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Indonesia

port news
APRIL, 2006

UPTHE WORLD
MARKET

Published by:
NATIONAL AGENCY FOR
EXPORT DEVELOPMENT (NAFED)
MINISTRY OF TRADE
Table of Content

Message
from the Editor’s
Desk

Message from the Editor’s Desk 2

INDONESIAN EXPORT GALLERY


Most Countries are Exporter,
Importers 3

Product Development In The World 4

Whereares Its
The Target Markets Are 6

INDONESIAN EXPORT BRAND


PT Keong Nusantara Abadi 7

INDONESIAN EXPORT ICON


Cassiavera 9

Published by : The Ministry of Trade, Republic of Indonesia, National Agency for Export Development (NAFED)
Advisor : Acting Chairman of NAFED : Mr. Hatanto Reksodipoetro Chief Editor : Mr. Rahayubudi
Editor : Djasdi Darwis, Sri Maryani Consultant : CV Kopan Jaya Reporter : TB Machroja, Donawati, Tiara Lumban
Gaol Layout : Xi-ant Design Address : Jl. Kramat Raya 172, Jakarta 10430, Indonesia Phone : (62-21) 3100569 ,
31904774, Facsimile : (62-21) 31901371,31901470 Website : http//www.nafed.go.id e-mail: nafed@nafed.go.id
Kicking up
the world market

W
hen it comes to both importing and
the international exporting sporting
specialization in goods -, the issue is
trade of sporting to go deeper into the
goods, what one can come across most detailed SITC
to see, is the absence of inter- product classification.
country comparative studies. Then, it is crystal-
Since the crux of the matter is to clear that, for a country,
analyze how countries specialize the advantage of
in the intra-industry trade – all the exporting (importing)
listed twenty-eight countries are winter sports goods on

Indonesia Export Gallery 3


as, say, sportswear, tracksuits,
balls, swimsuits, and sporting
footwear.The first group contains
goods with high unit of value,
due to significant added value
in the process of production, a
somewhat sophisticated and
evolving technology and know
how, whereas the latter group
consists of cheaper goods (per
unit) with a lower added value,
which are produced with a
mature technology and an
easily transferable know how.
one hand, and balls or sportswear Moreover, value of high unit
on the other, does not have the of sporting goods is usually
same economic values and exert required for the practice
the same impact on its trade of specialized equipment-
balance. Looking at their unit value intensive sports such as sailing,
in the foreign trade, skis, ski boots, winter sports, surfing, motor
sailing boats, windsurfs or golf sports, or golf. Lower unit
equipments cannot be categorized value of sporting goods is less
as the same sorts of sporting goods specialized and can be used

PRODUCT DEVELOPMENT IN THE WORLD

whenever a person is asked to draw a soccer ball,


one will most likely come up with the ordinary 32
panel black and white ball. Still many of today’s
design sticks to this traditional color-code,
although top technology ball like the recent
Official World Cup Match Ball looks entirely
different.
As ball design trend goes, it seems there is
not just one ball design. Especially for the latest
World Cup, the latest technically improved
ball replaces the previous one aiming at more
precision and less fluctuation in weight while
played and creates another opportunity to
display the latest trend in professional soccer ball
design. Many people like to treat a soccer ball as
a canvas (FIGURE 2). A soccer ball nowadays has
a wide variety of designs and colors. Not only is
soccer ball used for a soccer game, but as well, its

A
s the world knows, soccer ball’s shape function has changed into souvenir or ornament.
and design is round with black and white Its soft textured layer has prompted designers
squares on it (figure 1). It means that, and artists to create easier some pieces of art.

