JAKARTA – More Singapore companies are seeking help to enter and grow their business in Indonesia, attracted by the large market size and up-and-coming sectors in South-east Asia’s largest economy.
Enterprise Singapore, the government agency that helps businesses internationalise, told The Straits Times that it supported over 300 Singapore companies in 2023 in their move into Indonesia.
This figure is more than the combined number of companies that made the move in the previous two years – around 200 in 2022 and 100 in 2021, said EnterpriseSG director for South-east Asia Lim Jing Jun.
These companies come from a variety of sectors, including health, industrial infrastructure, green economy and digital economy.
Ms Lim added that in 2023, the projects in Indonesia clinched by Singapore firms generated about $111 million in overseas sales.
During the Singapore-Indonesia Leaders’ Retreat in Bogor, West Java, on April 29, Prime Minister Lee Hsien Loong and Indonesian President Joko Widodo noted that their countries continued to collaborate in emerging fields like the green economy and digital economy.
In 2023, bilateral trade reached US$69 billion (S$93 billion). Singapore recorded US$15.4 billion of foreign direct investment in the archipelago that year – a 15.8 per cent increase from 2022.
Indonesia is the world’s fourth most populous nation with more than 280 million people, and has an annual economic growth of around 5 per cent.
The country’s gross national income (GNI) per capita stood at US$4,580 in 2022, allowing it to rejoin the ranks of upper middle-income countries, which are those with a GNI between US$4,466 and US$13,845.
Indonesia had entered the club of upper middle-income countries in 2020, after about three decades as a lower middle-income nation. But one year later in 2021, it lost that status as the Covid-19 pandemic decimated livelihoods.
Ms Lim said that the strong economic cooperation between Singapore and Indonesia is supported by close engagement between the governments on both sides.
“EnterpriseSG works closely with Indonesian government agencies to explore investment opportunities that would contribute to the development of Indonesia’s economy,” she said.
One way that the agency supports firms in taking their products and services to Indonesia is through its overseas centres in Jakarta and Surabaya.
These centres familiarise Singapore companies with the Indonesian business landscape and connect them to potential partners.
The agency also conducts joint business forums and trips to various parts of the archipelago to promote investment opportunities, especially for companies in emerging and growth sectors such as the green and digital economies.
In March 2023, more than 130 government officials and businessmen from Singapore visited Indonesia’s upcoming capital Nusantara.
The three-day trip, supported by EnterpriseSG, was organised to help them understand the potential opportunities in the new city located in East Kalimantan.
One Singapore company that made its foray into Indonesia in 2022 is Zuno Carbon, a provider of an environmental, social and governance management platform that allows firms to track and report their greenhouse gas emissions.
Founded in 2020, the company wanted to take advantage of Indonesia’s growing economy.
“It is a country that has emissions-heavy sectors like manufacturing and logistics, and we felt that there were potential opportunities there,” said the company’s chief executive and co-founder Hari Nair.
EnterpriseSG helped Zuno Carbon connect with Indonesian firms, such as travel platform Traveloka, to pitch its services, which Mr Hari said was useful for firms which might not have established networks yet.
“Finding the right person to talk to, especially for niche solutions like ours, can be the most difficult thing in expanding to a place like Indonesia,” he added.
Health tech start-up Mesh Bio, provider of a platform that uses predictive analytics to manage chronic diseases, decided to expand to Indonesia in 2022, four years after it was set up.
Chief executive Andrew Wu said that entering the Indonesian market was a natural step forward, given its size and the rising middle class.
The firm secured a deal with Indonesian diagnostic service provider Pramita to roll out its platform in the latter’s more than 30 centres across the archipelago.
Dr Wu said that while Mesh Bio faced challenges such as localising its platform and explaining its use in Indonesia, EnterpriseSG helped by linking the firm up with healthcare business partners as well as mentors.
“Walking into this with an open mind and a learning mindset really helped us in expanding to Indonesia,” he added.
Source: The Straits Times
