LM FEB UI Discussed Strategies for Indonesian BUMN Go Global
Nino Eka Putra ~ Humas FEB UI
JAKARTA – Formation of President Joko Widodo’s Cabinet Volume 2 with pressure that Indonesian BUMN must be able to increase competitiveness plus start entering the global market can be used as momentum to move immediately. With the new composition, the Minister of BUMN, assisted by 2 Vice-Regents, is expected to boost performance.
The management of BUMN in the future places more emphasis on aspects as a corporate institution, no longer on the bureaucratic aspects. To that end, the FEB UI Management Institute held a BUMN Power Talk Series with the theme “BUMN Going Global – Strategy and Action Plan” to answer problems and strategies going forward BUMN to go global with the speakers, practitioners, government, and BUMN that took place in the Krakatau room , Hotel Novotel, Cikini, Jakarta, Tuesday (12/10/2019).
BUMN Power Talk Series was opened by the Head of the Management Institute of FEB UI. Followed by a keynote speaker from the Special Staff of the Minister of BUMN in the Field of Communication. After that, the material presentation session was divided into two topics, namely Topic 1 concerning Overview of BUMN Performance & Future Strategic Challenges and Topic 2 regarding BUMN Goes Global: Strategy and Action Plan.
Special Staff of the Minister of BUMN in the Field of Communication, Arya Sinulingga gave a keynote speaker that the challenge of the BUMN now is the unequal BUMN revenue which shows revenues of 210 trillion & 76% of the 15 state-owned enterprises, many BUMN subsidiaries that have business slices, fat structures & inefficiencies in the Ministry BUMN and Directors / Commissioners, and SOE liquidation review review.
“So, to overcome these challenges, the Minister of BUMN adopted four strategic policies, including bureaucratic reform by cutting 7 deputies to 3 deputies (Legal, HR, Finance), secretary of the Minister for administrative focus, bureaucratic reform within the 6-month term of BUMN Minister. Next, restructure BUMN debts and restore the core business lines of state-owned companies. And finally, the top priority in the culinary, energy & health security sector is not only domestic but also the global market,” he said.
“BUMN Minister Erick Thohir did not hit the bottom but immediately hit the top of his leadership,” said Arya Sinulingga at the end of the keynote speaker.
Topic 1: Overview of SOE Performance & Future Strategic Challenges
Willem A. Makaliwe as Wakabid of the Management Consultation Research Institute (LM) of FEB UI, said that urgent macroeconomic issues related to the current account deficit include service transaction deficits, oil and gas deficits and thin non-oil and gas surpluses and inflation that is still above 3%. Uncertainty in the direction of global macroeconomics continued from 2018 and 2019, but did not lead to an economic recession. Trade disputes ultimately result in losses for each country. Banking interest rate spreads are still large due to interest-based dependence that is still high. The ongoing budget deficit can create fiscal sustainability. Future challenges related to the micro approach are needed in understanding the problems facing the business world and industry.
Toto Pranoto as the Head of the Management Institute of FEB UI explained that the role of BUMN in the global economy further strengthens their existence in competing in increasingly competitive markets. Indonesia listed itself as one of the countries with a significant BUMN contribution to the domestic economy. Total BUMN in 2018 in terms of assets is 8.118 trillion, revenue is 2.360 trillion, and net profit is 154 trillion. The performance of BUMN in Indonesia currently shows a Pareto condition where around 80% of the total contribution of BUMN revenue is only contributed by around 20% of the total company. This means that many BUMN have not yet operated optimally.
The holding options that must be implemented by BUMN include hands on ownership, financial sponsorship, synergy creation, strategic guidance, functional leadership, and hands on management. So, the next step for BUMN after the formation of holding is the adaptation of organizational culture, the unification of institutions (including HR & business processes), the mechanism of government capital participation, and government control over PGN.
“How to strengthen the competitiveness posture of future BUMN by increasing the number of BUMN included in the category of contributors, restructuring (spin-off) for BUMN that are less healthy internally (financially) and their contribution to the public sector is minimal, and spin-offs are expected to make span of control to BUMN is leaner, “explained Toto Pranoto.
Topic 2: BUMN Goes Global – Strategy and Action Plan
Budi Noviantoro as the President Director of PT INKA (Persero) said that PT INKA’s strategic plan to penetrate the export market with the success of reaching stage two by doing innovation and technological transformation independently. To reach stage three / more advanced & higher income, INKA must master technology, produce good quality products & add added value from the railroad business scope.
Destiawan Soewardjono as Director of Operations III of PT Wijaya Karya (WIKA) Persero, Tbk, continued that WIKA’s operational strategy has been exploring the construction business in Africa since 2007 in collaboration with Kajima. Since then, active road shows in African countries before the Indonesian government. In addition, cooperation with local partners, Indonesian BUMN, foreign companies & investors. Then, making the Ministry of Foreign Affairs of RI and its strategic partners & also the door of networking for stakeholders / stakeholders in the target country of WIKA and actively participating in international events organized by the Ministry of Foreign Affairs of the Republic of Indonesia. Forming a new SPV for WIKA International as a parent operating abroad and offering strategic project funding scheme options. Thus, strengthening WIKA’s marketing team both at headquarters and in overseas branches.
Sri Harsi Teteki as Marketing Director of Research & Development 1 of PT Bio Farma, said that Bio Farma’s strategy to expand its business with pro-industry regulation regulation, competent HR, collaborative R&D, quality & efficient manufacturing, infrastructure to support industrial growth, and ABGC forum.
In addition, Bio Farma’s export market expansion program includes expanding markets with existing products (vaccines and bulk), optimizing bulk sales through offering independent vaccine production programs, and enhancing relationships / networking with government agencies in order to find new market opportunities.
“Creation of 7 values from BUMN Pharmaceutical holding by increasing product dominance in focus areas, maximizing efficiency & productivity, strengthening the overall value chain, reducing imports & increasing exports, advancing innovation & science through research & development, creating synergy with the National health sector ecosystem, and business diversification into the lifestyle segment,” he concluded. (Des)