4 Indonesia Export Gallery


WHEREAS ITS TARGET MARKETS ARE:
Asia, Australia and New Zealand: Africa & Middle East: America and Europe:

1. Japan, 1. United Arab Emirates, 1. United States,


2. Singapore, 2. Sudan, 2. Germany,
3. Republic of Korea, 3. South Africa, 3. France,
4. Australia, 4. Egypt, 4. Belgium,
5. Malaysia, 5. Saudi Arabia, 5. Netherlands,
6. Pakistan, 6. Venezuela,
7. India, 7. Panama,
8. Thailand, 8. Brazil,
9. China, 9. United Kingdom,
10. Taiwan, Province of China, 10. Spain,
11. Austria,
12. El Salvador,
13. Peru,
14. Mexico,
15. Canada,

in wider range of sport practices France in 2005 imported 235 tons Japan, Malaysia, Philippines,
(gymnastics, walking, body building, of sport equipments from Indonesia Singapore, South Korea, Taiwan, and
keeping fit, team sports and track totaling at US$1,463,000. As big Thailand). The remaining 25% of
and fields) or even on leisure time importer for the product, it has global trade shares is concentrated
without any sport practice (for launched a publication on analysis of in Switzerland, Eastern Europe, some
example: sportswear, track suits, the product development. It reveals Asian countries (Pakistan, India,
sporting footwear). that 75% of the global of sporting and Vietnam), Maghreb (Morocco,
With this categorization in mind, goods trade encompass three NAFTA Tunisia), and the Latin American
one can switch to a more detailed countries (Canada, Mexico, and USA), (Argentina, Brazil) countries. Among
qualification of product specialization the fifteen EU countries (as of 1995, the sampled countries, in 1994, the
within the international intra- after the fourth enlargement), and ten major sporting goods exporters
industry trade in sporting goods. ten South-Eastern Asian countries were the USA, China, Hong-Kong,
Unfortunately, up to now, such (China, Hong-Kong, Indonesia, France, Austria, South Korea, Japan,
research in detail is just
conducted once at the country
level, examining the foreign
trade of sporting goods in one
particular country, without
international comparison.
Indonesia, with the total
export value of US$3,283,000
in 2005, is many of which
has met the world’s demand
for Soccer Ball. Soccer Ball
as part of the Inflatable balls
sub-product (Indonesia
Harmonized System No.
950662, the local SITC system
in Indonesia) has made
15.53% contribution to the
whole product demand of
equipment for general physical
exercise.

Indonesia Export Gallery 5


Italy, Germany and Canada; the ten Croatia, as well as Italy, Spain, and
major importers were the USA, Japan, Portugal;
Germany, Hong-Kong, Canada, • French exports of ‘trite’ sporting
France, the UK, Italy, the Netherlands goods are geared towards European
and Spain. developed markets, namely Germany,
In order to complete analysis of a Italy, Belgium, and the UK.
country’s international specialization
in sporting goods trade, some All Asian countries were the net
information is needed on where exporters, except Japan, Malaysia,
exports are flowing and where and Singapore, including those non-
imports are coming from. In the case sampled countries such as Pakistan,
of France, the major trade partners India, Sri Lanka, and Vietnam
are: (according to circulated information).
• The USA, Japan, Germany, Italy, The very high value of the export/
Switzerland, Belgium, Sweden, import ratio in South Korea,
Canada, Austria, the UK as regards Indonesia, China, Thailand, and the
to major exports of “equipment- Philippines was the other side of the
intensive” sporting goods; coin with regard to the relocation
• Italy, Austria, Switzerland as of the sports goods industry from
regards to major imports of developed countries. Maghreb
“equipment-intensive” sporting countries were not net exporters
goods; either since they were privileged
• Eastern and Southern European, location for outward-processing trade
South Asian and Maghreb in the textile-clothing and footwear-
countries as regards to major leather industries, including as far as
imports of ‘trite’ sporting goods, the production of sportswear and
namely Morocco, Tunisia, China, sporting footwear are concerned.
Thailand, Pakistan, South Korea,
Hong Kong, Taiwan, Indonesia, the Areas of articles & equipment for sports
Philippines, Malaysia, Hungary, productions in Indonesia are:
Poland, Czech Republic, Romania, • Special Province Jakarta
• West Java
• East Java

