Culinary Journey

Yono Purnomo is living the American dream as a celebrity chef earning millions.

Although U.S. President Barack Obama loves Indonesian food, it’s still an unknown cuisine to most Americans. Widjiono Yono Purnomo has gone a long way to change that, having served Indonesian food for a quarter of a century at a restaurant popular with many U.S. political elite. “Cooking is how I share my heritage,” says Yono, 60. He started his culinary journey forty years ago on a cruise ship. After graduating from what is now called the Bandung Tourism Institute (STP), Yono got a job in 1971 as a waiter aboard the SS Rotterdam, the flagship of the Holland America Cruise Lines. While traveling on the ship, he honed his knowledge of cooking and English. It was also on the same ship that he met in 1976 American Donna Metallo, whom he married a year later and the pair settled down in 1978 in the capital of New York State, Albany.
 

There he worked as a busboy, waiter, whatever it took to make ends meet in Albany. On weekdays he worked at the Albany Ramada Plaza Hotel, at nights he was a waiter at the Spanish-Italian eatery Casa Verde, and on weekends he did catering at the musical venue Tanglewood. In 1983 he became a U.S. citizen and was working at two restaurants, Scrimshaw and Twenty-One, the latter being a legislative haunt in what had been the governor’s mansion. Two years after working in Twenty-One, the owner offered him a chance to take over the restaurant, along with a $20,000 loan. “How could I say no. It was a very good opportunity. The owner took a 20-year note from the bank with a monthly installment $600 that I had to pay,” Yono says. He then started to hone his cooking skills even further, joining the American Culinary Federation, the largest professional chef’s organization in America, and studying under the legendary Fritz Sonnenschmidt, the Culinary Dean of the Culinary Institute of America, one of the world’s top cooking schools.

Just as his name started to get recognition, tragedy struck in 1985 when the restaurant burnt down. It was a turning point for Yono as he had the chance to open his own restaurant that is now called, simply, Yono’s. Taking out a $800,000 loan, Yono opened Yono’s in 1986 offering a unique blend of continental and Indonesian dishes. The restaurant quickly became a success and a place where the city’s power elite could wine, dine and schmooze. Among those who have dined at Yono’s are the state’s governor, the mayor, and many legislators (and undoubtedly numerous lobbyists as well). Even Hillary Clinton have eaten there.

In 1999, Yono moved his restaurant to a new locale, a new $15 million entertainment center that also had a nightclub and, unusually, a car dealership. For this deal, Yono got a 20% stake in the venture, putting in no capital, just lending his name to the project. However, the venture collapsed after four years, deeply frustrating Yono. He mulled moving to Florida. Another helping hand then came. His plan to move to Florida was revealed in a local newspaper report seen by Mayor Gerald David Jennings and local developer I. David Swawite, who immediately offered him a different option. “They basically said that they were very sorry that I was planning to leave Albany. They were willing to give me opportunity in the David’s new hotel. They would give me space and also help me with the investment,” Yono explains.

In the 165-room Hampton Inn Hotel, Yono got a 3% stake and a prime ground floor location for his restaurant. The mayor and Swawite put in $400,000 out of the $1.2 million total investment.  After a 15 month period without a restaurant, Yono reopened in 2006. Later, Yono expanded by opening an adjoining restaurant, called DP An American Brasserie. a casual restaurant that is handled by his son, Dominick Purnomo. It turned out to be another hit, and, as with Yono’s, it serves a mixture of continental and Indonesian dishes. “When I first started my business, I only had seven employees, now I have over a hundred,” Yono says. He claims his annual income from the two restaurants tops $1.8 million.

 

So what makes Yono’s so popular? The answer is simple, he says: “If you create a good restaurant, people will come. But you have to maintain it and be consistent. It is all about quality of the product and service.” Yono’s offers 30 items on his menu; half featuring traditional continental fare, such as grilled New York strip steak or Maine lobster. But the other half is pure Indonesian, such as sate, nasi goreng and gado gado. He even prepares a five-course rijsttafel.  

