Current economic conditions in Europe are encouraging European companies to focus on exports for expanding their market to other countries.
Entering The Indonesian Market
Indonesia has become an expansion destination thanks to its constant economic growth and large population. The same strategy applies to companies from Portugal, in reaction to current conditions in that country’s domestic market. A business delegation from Porto, in the northern part of Portugal, conducted a business mission to Jakarta, Indonesia October 16th-18th, 2013, coordinated by AEP, a Portuguese Chamber of Commerce, Expandia, a market expansion consulting from Portugal, and Cekindo, as the market entry consulting in Indonesia.
There are five participating companies from Portugal, the majority from the building material industry, such as sanitary ware, door hardware, door manufacturers, cork composite, natural marble and granite, and one company from the oil and gas industry, particularly gas installation systems. Each company had a meeting with nine Indonesian companies connected with their sector. For building materials, the majority of Indonesian companies were distributors of specific building materials, supermarkets of building materials, and direct customers such as hotels. For the gas installation company, we focused on Indonesian companies connected with the oil and gas industries.
The business delegation had the opportunity to have dinner at the Portuguese Ambassador’s residence and was received directly by Mr. Joaquim Moreira de Lemos. We integrated a small networking event by inviting top management from one of the largest conglomerates in Indonesia, involved in the development and real estate, as well as energy and infrastructure.
Mr. Lemos emphasized that currently, Portuguese companies are increasing their interest in entering the Indonesian market. They realized that Indonesia is a huge potential market, into which not many Portuguese companies have tapped. This was related to the unfavorable relationship between Portugal and Indonesia in 1975 connected with East Timor. However, that was resolved in 1999, after East Timor got independence (now becomes Timor Leste).
The Director of AEP, Mrs. Maria Helena Ramos, said that besides expanding to Indonesia, Portugal also welcomes Indonesian investors to invest in Portugal. Currently the biggest investors in Portugal are from Angola and China. One of the incentives for foreign investors is that they will be entitled to obtain permanent residence in Portugal, which covers the European Union area, if they invest a minimum of EUR 500,000 in Portugal.
Ms. Nurmia Agustina, the principal consultant at Cekindo, a market entry consulting firm in Indonesia, is convinced that this initiative from Portugal to enter Indonesian market is a proper step in seeking opportunities outside of the domestic market. The development and construction sectors in Indonesia grew 6.4% in the first half of 2011 with a total US$41.8 billion, representing 10% of GDP and making the industry one of the largest contributors to the national economy.
Cekindo regularly arranges business missions for government institutions and chambers of commerce to help them successfully make business visits with significant results.
Feel free to contact us for a free quotation on developing a business plan for Indonesia.