6 Indonesia Export Gallery


PT. Keong
Nusantara
Abadi
P
T Keong Nusantara Abadi, which was form Franch, Japan, Taiwan, and Bogor, help PT
founded in 1986, produces escargot Keong Nusantara Abadi in the implementation of
meat, nata de coco, and aloe. The the Quality Management System. It is no surprise
company, which is located on Jalan that Wong Coco is mostly sought products and
Raya Branti Km. 18, Village of Bumisari the consumers delight in the brand albeit pricy
RK II Natar, Lampung, has a unique history. Thanks compared to the other brands.
to his acquaintance with Taiwanese businessman In the brand development, it adopts the strategy
in 1983, Lampung based businessman, Rudy which has relation with the 4 (four) P principles
Joncer came to decision to go into the escargot
business with an export orientation. Rudy started
his venture in 1984 by setting up a new escargot
processing factory in Lampung. Known as a
disgusting thing, the escargot turns out to attract
people’s interest and people in Europe and the
USA.
At present, PT Keong Nusantara Abadi has
been spearheading special products using
swallow nest with “wong coco” brand. It is ignited
by foreign market condition and the raw material
which is abundant in the country. Indonesia has
taken control of the world’s swallow nest export
70-80%. However, the export is in the form of raw
material and no export uses Indonesian brand,
but Singapore, Taiwan, and Hong Kong’s.
PT Keong Nusantara Abadi has mission and
commitment to give satisfaction to the customers
by supplying highly hygienic and high quality of
products. In 2000, PT Keong Nusantara Abadi
received Certificate of International Standard
ISO 9001 from the Agro Bases Industry Quality
Assurance (ABIQA). Some experienced experts

Indonesia Export Brand 7


(Product, Promotion, Price, Place). Among others
are it launches incessant promotions and keeps the
price to remain competitive. For export, it always
takes into consideration of the quality of products.
The company at present is trying to enter into the
Philippine market, which is also one of nata de coco
producers. But it seems the country pays less attention
to the quality. It proves that Japanese buyers who
used to buy nata de coco from the Philippine shift
their orders to Indonesia and Thailand. The company
works in cooperation with agencies in Singapore,
makes a better design. The Wong Coco product
through the agencies in Singapore in December
2004 won design award in New York during a trade
fair of Summer Fancy Food Show 2004.
As market has known the brand, consumers are
not sensitive toward the prices. Then, it can maintain
consumers’ loyalty. When PT Keong Nusantara Abadi
launches new product, consumers will have high
confidence on the new products, given seen the
Wong Coco brand. Therefore, the Wong Coco brand
is an indirect entry barrier for the new comers in the
market.
By total volume of sale increase, it can enjoy the
economy scale. PT Keong Nusantara Abadi can make

8 Indonesia Export Brand


products with lower costs without sacrificing the quality.
Accordingly the local as well as foreign consumers could
enjoy economical price and from the corporate side, it
can boost its income and competitive edge.
The way to market branded export products is to forge
cooperation with the branch offices or distributors in the
destination countries, making strategy and programs in
accordance with the related country’s market condition
without changing the product’s image and position.

Examples the company has taken:


Forging cooperation with the local supermarkets to
stuck the Wong Coco products out by hiring spaces
and giving samples for free,
Launching TV advertisement in Singapore in November
2004 in an effort to stay closer to the local consumers,
Printing posters/banners which are distributed to the
shops selling Wong Coco products.

