Our company was first established in Medan, North Sumatra as a small home-based business with only two carpenters producing wooden furniture. We were first focused on serving the local market, which offered many opportunities to businesses in our industry. However, the rise of greater competition in Indonesia in the mid-1980s encouraged us to also look for new markets overseas. Our primary export destinations at that time were widespread, including the Middle East, Taiwan, Japan, Malaysia, Singapore, Europe and Australia. We continue to serve several of these markets, and also began exporting to the USA. From this foundation, our company has grown substantially and now has 500 employees and multiple major clients.

In more recent years, macro factors such as the 2008 financial crisis has seen us shift our focus once again away from some of our longstanding export destinations towards markets such as China. For this country we mainly export raw materials, tapping into the availability of rubberwood in North Sumatra, and have formed strong ties to partners based in China.

As a company with considerable expertise in the manufacture of furniture, we are able to produce ‘A’ to ‘B’ grade goods. This positions us within a subset of the Indonesian furniture industry that does not have as many competitors, because many local companies here are focused more on ‘C’ grade furniture and below to cater to the middle-low segment of the population. Because of this, when speaking about competition, we are more focused on the selection of Indonesian companies also able to produce high quality products for export markets, in addition to competitors on the regional scale.

Western markets such as Europe and North America have yet to fully recover from the financial crisis, and this has led to us pushing further into China as well as Malaysia for our raw materials. 50% of our operations are dedicated to this type of activity, whereas only 20% is allocated to the export of finished products with the remaining 30% for the local market. Our decision to prioritise China and Malaysia as key markets was motivated by the rising cost of labour in these countries, which makes it more costly to run timber factories.

Manufacturers there have moved towards focusing on processes such as assembling and finishing, and therefore require timber from other sources such as our company.

Our company is set to initiate a new strategy that involves a more active approach to acquiring raw materials by purchasing plantation lots from the government. We would then make use of our integrated skill set to create semi-finished products intended for export. Our company currently has 22 saw mills, and has plans to increase this to 50 as part of a move to increase production capacity.

We are open to this type of cooperation, and are most interested in working with prospective partners based in China, due to the size of this market. In regards to collaborating with companies looking to enter Indonesia through joint ventures, we also welcome international entities to approach us. We have in the past worked with Chinese partners in the form of technology transfer for new machinery as well as investment, and are open to pursuing this kind of opportunity going forward.

Laws in Indonesia governing sustainable sourcing practices are now very tough, with strict checks at multiple stages of the production and export process. The introduction of a Timber Legality Verification System (SLVK) in 2013 is the primary reason behind the stricter requirements such as audits and inspections every three months, and this bodes well for our products on the global stage.

It is our hope that platforms such as Global Business Guide will help our company reach out to buyers around the world interested in sourcing high quality wood and wooden furniture.