You are present in several sectors. How do you decide on different areas in which to engage?

I believe if you are looking for an opportunity to do business in Indonesia you need to focus on specific aspects. Indonesia has a large and mostly young population, something that you cannot neglect.

“The consumer market in Indonesia will always be there keeping up with rising GDP, which is why our tire and hospitality businesses continue to register positive growth.”

Indonesia’s economy is on auto-pilot at the moment. People are still in need of the basics. The consumer market is growing, the government is investing in infrastructure, pumping money into the economy and creating growth. I would say that as a business it’s necessary to evaluate, diversify and decide in which areas you need to concentrate your efforts. 

Our current strategy includes hospitality. We are building hotels in Bali and Bintan Island. A lot of people are noticing that there are other islands in Indonesia besides Bali, so we’re working closely with Salim Group to promote and develop the island. We started a taxi company in Bintan and we provide cafés and restaurants, so bit by bit we’re addressing the need for services. Salim Group is also opening an airport on the island and are already in talks with Sriwijaya Air to situate their maintenance base in Bintan, which will vastly improve connections. The idea is to make the island more convenient and affordable for visitors.

Salim Group is one of the major players within the tourism sector. How did you become partners?

When we first started the development, there was no real infrastructure on the island. I decided to enter the market because Salim Group were looking for partners to develop the island with them. When they built their mall with surrounding facilities, we completed our hotel. We continued to buy more land, do more projects, and have never regretted that decision.

When Salim Group started to promote Bintan Island people were reluctant to get involved. We were bullish enough to jump in and now everyone is starting to follow. Salim Group is a strong partner because of their size. However, as a smaller, more agile player, we are flexible in doing the groundwork and developing at a high pace. Bintan still has major development potential and we need to attract lots of tourists. The interesting part is that Indonesia has only about 12 million tourists per year, but Anthony Salim recently set Bintan a goal of two million foreign tourists. This number might sound ambitious, but from a long term perspective it is feasible. Numbers are already 700,000 a year and, with the new airport, this number will only grow.

How will you attract more international tourists?

Bintan has been under-promoted for the last 10-15 years, unlike Bali for instance. Indonesia has a lot of natural beauty which is ideal to promote but it all comes down to a need for basic infrastructure to support tourists once they arrive. It is in that sense a matter of supply and demand. Once that is there, the numbers will go up automatically. Indonesia has the potential and is in many ways comparable to Thailand.

How do you see the market developing in Indonesia?

The natural demand which comes from the growing consumer market of Indonesia. We see this demand growing over the next two to three years and our vision is to capture this growth with the launch of Stareast Hotel Management, which is in effect a hospitality management company. While we wait for the financial market to pick up, we see an opportunity to buy a lot of distressed hotel assets. We will be looking at Jakarta, but also second tier cities, such as Bandung, Jogjakarta and Medan. We are looking to acquire about 1000-1500 rooms to start. From there we can manage the hotels and expand to others. Because we started as real estate developers, we have a lot of knowhow in terms of property, but also the experience in running hotels efficiently. We would acquire a three-star hotel, refurbish it, deliver a more contemporary design, better rates and services. Our approach is also somewhat unconventional in the sense that we will use our IT business Kinerja to market and sell the hotels. For the business of hospitality management, we want to launch another division of Kinerja called Kinerja Travel.