The company was established in 1993 as a partnership company with my partner Mr Singh however he is a silent partner. I have been managing the company since 1993 although this was originally indirect management and after 1999 I began directly managing the company on a day to day basis.

Today our original production facility in Tangerang is still in use and in 2001 we established a production facility in Yogjakarta. That facility was started with the long term vision that the Jakarta area will become increasingly expensive to do business and with garments being a low cost industry, we looked for a low cost location. Therefore we now have two production facilities and employ more that 4,000 people in Yogjakarta and 1,400 in Jakarta.

Our markets have predominently been the USA; previously this was 95% of our total exports but now it is around 80%. The second biggest market is the EU and less than 3% to Australia, Canada and other Asian countries. We are 100% export orientated and do not serve the local market.

This business is mainly OEM manufacturing whereby we present our designs to the buyers and the buyers submit their own designs to us and we see how we can meet their needs for production and pricing. To enter the local market it would involve creating our own brand and becoming in competition with our buyers which we are not prepared to do.

The strategy has been to work with the market leaders. In the USA there are five main players and we made our choice to work with HPI and we choose buyers that are specialists in their niche markets. We also had the opportunity to work with the department store JC Penney. We make sure that the buyers we work with do not overlap.

The first phase of the garment industry in Indonesia was in the 1970s with exports starting in 1976-1986. There were cash incentives for exports, businesses from Hong Kong took advantage of this and the industry developed to a decent size. In 1984-5 the incentives were withdrawn and the industry had to stand on its own feet. From 1986 or so it was another decade where the industry developed due to quotas. China fulfilled a lot of the demand from USA and Europe and Indonesia was working on quotas so it was a boom period with plenty of demand. After that, costs began to rise althrough it was still profitable. From 1996 it appeared every few years that the industry would disappear as wages rose in USD terms. During the Asian Crisis, with the devaluation of the Rupiah, the garment and textile industry once again became highly lucrative. From 1996-2006 revenues increased and there was promising growth in the industry. During this time many Korean companies came into Indonesia.

The third era began with the ending of all quotas and this is when competition really began. Indonesia’s garment manufacturers began to face competition with China head on and in the beginning it was feared that all the business would go to China but this fear was proved to be unfounded. In the last three years, costs in China have increased so the industry still has an optimistic future. Indonesia’s textile manufacturing industry has therefore had many ups and downs over the past three decades but mainly good periods of growth.

The pressures of time mean that you have to move to the higher end of the technology available to the industry or you will be left behind. In the garment industry cutting is crucial so we have moved into CAD for automatic fabric cutting. Our main plant in Yogjakarta has four autocutters. On the sewing machine side, the automation is marginal but we have implemented what there is available in the market. We have upgraded our machinery to those that offer greater energy efficiency and better technical quality.

We have installed various systems including STAGE which improves our efficiency for controlling production. Fast React is a further system which allows you to plan the factory as we have 110 lines in the factory which can each produce a different item so this allows us to plan effectively and has increased efficiency by 15%. On the design side we have also implemented tools for automatic patterns, markers and 3D planning tools which allow you to plan the pattern on a 3D dummy within the machine. This makes us more reactive to the market and able to offer faster solutions to our clients.

America is still the biggest consumer market for textiles and even though combined the European Union is equal in size; it is still a group of many different economies with varied tastes. Consumers in the USA are also more liberal and spend more compared to Europeans. Marketing is also much easier to do in the USA as the players are on a national scale which makes it easier in terms of quantities as well.

We began exporting to China through one of our American buyers and we can see that the potential is growing. China will therefore be only for the medium term as the country still has a lot of domestic lingerie and underwear production capacity and the difference in production cost is still marginal at around 10% whereas our products are only competitive at a 50% margin. We will also benefit as an Indonesian company from the ASEAN - China FTA.

In 2008 we took the decision to open a sister company in Bangladesh as a low cost production centre and it is doing well so far. This is to serve the middle to low income bracket in Bangladesh and the middle to upper market in Indonesia. In terms of other low cost countries for manufacturing, we are looking at Myanmar but not for the short term.

At present we import elements such as the foam cups from China and now we have begun manufacturing them ourselves. We will continue to produce other products of this type in the next two years for both the upstream and the downstream part of the production process. As a businessman I am always open to working with partners on such projects if there is mutual benefit to be had.

Indonesia is still a very attractive production base for anyone interested in the manufacturing industry. The availability of manpower and also the fact that the political environment is very friendly compared to other countries in the region make it a real opportunity.