“The menu at Yono's features both Indonesian and continental dishes and it is often fun to order an Indonesian dish, such as bakmi goreng, as an appetizer followed by an American or French styled entree, such as lobster, duck or short ribs. The wine list is also very impressive. Yono's son, Dominick, is the sommelier and he is one of the most knowledgeable wine people I have met. The dining experience at Yono's is like no other in the region—elegant, refined and thoroughly enjoyable,” says William Harris, president of the Albany chapter of the Chaine des Rotisseurs, the world’s oldest international gastronomic society. More praise comes from Steve Barnes, senior writer and restaurant columnist at the local newspaper Times Union. “Yono strives to provide people not simply with a meal but with a complete dining experience. He's a true hospitality professional,” he says. “He also always works as hard as his employees and done every job he expects them to do.”

Yono has also gotten some national recognition. He has appeared on the nationally televised news program, the Today Show, and the Food Network. He has also done presentations in New York’s famous James Beard House. As Yono says: “What can I say? I am a perfectionist.”

*PHILANTHROPY

“I don’t really have a lot of money, but I have a lot of time and I love to help others,” Yono says. He is a board director for a staggering 90 charitable and community service organizations. He get started on philanthropy after the 2004 tsunami hit Indonesia. “I knew I had to do something. In my heart I am still Indonesian. So when I came to Indonesia I decided to offer scholarships for kids who couldn’t afford to go to school. I called my wife and said, can you send me $10,000?” he says. Back in the U.S., he got together with five other chefs to hold an annual charity dinner, raising more than $50,000 since 2007. Later, he collected about $29,000 to set up a scholarship fund for his former school in Bandung and for Schenectady County Community College (SCCC) in New York. He also wants to organize an exchange program between SCCC and his Bandung school. “I hope sometime next year the exchange program can be implemented,” Yono says. He is also active in Albany, where he created and chairs the Albany Wine and Food Festival, which benefits cultural institutions in the city, such as the Albany Symphony Orchestra and the Capital Repertory Theatre. Says Harris: “As long as I can remember, the Purnomo family has always contributed their time, food and labors to worthy causes.”

  Yono's story on Forbes

Turning Waste Into Treasure

Indonesia’s largest garbage disposal site, the Bantar Gebang landfill in East Jakarta, is the improbable site of a bold experiment to solve two of Jakarta’s most vexing problems: creating more electrical power and reducing its growing mound of garbage. Since its establishment in 2009, PT Navigat Organic Energy Indonesia (NOEI) has been processing and then burning Jakarta’s garbage to turn it into electrical power. So far four megawatt of power fired from methane gas has been produced.

On a pure economic scale, Navigat is, so far, a failure. It has yet been generating losses, earning about only two thirds of every rupiah it spends to generate one kilowatt of electricity. But that hasn't stopped the company from believing in garbage as an unlikely hidden source of fortune. “We believe our business will triumph. We may still be suffering losses now, but when the time is right, this waste can be turned into treasure,” said Navigat’s President Director Agus Santoso, in an interview in his 800 square meter  office at Senayan City complex in July 27.

PT Navigat Organic Energy Indonesia was established in 2003 in affiliation with PT Navigat Energy, the sole distributor of GE Jenbacher—the world's leading gas engine manufacturer. The alliance with Navigat Energy ended in 2007, when 95 percent of the stake transferred to Singapore's Wirose Investment that partly owned by Willi Gaysmith and Pierre Sauren. The remaining stake in NOEI is now hold by PT Multi Artha Sukses Sejahtera owned by Arief Tjandrawinata.

The potential in doing waste business in Indonesia is huge. Indonesia produces almost 200,000 metric tons of trash daily and demand for electrical power is growing at least 9% annually, this waste-to-power business in theory holds loads of potential. Taking into account that one megawatt (MW) of power requires between 50 and 75 tons of waste, Indonesia is sitting on an unlikely natural resource that could be exploited to produce at least 2,500 MW of electricity a year just on the existing supply of waste, not counting the trash already lying around all over the country in landfills. To put that in perspective, 2,500 MW of electricity is enough power for meet the requirements for 2 million households daily.

To be sure, there are reasons besides commercial ones to develop this technology. It is a form of “green” energy, and Other reasons? incentives in the form of potential revenue from the carbon market and local governments would also help cover cost, says Agus N Santoso, Navigat president director.

"There is still hope," says Agus, 49.

The project expects to earn the company $15 US a ton from the carbon market, Agus says, while a fee of Rp 98,000 ($10.5 US) for every metric ton of waste is expected from the local administration, enough to cover about 35 percent and 24 percent from operational cost, respectively.

