Budi Makmur Jayamurni was founded in Yogyakarta in 1966 by my parents; I am the second generation of my family to be involved in this business. The choice of location in Yogyakarta was because the city has been one of the centres of Indonesia’s leather industry other than Garut in West Java and Magetan in East Java. For that reason, the business environment was already favourable with the labour and the expertise readily available. To be able to recruit skilled workers is especially important because leather manufacturing is not very much a technology-oriented industry as it is a labour-intensive one. We also saw it as an opportunity to explore the material as goats and sheep were in abundance at the time. Until then, no one had really understood the potential value of their skin.

Over the course of our company’s history, a pivotal moment occurred in the 1980s when the Indonesian government introduced a ban on exporting leather in its raw state, requiring it to be processed first. Even half-finished products were prohibited and a 25-30% export duty was imposed as a deterrent. The situation made it impossible to maintain our output in half-processed stage; that is why we established a division that currently produces gloves and garments.

In anticipating the future of the market, we have found that buyers are increasingly in demand of environmentally-friendly products. This is particularly evident in Europe. Furthermore, certain buyers, especially the bigger brands, now require a company to pass an audit and certification process in order to be able to supply to them. We believe that the future practice within the industry is headed in that direction, thus our present priority is to develop the capacity to comply. If we fail to meet their standards, only the low-end market will be open to us.

In the past several years, we have had certain concerns related to the availability of raw material. What had occurred in Indonesia is that the economic downturn led to people consuming less meat on average, especially red meat. Even when meat was consumed, chicken meat was preferred over beef or goat meat. This affected the supply of leather as the byproduct and subsequently forced us to diversify the source of our raw material to the Middle East, and later on, Europe. Our import continued for a number of months to compensate for the shortage. Being a Muslim country, of course, there are certain months in every year where the supply are plentiful, namely during the Eid al-Adha season. This served as the relief.

The leather hides and skins industry is under the authority of the Ministry of Industry and we have seen many improvements regarding the interaction between the government and the industry. The difficulties we encountered were actually related to regulations that are not under this ministry’s control.

For example, the raw material is under the authority of the Ministry of Agriculture. These ministries often do not communicate well or failed to operate in support of each other, causing problems for us. That said, the Coordinating Minister for Economic Affairs’ office has been involved in resolving this, much to our gratitude, but it required the industry to file a report.

Indonesia may soon be welcoming the return of shoe factories from China due to the unfavourable conditions in that country. When those manufacturers eventually move back, Budi Makmur Jayamurni is well-prepared to become a supplier to the footwear industry as Indonesia is already among the world’s major exporters of footwear. Furthermore, we have a big advantage in supplying raw material to other shoe-producing countries in the region, such as Vietnam. The sports gloves industry which is centred in Central Java and Yogyakarta is also a potentially lucrative business seeing that approximately 70% of golf gloves that go into the US market come from Indonesia. In terms of Indonesia’s main competitors for the global leather market, India and Pakistan are top contenders, while the only other major leather industry within ASEAN is in Thailand and to a significantly lesser size, the Philippines.

Budi Makmur Jayamurni is open to international cooperation and sees the prospect as an opportunity to broaden our scope as well as our business network. We are particularly interested in finding a partner looking to invest in capital or facilitate us in opening new markets. Our company is committed to a culture of professionalism and is already ISO-certified. Budi Makmur Jayamurni has also proven time and again to be a firm that stays ahead of its time. When the Indonesian government had yet required leather manufacturers to have a waste water treatment facility, which did not happen until the 1990s, we built our own in the 1970s. Our company has also obtained a number of industry certificates that are not yet necessary but foreseen to become compulsory in the future.

Foreign investors may encounter initial difficulties regarding the regulations in Indonesia. It also requires some risk-taking and patience to develop a business in Indonesia, but 250 million prospective consumers is certainly worth the effort. Budi Makmur Jayamurni itself is a company seeking to promote Indonesian leather to the world. We are striving to revive Indonesia’s glowing reputation in the 1960s and the 1970s when the quality of our leather products was well-known throughout the globe.