FROM USD10 MILLION TO ~USD10 BILLION OVER 40 YEARS

Indonesia 2018 | INDUSTRY | VIP INTERVIEW

TBY talks to Sri Prakash Lohia, Group Chairman of Indorama, on the company's growth, differences between Southeast Asia and Africa, and CAPEX for new projects.

What do you consider to be Indorama's main achievements?

The Group has grown from USD10 million to almost USD10 billion over the last 40 years. We are extremely proud of our history and our origins in Indonesia. The people of this country and company are the ones who make the real difference. We employ over 10,000 people in Indonesia and over 30,000 people worldwide. Indonesia is where it all began for us. This is a great country and one that supports industry. We are a large producer and exporter of products. To produce industrial goods, a company needs great people. We have continuous production and we export to almost 80 countries around the world. We are competitive, and a great deal of the competitiveness derives from our relationship with Indonesia.

How would you compare the ease of doing business between Southeast Asia and Africa, where you have operations?

We operate in most countries according to the local market situation and the strength of its exports. Every country has a different philosophy. Manufacturing is manufacturing; a company has to produce goods at the lowest cost. It must have its customers' trust. There are specific issues to each country. In Nigeria, for example, we have a power plant that generates electricity because the local supply is unreliable. Indonesia, on the other hand, has a strong grid and we are pleased with the infrastructure available to us here. We also have some power plants to support our activities here, though in general infrastructure is first class. This lowers costs for us.

How has demand for your products evolved in the last few years?

Demand for our products is growing worldwide. It has grown around 5-10% YoY over the last 40 years. Our growth is in line with the GDP plus a little extra. The local market is also growing. Our plastics business are growing particularly well as they are used for basic consumer goods. Fibers for textiles are also strong. Fertilizers are doing well, and demand is growing around the world. Many of our Indonesian products are export oriented.

What are the strategies that allow foreign companies to succeed in Indonesia?

Indonesia is a transparent place, and people welcome foreigners. This is a great advantage. They want foreigners to come and succeed. We are pleased to have had a great relationship with our Indonesian counterparts for the last 40 years. The quality of the people and the community has truly been one of the secrets to our success. In some places, manpower is an issue; however, in Indonesia it is a strength. The most important thing is to have people produce high quality products while not messing around; if productivity is great, companies will be profitable. The Indonesian workforce is well trained. We recently built a world class engineering polytechnic principally the underpriviliged children of our local community as well as of our Indonesian employees, which is heavily subsidised by our Group as well as our partners. We currently have 240 students and this allows us to give something back to society. We want to improve skills of these students, create knowledge and illustrate how grateful we are.

What are your investment and development plans?

We have a large CAPEX for new projects as well as to upgrade our existing operations. We need to continuously upgrade and replace our plant and machinery . We must have faith in the country and the business and must continue to invest. We always reinvest our earnings in the business , which is why our product is of such high quality and why our people are so pleased. We want to keep costs down while improving production and efficiency.

As a businessman, what legacy would you like to leave in Indonesia?

Our legacy is demonstrating that those from other countries have succeeded while believing in and supporting local culture and people. This is a free country and anyone can succeed in business. Hard work is the key to success in this country. The national infrastructure and government structure are also key, and they have been supportive. We are a public company; however, our family is the majority shareholder. The most important thing is to run a family company like any other corporation. We must have rapid decision-making, hard workers, and a focus on lowering costs. A company also needs to have a long-term focus. It needs great financial management and people should trust the company. Both its employees and banks should trust the company.

How do you expect the company and the economy to change over the next year?

We hope the Jakarta Metro will start operations in 2018. We also hope all the infrastructure projects in the country will be further along, which will put a smile on our faces. Traveling in this country can take a long time and we hope to see this improving. We have an overburdened system, though this is the price one pays for industrialization.