Although those would not come without a problem.

"So far, only Jakarta has allocated such a fee," Agus said. “For the carbon credit scheme, Navigat still needs to wait for approval, and it may take sometime before it fully materializes."

So for now, Navigat is making do by utilizing 'the sideline products' of the process, that includes concrete brick, fertilizer, tar and recycling output such as plastic, paper and card board.

Agus said the proceeds would help bring in extra income, to complement the 8 US cent it receives for selling 1 kilowatt hour of electricity to state utility company PT Perusahaan Listrik Negara (PLN), about 4 US cent short of the cost it spends to have that electricity generated. 

Navigat currently operates the 9.6 MW power plant in Sarbagita, Bali and is scheduled to soon run total a 14 MW plant in Bantar Gebang, Bekasi.

The $30 million plant in Bali had been registered to attain certified emission reduction from United Nation Framework on Climate Change (UNFCC), with total carbon reduction of 123,423 tons annually. Navigat expects to secure a minimum of $1.5 million US annually from carbon trade.

In Bantar Gebang, Navigat invests Rp 300 billion jointly with PT Godang Tuajaya to generate 14 megawatt in 2011 and a carbon emission reduction from burning 750,000 tons of trash annually worth a minimum of $9 million.

For these projects, Navigat uses technology of pyrolysis, gasification, landfill gas and anaerobic digestion (GALFAD) with technical support coming from UK-based company Organics and GE Jenbacher of Austria, subsidiary of GE Energy, which has engaged in gas engine business for over five decades and involved in series of biogas engines project including in Australia, Italia, Spanish, China, Pakistan, and Japan.

Pyrolysis technology is a burning process that leaves no carbon emission to the environment. In the gasification, trash at the final disposal point were put in waste reception area before heading for a plant to separate the organic trash from non organic one.  Gasification of organic trash is the process of converting biomass into methane gas and it has widely used since the Second World War to operate cars, trucks, boats, trains and generators.

The organic waste would be crushed and dried before being heated with 1,000-1,300 Celsius temperature to undergo a process called anaerobic digestion to produce carbon monoxide, methane and hydrogen -- about 85 percent of which will be used to fuel generator, namely gas engine, to produce electricity. The remaining waste from this process will be used to produce concrete brick.

Wet organic trash will go to structured landfills. It will be covered with membranes cells and filled with water to create fermentation and produce gas. The gas will proceed to the generator, while the remaining trash will be processed into fertilizer. For the non organic trash, it will be selected again before it undergoes a recycling process.

Waste to energy power plant has widely used across Europe and US since 1970s. According Belgium-based Confederation of European Waste to Energy Plants's data published in 2008, about 432 waste plants operate in Europe, with total generating capacity 26 billion kWh of electricity and 65 billion kWh of heat, enough to distribute electricity to  5 million households and heat for 4 million households. While in US, based on International Solid Waste Association, the waste plants were amounting to 89, with total generating capacity 2,493 MW. Currently, about 780 waste plants operate worldwide processing 140 million tons of waste annually, referring to Waste to Energy Research and Technology Council's data.

PLN, the sole provider of electricity in the country and the buyer of electricity generated by independent power producers, praised Navigat's initiative as the catalyst for the development of renewable energy in the country.

While the potential is there, it is such an infant industry in Indonesia. This year for instance, electricity generated from renewable source of energy would stand at 4 MW, mostly coming from biomass-based industries such as oil palm, wood and sugar cane. 

Moch Sofyan, head division of renewable energy of PLN said the 14 MW in Bantar Gebang could help bring electricity to 15,000 to 17,000 households. “PLN supports any development from renewable energy,” Sofyan said.

Power Purchase Agreement for Bantar Gebang plant had signed in August with tariff set at Rp820 a kWh per the first seven years, and decreased to Rp750 a kWh afterward.

By 2015, PLN estimates that biomass could reach a total capacity of 25 MW and further increase to 40 MW in 2019.

“We want the development of the energy to concentrate outside Java, as those islands desperately need power, besides they have resources, including waste and residue from palm oil, and sugar cane,” Sofyan said.

“If they can generate 2 MW from the waste, it means they could bring electricity for a whole regency."

