'YOUR NETWORK COULD BE A REAL ADVANTAGE...' What's NewS Issue 9 October 1997 working relations 3 In spite of recent economie troubles throughout most of Southeast Asia, growth continues to be the longer-term indicator for many corporates in these high potential markets. Jakarta-based Sierad Produce is one of those companies which exemplify the Asian dream. Although just over a decade old, the former poultry producer has already branched out into related sectors in F&A. And, as president-director Budiardjo Tek explains, is poised for further expansion into key markets. How can the bank support this development? Tek has some suggestions. While many people in Southeast Asia may regret what is perceived as an intrusive westernization of society, culture and tradition, just as many Asians experiencing the advantages of booming economies prefer to talk about modernization. Increased prosperity and enhanced purchasing power have led not only to greater access to higher standards of living. They have also led to changes in consumption patterns that, in their turn, generate opportunities for industry. Rapid growth over recent years in the poultry industry throughout the region is just one example of increased consumption. But it also represents something of a blueprint ttpr how domestic operators can take ^dvantage of cross-border opportunities. FAST EXPANSION Sierad Produce is a case in point. 'The poultry sector has grown massively,' confirms president director Budiardjo Tek, 'indicating the changing consumer behaviours that are characteristic of the domestic market here in Indonesia, but also elsewhere in the region. And we have grown with it,' he adds with some understatement. Sierad was set up in 1985 as a dedicated poultry production and processing operation. In less than 12 years, it shows annual sales growth of up to 60 percent on a USD 150 million turnover; profit is around USD 12 million. 'Much of our increased sales volume is a direct result of both integration and fcversification,' he explains. Tliversification means the company's expansion into fast food in Indonesia, Hong Kong, China and perhaps most surprisingly given 'westernization' fears, the US. Sierad's acquisition of a majority This interview with Sierad was made well before the present currency crisis in Southeast Asia which is why it makes no reference to current problems in the region. Lack of time prevented us from pursuing the situation for this issue, but we will return to it in November's What's NewS. stake in Hartz Restaurants Inc. USA is just one example of reverse investment, although even here the strategy remains acquisition in order to facilitate regional expansion through franchise options. EARNING POINTS A listed company with very nice numbers, Sierad's highly sophisticated treasury is courted by just about every bank in Indonesia, both national and international. So how does a bank distinguish itself from the competition? 'It's not just about cheap money,' Tek confirms. 'Sure we want the best price and the best terms available.' At the same time, Sierad is a loyal partner. 'One of your competitors recently came to us with a really innovative offer. It doesn't really matter what the structure was. What counts is that they developed it for us and proposed it to us. This is a bank we work with occasionally. The fact that they are thinking proactively about our needs earns them points at Sierad.' NETWORKING POTENTIAL Asked how Rabobank could offer additional customer value, after some consideration he replies: 'We already have Sierad's president-director Budiardjo Tek poised for expansion. a good working relationship with the bank. One advantage for us is certainly the know-how you have in this business. Few banks can offer that. And at this point, we work with both your Singapore and Jakarta branches. What we feel you could do for us in addition to the financial side is make improved use of your networking potential.' According to Tek, Southeast Asia is traditionally a relationship-oriented region - that, apparently, is one aspect of general culture in the area that has not changed in recent decades. MORE POINTS 'Triple-A rating - great,' he says frankly. 'You recently did a syndication for us and the Rabobank name is very useful, especially in F&A worldwide. You definitely have that reputation. But as a rapidly expanding business, our needs are more than plain vanilla. Let me give you you one example here. We already have two operations in the People's Republic of China - Wendy's in Shenzhen and Hartz in Shanghai as well as Hong Kong. We will be expanding that presence over time. Now, China is very much one of those markets where introductions and networking is everything. And that also applies to Hong Kong. It is hard to go knocking on doors in new markets. What we would like to see is a more proactive approach from Rabobank in smoothing the way for us in these areas. I could envisage you providing support from your Hong Kong or Shanghai branches for us. By working with us on this, you would be offering real customer value for us, the customer - and earning lots of points from us at the same time.'

Rabobank Bronnenarchief

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