Meet local distributors, importers and potential investment partners

Develop skills and experience in international markets

Enhance international profiles by entering new markets

3. Malaysian Delegation

3.1 Name list of Participants – Appendix I

3.2 Details of Delegates – Appendix II

4. Mission Programme

4.1 Itinerary

4.2 Business Matching Sessions

i) 2 sessions :

 16^th May, 2016 @ 12:30 – 15:00

Business Networking Luncheon with Indonesian Diaspora & Local Business People at Millennium Sirih Hotel

17^th May, 2016 @ 14:30 – 15:30

Business Matching with Members of BKPM

ii) Details of Attendees – Appendix III

iii) Pictures – Appendix IV

4.3 Other Meetings & Visits

Objectives: Exploring new business opportunities and better understanding of regulatory requirements in markets

i) Courtesy call & Meeting with Mr Dony Edward, Director General of Trade, Ministry of Trade of the Republic of Indonesia

ii) Courtesy call & Meeting with Mr Harris Iskandar, Director General of Early Childhood, Non-Formal and Informal Education, Ministry of Education and Culture of the Republic of Indonesia.

iii) Courtesy call & Meeting with Mr Pratito Soeharyo, Director of Business Empowerment, Investment Coordinating Board (BKPM) of the Republic of Indonesia

iv) Courtesy visit to Mr Lili Soleh Wartadipradja, Chairman of East Java Chamber of Commerce & Industry (KADIN East Java) & Dr. Ir. Jamhadi, Chairman of Surabaya Chamber of Commerce and Industry

v) Courtesy visit to Dr. Ir. Jamhadi, Chairman of Surabaya Chamber of Commerce and Industry

5. Mission Outcomes

5.1   Potential Sales

• Textiles market
• Telecommunication’s chips
• Beverages
• F&B – potential to open up new outlets
• To open up centres for short courses & learning centres
• 3D Technology
• Hair dresser services & products

5.2   General comments by Malaysia Exporters

• Indonesia is not a country generally perceived as one that is easy to do business with.
• One of the best ways to do business in Indonesia is to help Indonesians sell their products whilst also selling them our products.
• Doing business in East Java is more cost-effective than in other provinces of Indonesia. 

5.3   Challenges faced by Malaysia Exporters

• Indonesia had required some sectors to have mandatory local partners although others were fully open to foreign investors.
• Malaysians, if keen to do business in Indonesia, should handle all the procedures personally - as much as possible.  This includes meeting the person-in-charge at government departments, and seeing the provincial governor and village chief.
• Indonesia has three different tiers of approval system. While there is not much problem at the central and provincial levels, it is the tertiary level - the local authorities and bureaucracy - which often hinder further advances.

6. Conclusion

Although Indonesia is not a country generally perceived as one which is easy to do business with, Indonesia had taken proactive steps to improve its business environment.  It hopes by doing so that it will eventually make it to the list of top 40 most business-friendly countries in World Bank's ‘Ease of Doing Business’ ranking by the year 2019.  Among the 189 countries worldwide, Indonesia was ranked 109th in terms of ease of doing business last year, whilst Malaysia was ranked 18th, behind Singapore, Hong Kong and Taiwan in the region.

In April, the Investment Coordinating Board of Indonesia (BKPM) revealed that based on World Bank's ten parameters to gauge a country's ease of doing business, after the government had introduced a number of business-friendly policies, the country's ranking would have leapt to 53rd.

The Indonesian authorities put in a lot of effort to facilitate business in the country, but it would take the government quite some time before the objectives could eventually be achieved.

Indonesia used to be behind Malaysia in this regard, but this mission showed conclusively that the country has overtaken Malaysia in the way that its people think.  Indonesians aspire to achieve greater levels of transparency while the administrative efficiency of the country's investment board is on par with those of developed countries.

The transformation of the country is currently at its peak and this is the best time to venture into the vast Indonesian market.

Indonesia is an emerging market and when the government liberalises its policies and foreigners throng into the country, their first destination will invariably be Jakarta. Competition is very stiff in Jakarta, although the competitive market in Surabaya is far less challenging.

However, those Malaysians interested in expanding their businesses to Indonesia first have to seek a reliable local partner in order to exploit the Indonesian market.  If they have not found a suitable partner there, they shouldn't rush into Indonesia. Local partners have a decisive influence on the success of a Malaysian business in Indonesia, thus it is of critical importance that Malaysian businesses position themselves carefully, so that they are perceived as friends and partners, not rivals.

File Download

· MATRADE_MDG Guideline 2016