“Much works still to be done to reduce obstacles to investment in the country’s clean-energy sector,” Sofyan said, “But from our side (PLN), we are now in negotiation to increase feed in tariffs and how to accelerate the power purchase agreement.”

Navigat could smell a fresh air if the tariff negotiations bear fruits. Indeed, even now that it is in the red, the company is eager to participate in many more independent power producer project tenders to be carried out by PLN for Surabaya, Bandung, Medan, and Semarang.

“We keep our hope alive for our business triumph. We may still suffer losses for now, but when the time is right, these waste will turn to treasure,” Agus beams.

Rebuilding Maluku

Maluku's Governor Karel Albert Ralahalu and me on Maluku's governor yacht when we were traveling to Saparua

 

Maluku’s governor has turned around the region into one of growth and peace from the dark days of violence a decade ago.

Maluku, one of the nation’s oldest provinces, was in tatters following the 1999-2002 sectarian violence. Not only did it cause the death of thousands and the displacement of perhaps half a million, it also left behind a huge rebuilding task with the provincial economy at its worst contracting by 29%. But Maluku has shown its resilience and its economy is expected to grow 6.5% this year, matching the national rate.

A rise in the fishery, forestry, mining, tourism sectors are among the key drivers of this recovery of this province of 1,336 islands spread over 600,000 square kilometers. Maluku, also known as the Moluccas, is a major exporter of fish to Asia and the U.S. President Susilo Bambang Yudhoyono has set 2015 as the year the province is targeted became one of biggest seafood exporters in the world, setting aside Rp 950 billion for investment in the sector, most of which would go to processing industries. The islands of Tual, Seram, Aru and Ambon are designated to be centers for this expanded fishery industry. The program aims to raise the fish output from 300,000 tonnes a year to 500,000 tonnes within two years.

The province, which borders East Timor and Australia in the south, also has many natural resources. The $4.9 billion Masela natural gas project, being done by Japan’s Inpex Corp, in the Arafura Sea is just one of several oil and gas projects in the pipeline. In plantations, Maluku is going to back to its roots as the home to the fabled spice islands, and is looking to raise its output of nutmeg, cloves, cocoa, coconut, cashews and coffee. Tourism is another area prioritized for development. To review progress so far and prospects for the future, Maluku Governor Karel Albert Ralahalu, 65, sat down with Forbes Indonesia, in his offices. Karel, a former brigadier-general in the armed forces, took office in 2003, just after the end of the violence.

Forbes Indonesia: After the central government agreed to inject Rp 950 billion, what is your strategy to bolster the fishery sector?

Karel Albert Ralahalu: We will increase production by optimizing the utilization of fishing ports from the current 12 fishing docks, as well as the modernization of the fishing fleet for small fishermen, together with the construction of production and processing centers that protect the sustainability of resources. We will also develop the fishery industry. As you may know when the president came to Banda last year, he launched Maluku as a national fishery center, given the enormous potential in the province. We have an estimated 1.7 million tonnes of potential annual fish output but the current production only stands at about 300,000 tonnes. To fully tap that potential, we need good management and investment.

FI: What about seaweed farming?

KAR: Maluku has the potential in this sector as we have around 1,000 kilometers of coastline. Seaweed from Maluku among the best in the world. Last year, the output was 47,783 tons. Seaweed is actually the best way to generate income and overcome poverty issues here as production takes only 40 days, from cultivation to harvest. This year, seaweed is also one of my priorities.

FI: What about the pearl output?

KAR: Maluku’s pearls are also world-class. The pearl industry is centered on Dobo island in the Aru regency. In 2009, pearls output stood at 1.7 tonnes, which is mostly exported to Japan, U.S. and Europe. It is our third biggest export by value. We are eyeing to boost the pearl output.

FI: Others?

KAR: Our clove and nutmeg output is quite high. Most of the world production of cloves and nutmeg come from Maluku. The nutmeg output was more than 1,000 tonnes, while cloves is more than 11,000 tonnes. We are trying to develop an oil industry that comes from spices, including nutmeg, cloves and eucalyptus oil. We also are focused on developing coconut and palm oil plantations.

FI: Tourism?

