Forums and Chat for Indonesia's English-speaking community
Topic Options
Rate This Topic
#27573 - 12 Mar 06 15:06 Indonesian Joint Venture Company
Happy Camper Offline

Registered: 09 Feb 06
Posts: 7
Loc: Jakarta
Once there was an Indonesia Chicken that went to New York City on holiday. His first day there he is cruising down 42nd street and he happens to run in to an American Pig, they strike up a friendship and off they go with the American Pig being the tour guide for the Indonesian Chicken. After several days of site seeing the Indonesian Chicken says he is about ready to return home to Indonesia and tell the American Pig that maybe if he was not busy to join him on his return trip to Indonesia.

The American Pig says ”What would I do there in Indonesia”
The Indonesian Chicken says “Come and stay with me and may be we could setup a joint venture company together”
The Amercian Pig says “It sounds interesting but what kind of business would we set up?”
The Indonesian Chicken says “ Of definitely with the way Indonesians love to eat, we could setup a joint venture in the from of a restaurant”
The American Pig says “What would sell at this restaurant”
The Indonesian Chicken explains that would be simple “Every day I will lay the eggs to sell and everyday when we need a little ham we could just “slice a little off of you”
The American Pig thinks about this for a little while and then tells the Indonesian Chicken “ Well that seems ok for you since you can lay eggs everyday but once you cut so much ham off of me, sooner or later I will die”
The Indonesian Chicken responds that “Yes that is true but that is eventually what happens to all foreigners that are joint venture partners.”

#27574 - 12 Mar 06 19:11 Re: Indonesian Joint Venture Company

so cynical ... so true wink

#27575 - 13 Mar 06 06:46 Re: Indonesian Joint Venture Company
KuKuKaChu Moderator Offline
Pooh Bah

Registered: 09 Oct 05
Posts: 10791
Loc: Centre of the Universe
i've established over 300 PMA companies in indonesia since 1997, and my position has always been to advise clients *never* to enter into what indonesians call "joint ventures". unless absolutely necessary, and then only if the majority of shares are owned by the foreigner, and the foreigner weilds effective managerial control over the company.

i sometimes pick up some good money cleaning out parasites from PMA companies gone bad ...

JVs? one word: don't
KuKuKaChu: dangerously too sophisticated

#27576 - 13 Mar 06 06:47 Re: Indonesian Joint Venture Company
Polar Bear Offline
Pujangga Besar

Registered: 23 Nov 05
Posts: 6177
It’s a fair allegory.

I heard similar stories about making JVs with China about 15 years ago. A lot of companies waded in like “bar room brawlers”, convinced that the Chinese were stupid and that Westerners were Gods sent from heaven to help poor China.

Most of them got ripped off. A JV is a joint venture, not some way for a Western company to make a quick killing and move on. The Chinese reciprocated by copying the Western products and ending the JV. An attempt by a Western company to make a quick killing was met by a Chinese company making a quick killing.

But you know, a lot of companies saw JVs as long term partnerships. They built up relationships, and treated the partner as an equal.

The most successful JV is where both partners bring something of value to the other. The Bharat Forge JV with Chinese car maker FAW is a good example. FAW’s core business is not forgings and castings, it is the manufacture of automobiles. On the other side of the coin Bharat Forge doesn’t make cars, it is a forging and casting company. There is synergy, but not competition.

The next Volkswagon Golf that you buy will probably contain components manufactured under the BF/FAW joint venture agreement.

#27577 - 13 Mar 06 12:31 Re: Indonesian Joint Venture Company
Polar Bear Offline
Pujangga Besar

Registered: 23 Nov 05
Posts: 6177
Laptops are not a big investment. The RAM for the Enterprise server for prototyping was expensive though!

my biggest "expense" is my time and IP.

Yes, i trust my partners. I would not have a partner I didnt trust.

#27578 - 16 Mar 06 21:09 Re: Indonesian Joint Venture Company
Polar Bear Offline
Pujangga Besar

Registered: 23 Nov 05
Posts: 6177
I think, upon due reflection, that any investment in Indonesia is foolhardy at the moment, and for the foreseeable future.

This is nothing to do with trusting joint venture partners, but is connected with political changes over the last 12 months. The new “porn laws” are just the latest in a string of gradual restrictions, bringing a de facto version of Sharia law to Indonesia. Ache has had full Sharia Law for almost six years. Now Cianju and Tasikmalaya have started new ‘familiarisation” of Sharia Law, “educating” women on the need to wear headscarves in public etc. In Bandung 25 Christian Churches have been forced to close in the last year alone . In Tangerang, the local government have just banned the sale of food during Prayer times on Friday. In Batam, the police have started approaching girls in short skirts and warning them about dressing ‘provocatively”. In Jakarta, the sale of alcohol in supermarkets is now forbidden. Brothels, massage parlours and bars are constantly being raided by the police.

Meanwhile in Papua the giant Freeport mine descends into chaos, with four police dying today in more clashes with protesters.

If I had to make a prediction, I would say that most Westerners will be out of Indonesia within 3 years, and breakaway states will be fighting civil wars well before then. It will make 1998 look like a storm in a teacup.

Indonesia used to be a fun, tolerable country with a majority Islamic population. It is rapidly moving to a hard line 1980s Iran style Islamic state. Most westerners got out of Iran by 1982. it took just 3 years. I think Indonesia will go the same way. Why would you invest in such insanity?


Moderator:  NetCop