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Jakarta Post

Executive column: Honeywell to focus on aviation, smart building technology

Roy Kosasih (Antara)Honeywell Indonesia, the local unit of diversified conglomerate Honeywell International Inc

The Jakarta Post
Mon, March 25, 2019

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Executive column: Honeywell to focus on aviation, smart building technology

Roy Kosasih (Antara)

Honeywell Indonesia, the local unit of diversified conglomerate Honeywell International Inc., is redirecting its focus from the oil and gas sector to aviation and smart building technology following a shortfall in Indonesia’s energy-related investments last year. Indonesia’s investment in the energy sector last year only reached 86 percent of the government’s US$37.2 billion target, prompting the Energy and Mineral Resources Ministry to set a lower target of $33.34 billion for this year. Honeywell’s readjusted focus will pit it against other global brands in aviation and building technology. How is the company preparing its strategy to take on the competition? The Jakarta Post’s Norman Harsono talked to Honeywell Indonesia president director Roy Kosasih during a media visit in Shanghai, China, to discuss the issue. Below is an excerpt of the interview.

Question: Why did Honeywell decide to focus on aviation and building technologies?

Answer: We saw that the aviation industry in ASEAN had the second-fastest growth in Asia Pacific after China. Indonesia, through Lion Air and Wings Air, just ordered 250 planes around two years ago while Vietnam Airlines ordered 100 airplanes just the other day. This is a fast growing industry because of the growth of the middle class, who enjoy traveling and can easily do so with low-cost budget airlines.

We have observed a similar rapid growth in the property sector in Indonesia and Malaysia, so we will naturally move our business to these fast growing sectors.

We know that the Indonesian government has plans to either upgrade or construct refineries, such as with the one in Tuban [East Java] and Balikpapan [East Kalimantan]. But until these refineries are completed, we will focus our business elsewhere.

How will Honeywell differentiate itself in approaching these two new markets?

So, connectivity is the jargon that we are implementing. It differentiates us from our competitors.

In the aviation industry, we offer auxiliary power units [APUs], avionics, black boxes, wheels and brakes but, to stay ahead of the game, we also have a breakthrough initiative such as connected aircraft technology.

We also see business potential in connected buildings, where we implement the Internet of Things to create smart offices like the new Honeywell building in Shanghai.

How much did each of Honeywell Indonesia’s divisions contribute to its revenue last year?

Aviation and energy were similar, let’s say 30 percent each, while building technologies were 25 percent and safety and productivity solutions were 15 percent.

Personally, I want to see these four sectors having equal contribution to revenue because they are equally important.

Honeywell already has an 80 percent share of Indonesia’s auxiliary power unit market, but what is the company’s current position in the building technology area?

There are two under-construction skyscrapers — one in Kuningan and another in Thamrin — that will be the first two buildings in Jakarta to implement our Integrated Building Management System, which connects everything from fire alarms, lighting, air conditioning to security.

Our technology will also be installed in a 76-story building, which will be the tallest building in Indonesia until [property firm] the Agung Sedayu Group builds its Signature Tower in Jakarta.

Outside of Jakarta, the absorption is still very slow because building automation demands high capital expenditure, whereas most of the premium buildings are located in the capital.

Surabaya is the next city that is most likely to use our technology but even it will only have one or two buildings with our technology.

How will Honeywell promote connectivity given the limitations of poor internet infrastructure in Indonesia?

We know that 5G will drive our business and Huawei is leading 5G connectivity in Indonesia; so we’ve teamed up with Huawei — even at global level. They have the largest internet infrastructure, so we work with them to get faster internet and communication.

The Indonesian government has been repeatedly calling on technology companies to build local human resources. What is your investment portion in that area?

We invest in education. We sponsored a mini-refinery lab at the Bandung Institute of Technology (ITB), a mock-up smart building at the University of Indonesia and a software development lab at Gadjah Mada University in Yogyakarta.

The ITB had between 103 and 110 electrical engineering graduates who used our laboratory last year, while the other two universities have not yet revealed their numbers.

Our long-term objective is to create employees for the future. We want to have people who are familiar with the connected industry and therefore, we start with the universities.

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