KAR: Yes, we are continually promoting it, we hope with the Sail Banda event last year, the world would recognize Maluku even more [an event in which around 100 yachts visit the Banda islands]. After the conflict, the security issue remains the main concern for tourists. But we are again promoting this area and will ensure their safety. Another issue is the transportation. For tourists, it is difficult to visit other islands in Maluku. Just take Banda as an example. From Ambon, there is only one flight a week, so that’s a constraint, although the flight to Ambon is no longer an issue, as there are many flights on Indonesian airlines. But for land and sea transportation, I admit it remains a problem. We will resolve this.

FI: Have you tried to interest foreign investors in infrastructure projects?

KAR: Infrastructure development in an archipelago province like ours is not the same situation as with other provinces. To reach all the islands, we need to use three modes of transportation; sea, land and air.  We have encouraged investors to invest in infrastructure. We have also ensured them not to be worried about regulations as we will fully support and cooperate with them. We are in the process of building a road infrastructure with help from a Japanese company, slated for completion by 2013 at the latest. We also trying to expand our airport, Saumlaki, so larger aircraft can also land. It is scheduled for completion by 2012. We also in negotiation with the Australian government and Australian airlines to open direct flights from Darwin to Ambon, because it only takes 30 minutes flight from there.

FI: What is the state of development on the Masela project?

KAR: As early as 2018, Masela will start production. Most of our deepwater areas contain massive oil and gas resources. ConocoPhillips is also in the process of exploration.

FI: Do you think the economic growth target of 6.5% this year can be reached?

KAR: I believe we will. However, the poverty rate is still high, at 28%, because many islands are still not connected with the mainland. If our transportation network can be better developed, this issue could be better addressed. Currently, the average earning for households in Maluku is just Rp 6,000 per day. Out of 1.5 million inhabitants, most work as fisherman, but there are also farmers who produce cloves, nutmeg and rice. We are also good in handicrafts, such as seashell crafts and woven fabrics.

FI: You are in the seventh year of your term, what have you accomplished?

KAR: I started my term in 2003 soon after the riots ended. At the time, my focus was on stability and recovery. Starting in 2005, my focus has been on the development of Maluku’s competitiveness. I developed Maluku from a declining to growth economy. Before our growth rate was negative 29%, now we are at 6.5%. When my term ends in 2013, I believe our growth rate can reach 9%. My focus is to develop seaweed, fishery and aquaculture. About 90% of Maluku’s area is ocean. With almost 1,400 islands, which nearly a third are not inhabited, my task is quite hard. The poverty rate has been reduced from 35% in 2002 to 28% last year, while the unemployment rate has dropped from 13% in 2003 to 9% in 2010. My priority is in economic development focuses on developing Maluku through priority sectors, including fishery, plantation, tourism as well as oil and gas. 

Interesting Facts:

-Although Karel is a former brigadier general in armed forces but he has very soft voice and he is very modest. He is far from strict image that i imagined from someone from armed forces. He was kind enough to take me travel around Ambon and we were traveling also to Saparua, which is known for its 17th century Dutch forth that remind us with Pattimura struggle against Dutch colonial. In overall, I was very impressed on how beautiful Ambon is.

- Despite years of peace, the deadly sectarian violence between Muslims and Christian over three years starting in 1999 is one of the darkest chapters in the long history of this region. Yet in September 2003, less than a month after Karel Albert Ralahalu was elected governor, the emergency status in the province was finally lifted. The peace process involved negotiations between Muslim and Christian leaders along with other community leaders. They tried to settle their differences under the slogan pela gandong, which means all those on Maluku share a common ancestry and are, in effect, one family. To seal the peace, leaders from various factions would often drink a mixture of palm wine tinged with both of their blood, thus binding them together. Awath Ternate, the district head of Batu Merah, where the unrest first started, says pela gandong  has brought peace to the area. “God teaches us to never harm others, especially our own family. Maluku is one big family, and we should not hurt each other,” he says.

-Maluku lies in the eastern part of Indonesia. Some 90% of the province’s area is sea. With its capital, Ambon, the province has nine districts and is home to countless diving sites. The biggest islands are Seram, Buru, Yamdena and Wetar, but Banda is the most favorite destination for cruising and diving. Maluku has much potential for plantations as currently only 25% of its 200,000 hectares that are suitable for farming have so far been cultivated. It also has huge untapped resources for oil and gas, gold, copper, sulfur as well as mercury. But the current economic growth remains heavily dependent on tourism and fishery.

