Interview with Mr Texin Sirait of Prakindo Group, Indonesia

Joint Ventures

Prakindo Group | Mr Texin Sirait

Should a company with new technology in water treatment wish to come into the market, we can work together in adapting the technology to Indonesia Mr Texin Sirait, President Director
What was the vision and background to the founding of Prakindo Group as a key player in Indonesia’s waste water treatment sector? We entered the waste water treatment business due to our experience in the sector. The Indonesian government has been concerned about the environment since the 1970s but it was still difficult to develop awareness on how to maintain the environment and prevent further damage. We faced a challenge when we began due to the business situation and the lack of attention being given to the environment. In 2003 we came together and looked at the market to see how we could make a contribution to the environment. Water resources are key; in the 1970s people did not buy bottled water as water sources were all high quality. Now people always buy bottled water and there is a high demand for drinking water but the sources are not available. Waste water is not treated properly and the population is continuing to grow making the situation worse. At the end of the 1990s the government began to push businesses to be more environmentally friendly in industries as well as offices, hospitals and schools. Therefore waste water is an area that we saw we could build our business in and make a difference. Our services allow us to provide clean waste water that can be discharged to the river and used for drinking which improves the environment as well as the quality of life for the local society. What can you tell us about your current client base and projects? Many of our clients are private sector customers in the real estate industry as well as hospitals. We also focus our portfolio on the government and public sector projects however obtaining these projects can be challenging. We therefore try to balance between the public sector, private sector and industries. Most recently we have begun to target the oil and gas sector and we will aim to take on more of these types of projects in the future. What new innovations and products are currently being developed and explored by the company? One of our products is a water treatment product using aerobic reactions. We have also produced a water treatment product for producing clean water which is widely used by the government and we have moved into membrane technology. We are always pushing our employees to keep innovating and to explore new ideas.	New technologies are of interest to us and new products are being developed every day for environmental sustainability, and we must be open to them. Should a company with new technology in water treatment wish to come into the market, we can work together in adapting the technology to Indonesia. For the next stage of the company’s plan, we are looking for technology that uses waste as an efficient energy source. This technology can be applied in Indonesia as the country produces a lot of organic waste. We have done a pilot project to convert organic waste to compost, from this we can produce gas which can then be used for energy. Solar power and wind power is another area of interest for us. Given the need for waste water treatment plants throughout South East Asia, does the company plan to expand to the regional market? We have started expanding regionally already; I have already visited Cambodia and Vietnam to assess the businesses there. However, the Indonesian market is very large and offers many opportunities due to the Millennium Development Goals which required 60 billion RP in investment. What we really need is investors coming in to support us financially so that we can take on larger scale projects. We already have the team and human resources to take on such projects. We are open to partnerships but of course we would need to study offers carefully as the size of the company is very important. When dealing with a foreign partner we would need to look at a company of 10 million to 15 million USD at least, as less than this would not be interesting for us. We are currently negotiating with a state owned company to work together as well. What should people remember about Prakindo Group and Indonesia as a final message? Now is a good time to invest in Indonesia as the country offers so many opportunities for the construction of infrastructure for waste water treatment. We can work together with investors on waste water treatment projects whereby the water is sold back to the government, which pays back the investment. We can build, operate and maintain the project with the financial support of an investor as we already have the links with the local government. This is a good opportunity for foreign investors as it offers considerable long term payback prospects.

Should a company with new technology in water treatment wish to come into the market, we can work together in adapting the technology to Indonesia

Mr Texin Sirait, President Director

What was the vision and background to the founding of Prakindo Group as a key player in Indonesia’s waste water treatment sector?

We entered the waste water treatment business due to our experience in the sector. The Indonesian government has been concerned about the environment since the 1970s but it was still difficult to develop awareness on how to maintain the environment and prevent further damage. We faced a challenge when we began due to the business situation and the lack of attention being given to the environment. In 2003 we came together and looked at the market to see how we could make a contribution to the environment. Water resources are key; in the 1970s people did not buy bottled water as water sources were all high quality. Now people always buy bottled water and there is a high demand for drinking water but the sources are not available. Waste water is not treated properly and the population is continuing to grow making the situation worse.

At the end of the 1990s the government began to push businesses to be more environmentally friendly in industries as well as offices, hospitals and schools. Therefore waste water is an area that we saw we could build our business in and make a difference. Our services allow us to provide clean waste water that can be discharged to the river and used for drinking which improves the environment as well as the quality of life for the local society.

What can you tell us about your current client base and projects?

Many of our clients are private sector customers in the real estate industry as well as hospitals. We also focus our portfolio on the government and public sector projects however obtaining these projects can be challenging. We therefore try to balance between the public sector, private sector and industries. Most recently we have begun to target the oil and gas sector and we will aim to take on more of these types of projects in the future.

What new innovations and products are currently being developed and explored by the company?

One of our products is a water treatment product using aerobic reactions. We have also produced a water treatment product for producing clean water which is widely used by the government and we have moved into membrane technology. We are always pushing our employees to keep innovating and to explore new ideas.

New technologies are of interest to us and new products are being developed every day for environmental sustainability, and we must be open to them. Should a company with new technology in water treatment wish to come into the market, we can work together in adapting the technology to Indonesia. For the next stage of the company’s plan, we are looking for technology that uses waste as an efficient energy source. This technology can be applied in Indonesia as the country produces a lot of organic waste. We have done a pilot project to convert organic waste to compost, from this we can produce gas which can then be used for energy. Solar power and wind power is another area of interest for us.

Given the need for waste water treatment plants throughout South East Asia, does the company plan to expand to the regional market?

We have started expanding regionally already; I have already visited Cambodia and Vietnam to assess the businesses there. However, the Indonesian market is very large and offers many opportunities due to the Millennium Development Goals which required 60 billion RP in investment. What we really need is investors coming in to support us financially so that we can take on larger scale projects. We already have the team and human resources to take on such projects.

We are open to partnerships but of course we would need to study offers carefully as the size of the company is very important. When dealing with a foreign partner we would need to look at a company of 10 million to 15 million USD at least, as less than this would not be interesting for us. We are currently negotiating with a state owned company to work together as well.

What should people remember about Prakindo Group and Indonesia as a final message?

Now is a good time to invest in Indonesia as the country offers so many opportunities for the construction of infrastructure for waste water treatment. We can work together with investors on waste water treatment projects whereby the water is sold back to the government, which pays back the investment. We can build, operate and maintain the project with the financial support of an investor as we already have the links with the local government. This is a good opportunity for foreign investors as it offers considerable long term payback prospects.

Global Business Guide Indonesia - 2014