Entrepreneur of the Month : Ms. Linda Lau
Starting this year, InachamHK presents “Entrepreneur of the Month” where we will share insights from at least one of our members about his/her Indonesian business ventures. This month, we have Ms. Linda Lau, Director of PT. Ying Fat Hong Indonesia Plastic Manufactory and Managing Director of Guangzhou Tianshi Plastic Material Ltd.
從今年開始，香港印尼商會將舉辦「月度最佳企業家」活動，我們將與至少一位商會會員分享他/她的印尼企業。這個月，我們請到了 劉惠盈女士，她是PT·Ying Fat Hong Indonesia Plastic Manufactory的董事以及Guangzhou Tianshi Plastic Material Ltd的董事總經理。
What kind of business do you do in Indonesia?
We are a plastic material manufacturer dedicated in producing polymer material such as flexible polyvinyl chloride compounds, rigid polyvinyl chloride compounds and thermoelastic rubber compounds for nearly 40 years. We also process several types of remodified plastics. With our headquarter in Hong Kong and production plant in Guangzhou, China and new production capacity in Serang, Indonesia.
Operating a traditional manufacturing business in China has been increasingly difficult and unsustainable in the recent decade, therefore Indonesia was an attractive alternative for us when we set up our operation in 2012.
Firstly, many of my downstream customers are located in Indonesia, due to the relatively efficient, young and lower-cost labour. As a semi-automatic factory, we are not too dependent on cheap labour, however being close to manufacturing customers in toys, shoes, aquarium facilities help us gain an edge over our competitors.
Secondly, Indonesia is a blue ocean for my business, as I recently became the first local supplier for one of my customers that has set up their factory in the 1990s, and for the past 30 years they did not purchase locally because there were no local supplies. This is in stark contrast with China, where oversupply and price war is the norm for manufacturing businesses.
Thirdly ,even though I was born and raised in Hong Kong, I am part of a fifth-generation Indonesian Chinese family. Their involvement in various industries, from Toyota’s car component tier-one supplier, injection moulding factory, to education, agricultural, aviation, etc. is a valuable resource and provides potential opportunities for our growth.
What are the challenges?
First and foremost the iconically traffic jam, which has been a problem for both its citizens and corporates. Most of our staff are working in the factory area, while our marketing and engineering teams need to visit our clients and suppliers regularly. If the traffic is smooth, they can visit up to three or more companies a day, but when they hit the notorious “macet”, Indonesian language for traffic jam, they would be lucky to visit more than one customer a day. Fortunately, this deterioration of efficiency is partially compensated by the various electronic communication methods.
Secondly, the average cost of raw material is higher than that of China. Only a few of our raw materials are locally produced while others need to be imported from the US, Germany, Korea, Thailand and Malaysia with higher prices compared to China.
Thirdly, perhaps the most crucial one is the cultural gap between our Hong Kong and mainland Chinese managerial team with their Indonesian colleagues. Neither parties are communicating with their mother tongue but in English, that adds a layer of difficulty in exchanging ideas effectively. On top of that, the expectation of what pace work should be carried out is different.
That said, personally I see it as a blessing to be able to work between Hong Kong, Mainland China and Indonesia because I get to experience and understand both the advantages and disadvantages of these areas. Challenges are often subjective, and it takes time and effort to overcome these differences and arrive at a solution. At least I find it interesting to confront these challenges in operating our business in Indonesia.
What do you think about Indonesian in 5 years
In general, I am very optimistic with the development of this beautiful country. It is well known of its rich natural resources. What Indonesia needs is the right leadership from the government, which I think is getting better over the years. With the smooth succession of the President Mr Joko Widodo and his recent declaration of relocating the capital city to E. Kalimantan, we are expecting the country to grow steadily with the upcoming investment in infrastructure and constructions. In the future, the president has also given us hope in a more transparent business environment for foreign investors, with the launch of the governmental online system (OSS) which aims to remove bureaucracy and opacity in the process. To me the determination of the President to make things happen, and the results of his efforts are the most important factor for my business decision in the next five to ten years. As Indonesia currently stands, I think it is bound for growth in the next decade.