Maluku exports in 2010:

Commodity                                    Value ($)           

1) Copper                                    9,013,044           

2) Fish, shrimp                            7,654,550           

3) Jewelry                                    3,664,065           

4) Coffee, tea, spices                 2,362,361           

5) Grains                                         358,092           

6) Resin and latex                          233,201           

Total                              23,285,313           

Source: Statistics Indonesia (BPS)

Cruise Control

Indonesia is home to world-class tourist destinations, so why is the cruise industry stalled?

Indonesia’s tourist attractions are many. The fascinating cultural diversity and natural beauty of Indonesia are second to none, as well as its diverse wildlife, beautiful beaches and world-class diving sites. Among its well-known destinations are Bali and Komodo islands, the latter with its famous dragons. “I’ve been to almost every famous cruising destination, including the Caribbean, Mediterranean and Australia. Believe me, nothing is like Indonesia,” says American Patti Seery, owner of the luxury charter ship Silolona, which is based in Indonesia.
Yet Indonesia lags behind regional cruising destinations. Singapore received 642 ship calls last year. Indonesia? Only 90, just 14% of Singapore’s figure, according to data from the Ministry of Culture and Tourism and Singapore Tourism Board. The main stumbling block is the lack of decent ports to handle cruise ships. “What Indonesia is lacking is high- quality, professionally organized port facilities to fulfill the standards of big cruise liners. Indonesia has not had a cruise facility of the same quality as those in the Caribbean in 20 years,” says Neil Hempsey, a founding partner of Indo Yacht Support, which specializes in superyacht support and logistics. Kelvin Tan, Regional Director, Asia Pacific, Royal Caribbean Cruises, agrees: “We strongly urge the Indonesian government to actively develop some port and terminal facilities for large cruise ships like ours.”
There are 31 commercial ports scattered across the country, but none meet the requirements for cruise ships. The country’s four biggest ports, Tanjung Priok in Jakarta, Tanjung Emas in Semarang, Tanjung Perak in Surabaya, and Benoa in Bali have no facilities for cruise ships. “They are purely commercial docks for container ships and tanker ships, but not for cruise ships,” Neil says.
“The infrastructure just does not exist. That was why I always anchor my boat in the sea, we never go into a harbor,” says Patti from Silolona. She gives an example of Ambon. “Ambon has the most beautiful natural harbor but it doesn’t have a dock,” says Patti. The government says it will address this problem, with plans to build cruise ship ports across the country. The government started building the Amuk cruise port at Karangasem in Bali in 2006, at an initial cost of Rp 97 billion, but it is not yet ready to accept the largest of modern cruise ships.

While the Bali port is a start, Indonesia is late to the game. “Indonesia should learn from Singapore,” says Sylvain Croise, managing director of Bali-based cruise operator Seatrek Sail- ing Adventures. Singapore built its Singapore Cruise Center two decades ago, and a new cruise facility at Marina South
is also under development, scheduled for completion by the end of the year. “Once completed, it will double Singapore’s capacity and allow for more cruise ships to call on Singapore,” says Remy Choo, deputy director for cruise at the Singapore Tourism Board. “The new terminal will be able to accommo- date the largest cruise ships currently in service, complete with parks and a waterfront promenade, vibrant nightlife and entertainment, events and celebrations, all accessible within minutes of the new cruise terminal.”
Another factor hampering the cruise industry is the forthcoming cabotage law, set to go into effect in May. Thelaw obliges all vessels operating in Indonesian waters to fly an Indonesian flag. Although it’s unclear whether cruise ships would be included under the new law, it could severely hamper, or even block, most cruise ships flying other flags from entering Indonesian waters. “The law is designed for commercial shipping but it would block cruise ships from coming,” says Cilian Budarlaigh, another founding partner of Indo Yacht Support along with Neil.
Cilian notes that a foreign flagged vessel would need to have temporary permit should it plan to cruise more than 40 hours and berth in more than one port in Indonesia. “Cruise ships generally travel thousands of miles, and they don’t want to visit only one place,” says Cilian, who hopes the government would clarify the treatment of cruise ships under the new law. Otherwise, warns Neil of Indo Yacht Support, “They will choose to go somewhere else.” The situation is made even worse with the uneven regulations for permits to visit certain ports. “If we process a permit with the customs office in Jakarta, it will cost about $400, but if we process one in local offices, [the same permit] may cost us $3,000 to $4,000,” says Cilian, whose company handled the permits for 47 superyachts that visited Indonesia last year. Nationally flagged vessels, such as the Silolona, Seatrek, or Yongline cruises do not require permits. Yet even they are not entirely happy with the situation. Rimayanti, director of Yongline Cruise that operates 30 vessels in Indonesia, says: “We’re disappointed with the lack of supporting facilities at the ports, including clean water, electricity and fuel supply.”
Currently, two giant foreign-flag cruise operators that call on Indonesian destinations are Princess Cruise and Royal Caribbean. Their passengers depart out of Singapore or Melbourne to stop in destinations such as Bali or Semarang. The ships would normally anchor at sea and then ferry passengers ashore, which is not as convenient as offloading passengers directly onto the land, as these ships can do in Singapore.
Cilian strikes an optimistic note: “Make everything simpler for cruise ships to come in. Change the worst situation [in Asia] into the best cruising destination.”

