W

hile local players find it hard to boost exports to non-traditional markets, a few Indonesian companies have successfully tightened their grip on overseas markets, particularly in Africa, through direct investment.

Publicly listed pharmaceutical firm PT Kalbe Farma, one of these successful companies, has set up production facilities in Nigeria and South Africa.

Kalbe, which started its African venture seven years ago, now runs its own plant in Nigeria. In South Africa, the company produces drugs at a plant owned by its local partner.

'€œWe saw a positive business outlook in Africa, which served as a good trading basis for Kalbe with its robust sales. In the past, Africa was one of our important export destinations, which contributed highly to our sales,'€ said the firm'€™s finance director and corporate secretary, Vidjongtius.

Currently, Kalbe'€™s over-the-counter medicines, like Mixagrip and Woods, were very popular in Nigeria and South Africa, with each brand being among the dominant ones in both markets, according to Vidjongtius.

He said that in contrast to the common perception about Africa, the firm had not faced significant obstacles in building its business on the continent, adding that all issues, including security, were '€œmanageable'€.

'€œThe African market will always be promising. It offers good business opportunities because the economies are growing, just like Indonesia. Therefore, consumer needs also expand along with economic growth,'€ he added.

Another Indonesian firm that is doing well in Africa is PT Sayap Mas Utama (Wings Group), which operates under a local unit, Eko Supreme Resources Nigeria Ltd.

Wings first entered Nigeria by introducing its famous detergent, So Klin, in 1994 and established its first plant in 2007.

Initially, Wings'€™ decision to build the plant was driven by the Nigerian government'€™s ban on imports, primarily to attract investment.

'€œAs Nigeria was one of our main export destinations, the ruling had a great impact on our business; so we made that move. During the establishment of the plant, we could still sell our products at the courtesy of the government,'€ said Chris Johanda, Wings'€™ area marketing manager for its international business division.

Having made steady progress, Wings now runs two factories '€“ one detergent plant and one soap plant '€“ producing So Klin concentrated detergent, Good Mama detergent and Nuvo medicated soap.

Operating local plants has allowed Wings to further penetrate the market of more than 150 million people, competing tightly not only with Nigerian firms but also multinational firms, like Unilever, P&G and Cussons.

At present, Wings held up to 50 percent of market share in the country for its cleaning products, according to Chris.

'€œEnsuring supply continuity is really important for us, as consumers can easily shift to other products if we do not adequately meet demand,'€ Chris said.

Wings was currently preparing for further expansion in Nigeria and other parts of Africa, to benefit from the tremendous opportunities in the region, he added.

Unlike Kalbe and Wings, which have been successful through their sales of goods, PT Tirta Ayu Spa has entered the African market offering services, particularly in the field of women'€™s health.

The firm, which first arrived in Cameroon a few years ago, opened a spa in Douala via a franchise on the basis of a profit-sharing arrangement with a local firm in Yaounde. The franchise cost US$100,000.

'€œWhile competition in our domestic market was becoming increasingly tight, I saw tremendous opportunities in Africa. Women in Africa are now beginning to realize the need for health and beauty given their greater purchasing power due to economic growth,'€ said Lenywati, the firm'€™s founder and owner.