'Rabobank is the only foreign bank in Indonesia
that can combine commercial flair for SMEs with
international standards for delivery.'
Strategie approach
International opportunity
Rich in natural resources, Indonesia has the largest economy in South-East
Asia. The country's exports include palm oil, rubber, coffee and cocoa beans,
whilst its imports include sugar, corn and wheat. Indonesia's F&A trade
amounts to US$ 23 billion and is higher than Australia, Brazil and Argentina,
giving the country a strong competitive advantage. Contributing to 15% of
the GDP, F&A clearly plays an important part in the country's economy.
We asked Tony Costa, CEO of Rabobank's Indonesian portfolio since 2003,
to teil us more about the Indonesian F&A market. 'Jakarta and the surround-
ing areas are the major markets for food products, and Java is the centre
for most food production. More and more, however, we're seeing the outer
islands - Sumatra, Kalimantan and Sulawesi - growing in production. With
continued investments in value-add capacity, structural changes in sup-
ply chains, increasing consolidation activities and proactive government
initiatives, we're expecting explosive growth in food production there in the
mid- to long-term.' The future in Indonesia, then, looks bright. No wonder
Rabobank looked here when considering strategie expansion in the region.
Rabobank's acquisition strategy has traditionally focused on three major
areas: fjrstly, developed, agricultural countries such as the United States
and Australia; secondly, Central and Eastern European countries, especially
recent EU-joiners; and thirdly, emerging markets with large agricultural
sectors, such as Brazil, China, India and Chile. Indonesia clearly fits into the
third category.
In terms of Rabobank's ambitions in Indonesia, Costa states that 'we want
to be the bank of reference in providing full fïnancial solutions to the F&A
business chain and SME sector in Indonesia. We see ourselves going forward
as a mid-sized universal bank, combining extensive local presence with
international best practices and reputation.' Most important in realising this
ambition is Rabobank's F&A 'cluster approach'. This links large corporate
clients with their suppliers, clients and employees,
creating a network of SMEs with local expertise.
Rabobank's unique selling point is that it is the only
foreign bank in Indonesia that can combine com
mercial flair for SMEs with international standards
for delivery.
Although the banking sector is growing by
around 20-25% each year, the number of banks
in Indonesia is expected to decrease. The govern
ment is encouraging smaller banks to merge and
grow bigger, which means that in future there
will be larger banks that are fewer in number.
Opportunities for foreign banks to invest are
therefore on the up - 40% of banking assets are
now controlled by foreign investors. With an
expected reduction in the number of banks from
130 to 50 over the next four years, it's more than
likely that several small banks will be in the market
for foreign investment.
PT Bank Rabobank International Indonesia (Rl
Indonesia) was created in 1989, the same year that
Hagabank and Bank Flagakita were established.
The two banks are relatively small and benefit
from common shareholders, procedures, IT sys-
tems and services. Costa, the new CEO of the two
banks, as well as Rl Indonesia, is optimistic: 'the
banks are already well-run and highly professional;
their existing systems make a good platform for
us and they have the same strategy and mind-set
The Word I 9