*The Article published on Forbes Indonesia vol 2, issue 3

Clash of the Titans

After receiving a frenzied round of bids from some of the world’s leading retailers, PT Matahari Putra Prima announced in January that its Hypermart unit was no longer for sale and will instead seek a strategic partnership. “We would like to bring in a strong global partner and are determined to retain and grow our Hypermart business,” said Matahari President Director Benjamin Mailool in a January 11 statement.

Since late last year, Matahari had attracted bids reportedly from Wal-Mart, the Carlyle Group, South Korea’s Lotte, France’s Casino and Hong Kong’s Dairy Farm. The pulling of the sale signals Matahari’s intent to launch a new round of aggressive expansion. Matahari’s long-term goal is to overtake rival Carrefour, a unit of the French retailer now partnered with billionaire Chairul Tanjung’s Para group.

 “We believe we can defeat Carrefour by next year,” says Matahari Director Carmelito Regalado, who is in charge of merchandising and marketing. Matahari plans to open 30 new Hypermart stores this year, brining its store total to 82, or two more than operated by Carrefour. Last year Hypermart had sales of $1 billion, trailing Carrefour’s sales of $1.5 billion. In 2012, Matahari opens to add another 20 stores to the Hypermart chain.

To pay for 30 new stores, Matahari has prepared Rp 1 trillion for the expansion, as each Hypermart costs about Rp 27 billion to build. Hypermart will also open a new logistics center, in either Makassar or Ambon, to support the expansion. Matahari hopes to open its first Hypermart in Papua within two years. “We have to ensure that we have strong logistical support before we open on Papua,” says Matahari Corporate Communications Director Danny Kojongian. Hypermart is already in such diverse locations as Manado, Pontianak and Banjarmasin.

Tycoon Mochtar Riady’s Lippo group controls Matahari, which established Hypermart in 2004. Mochtar purchased Matahari from its founder Hari Darmawan in 1996, an entrepreneur who had grown Matahari from a single small outlet in 1958 to pioneer the department store concept in the country, eventually listing Matahari on the stock exchange. Helping fuel the expansion of Hypermart will be Matahari’s recent sale of a majority stake in its department store unit, Matahari Department Stores, to U.S. private equity firm CVC Capital Partners for Rp 7.2 trillion, of which Rp 5.3 trillion was cash.

Some claim Hypermart may only have a partial victory against Carrefour next year. Hypermart may have more stores next year but its revenue may not exceed that of Carrefour’s, according to Kim Eng analyst Lucky Ariesabdi: “It is mostly because the locations of Hypermarts is not as strategic as those of rival Carrefour.”  Lower quality locations translate into lower revenue per store. According to a recent survey by researcher Nielsen, about 80% of Indonesians chose where to shop based on convenience or location.

However, the Lippo connection for Hypermart is still significant. Wherever Lippo goes, Hypermart can follow. “Hypermart is blessed that it is part of the Lippo group, so it can open stores wherever the group has malls,” Lucky says. It’s likely that everyone will continue to do well regardless of market share. The entire market is growing so fast, with consumer spending expected to grow 15% this year, that everyone can enjoy a slice of a bigger pie. 

*the article published on Forbes Indonesia Vol 2, Issue 3