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fter a short road trip to learn about China’s small and medium-sized enterprises (SMEs), Indonesian entrepreneurs have received a number of expressions of interest from Chinese businesses.

Nina Tursinah, deputy chairman of SMEs at Indonesian Employers Association (Apindo), said Chinese businesses had stated their interest in cooperating with Indonesian SMEs in the fields of food and beverages, garments, handicrafts and coconut shell charcoal.

“There are some demands from Chinese enterprises that will require follow-ups. But Indonesian SMEs alone will not be able to handle it all. We will need help from the government, banks and related enterprises,” Nina said on Monday, citing coconut shell charcoal as the product in the highest demand.

Lusi Efriani, a coconut charcoal entrepreneur who went to China as a representative of Apindo, said China Industry Investment (International) Co. Ltd. has asked for Indonesia to export 1 million tons of shell coconut charcoal per year and another 1 million tons of coconut shell active carbon per year.

“The demand will create at least 300,000 new jobs as there is currently only a limited production of coconut charcoal,” Lusi said, adding that her enterprise only has a capacity of 3,600 tons per year.

According to Lusi, 1 ton of shell coconut charcoal is worth around US$300, which equates to a $300-million-a-year industry for Indonesian SMEs.

The official agreement between the two countries, however, was delayed due to insufficient production levels.

“We would need to gather other SMEs to work together to make this possible. Therefore, we have asked for more time before finalizing the deal,” Nina said, adding that the Chinese company’s representatives will visit Indonesia to further discuss the deal next month.

The food and beverage sector also had some success, receiving requests of 37,200 tons tapioca starch per year from Chinese enterprises as well as orders for seaweed and snacks, according to Apindo’s food and beverage representative, Wahyu Handoko.

Ika Yarmanti, a handicraft entrepreneur, said there were three enterprises that have expressed their interest in Indonesian handicrafts and wood-based products.

The garment sector, a sector in which most entrepreneurs are pessimistic as China is Indonesia’s major competitor in garment production, also received positive signals from Chinese enterprises, as labor prices are increasing in the world’s most populous country.

Economists previously downgraded China’s economic outlook due to increasing labor costs, saying the cheap labor era in China “is about to end”.

“[The Chinese] offered Indonesian boutiques to open showrooms in China and work together with their tools and other resources,” said Dina Midiani, Apindo representative for garment sector.

Cooperation with Chinese SMEs, opens up huge potential for Indonesian businesses to develop according to Apindo chairman Sofjan Wanandi, who describes China as the “locomotive of the world’s economy”.

“SMEs are crucial here in Indonesia because they equalize the economic growth that has been managed by the government,” Sofjan said.

The Indonesian SME entrepreneurs’ visit to China was supported by Apindo, the Indonesian Chamber of Commerce and Industry, Indonesia Business Association of Shanghai, and Centre for Strategic and International Studies (CSIS).

Vice chairman of CSIS board of trustees Jusuf Wanandi said small and medium-sized businesses needed to be supported as help from the government is limited. (est)