To face with harsh competition on products made in


the export destination countries, it always learns the
competitors’ products superiority and weakness from the PT KEONG NUSANTARA ABADI
sides of 4P (Product, Promotion, Price and Place). Based
on the analysis, the company together with distributors PRODUCT :
in the export destination country makes strategies to face Canned Escargot Meat, Nata de
with competitors. By evaluating and increasing efficiency coco, Aloe
in the factory, PT Keong Nusantara Abadi takes effort to
make competitive products either its pricing or quality. BRAND : Wong Coco

Indonesia Export Icon 9


Cassiavera
C
innamon or cassia vera
has been known for quite
long in Indonesia. It is
Indonesia’s indigenous
plant, having long
age and growing in the country’s
forests. Cinnamon stems from
Cinnamomum burmanni varieties.
Other variants of Cinnamon were
initially brought from Sri Lanka and
South India to Java Island in 1825
and other variants as Cinnamomum
zeylanicum and Cinnamomum
cassia were originally from South
Vietnam and Eastern Himalayan.
Cinnamon is one of the plants
nationwide used for reforestations
and declared under state
protection. It can grow on lands
with the height of 2,000 meters
above the sea surface, depending around 70-90%, and needs 40-70% others atsiri, resin, glue, tanin,
on its varieties. The best climate sun beam. It grows at the height of sugar, oxalate calcium, insecticide,
for cinnamon’s growth is at the wet latosol soil with tilt topography, soil cinnzelanol and cumarin. Inside
tropic with annual even rainfall acidity of 5 to 6, and deep water. atsiri oil there are still some chemical
from 2,000 to 2,500 mm in the Cinnamon is commodity having components as sinamat aldehida,
whole year. Areas surrounding the a high economic value with a eugenol, aldehida, benzil-benzoat
plant have average of temperature minimum treatment. The chemical and felandren.
to 25 Celsius degree, humidity contains in its bark are among The main crop of cinnamon is
its bark. The way of harvesting is
by cutting off the tree or peeling
directly its bark. The standard
quality of cinnamon is determined
by the techniques of harvesting:
either its age, time, system, or
cropping, bark peeling, as well as
drying. To get cinnamon ready for
trade, there is a processing. The
products of cinnamon are traded
in the forms of cinnamon bark,
atsiri oil, oleoresin, and cinnamon
powder. Cinnamon bark is
produced by drying until its weight
is decreased by 50%. The atsiri oil
is acquired from distillation of its
branches and leaves. Oleoresin is
from leaves, cambium bark, branch

10 Indonesia Export Icon


embalming mummy, cinnamon can be processed
into cinnamon bark oil for food, antiseptic, cosmetic,
soap and component of traditional herbs. It could
replace other plants as cloves, coffee, and rubber.
At present, cinnamon bark is used for cooking
spice of various foods from sweets to curry.
Most American and European foods and cakes
use cinnamon spice to make dissert, pastry and
biscuit. In some countries as India, Morocco, and
Greece, cinnamon is the main food components.
Its bark powder could extraordinarily enhance
food tastes and flavors as Indian curries, Moroccan
tanginess, apple pie, Mexican hot chocolate, and
rice pudding. Children like delicious cinnamon
sugar which is put onto doughnut and baked
bread with margarine. Recent research reveals that
consuming 1½ tea spoon of cinnamon daily could
reduce blood glucose, cholesterol and triglyceride
contains.
West Sumatera is the world’s main producer of
cinnamon derived from Cinnamomum burmanni
variant which is named as cassiavera. In 2005, it
recorded US$ 20.3 million in cinnamon export.
In the international trade, cassiavera is known for
“padang kaneel” or cassiavera from Padang. Foreign
and twig bark, which are extracted by using solvent consumers like West Sumateran cinnamon because
substances as acetone, hexane, methanol and it has a typical flavor. Beside West Sumatera,
isoprophanol. The secondary cinnamon product is cinnamon is found as well in Jambi, Bengkulu,
obtained by milling or sawing cinnamon resulting North Sumatera, South Sumatera, Central Java,
in cinnamon powder. Lampung, South Kalimantan, North Sulawesi, East
Despite for cooking spice and beverage, Java, Gorontalo, South Sulawesi, and West Java.