Eni Han – Founder & Marketing Director, PT. Sigma Artha Bahari, Indonesia
One of the founders of PT. Sigma Artha Bahari, a young company acting as agent for cleaning products to the Oil and Gas sector in Indonesia, describes the challenges of selling in Indonesia and explains how her company became the best-selling agent in South East Asia.
Could you please introduce yourself and your company?
We established the company in 2007 and are the sole agent company for Indonesia, especially engaged in the provision of chemical cleaning products used in the shipping, oil and gas, mining and manufacturing industries. We realized the need in these growing market segments for high quality cleaning products as many companies import products to fulfill the gap of high quality chemical products in Indonesia. Through extensive research and networking we found the Dynamic Descaler, a US product which is distributed via agency agreements in South East Asia including a distribution head office in Malaysia. We successfully acquired the agency license and started distribution in Indonesia. Ever since, we have grown significantly, winning big players such as Chevron, Total, Pertamina, and Star energy as clients.
What is the Dynamic Descaler?
The Dynamic Descaler is used to remove scale from any surface, however the application may vary flexibly depending on specific equipment, layout and other factors. As an example, the application for a cooling tower is very different from the application for a compressor, yet easy to handle with 100 percent impact.
What are the main assets of the product?
A major advantage of our product is that it pairs health and safety standards with environmental standards on an international level: it is not hazardous; it is biodegradable, non-corrosive and saves time and money for our clients.
However, as it is an American product of premium quality we have a premium price. Of course our domestic competitors are much cheaper and often we face a long explanation and convincing period before winning a client. Indonesia, as a developing country, is a very price sensitive market which is why we usually need 1.5 years to convince and prove to our clients that we have the best product available on the market. It is often not easy to convey the message, that in the long haul we are the cost saving product as there are no recycling costs and no costs associated with mechanical removal while we provide 100 percent scale removal which helps preserving the unit cleaned and prolongs its life span.
In order to reduce the long sales process, we have increasingly started to engage in advanced marketing activities. So far, as a very young company, we are reliant on word of mouth and free trial offerings.
What is the strategy for selling the product in Indonesia?
Indonesia is the last market where the product has been launched, yet in terms of revenue, it is the most promising in South East Asia. Firstly, Indonesia is the fourth largest country in the world by population with a relatively low cost of labor, yet has a highly educated workforce which attracts many international manufacturers from various segments. Secondly, it is at the forefront of the global oil and gas industry with many—if not all—major oil and gas players present in the country. This combination creates a huge demand for niche suppliers like us.
Currently sixty percent of our clients are in the oil and gas industry and we expect that number to grow in the coming years, as we have not yet tapped into the whole oil and gas value chain, including the different supporting industries in the upstream and downstream sectors. Therefore, our current focus lies on further realizing the potential and opportunities the industry has to offer us.
How fierce is the competition in Indonesia?
The market is saturated. There are many domestic players, license and franchise takers, and sometimes our potential clients are our rivals as well, because often our clients have their own cleaning products or have had products imported from their home countries. The domestic competition however is not a challenge to us, as we make it a point to cater to the needs of our clients faster than any domestic competition. Our team will respond rapidly to any enquiry – which sets us apart from our Indonesian competitors who usually need longer to reply. Responsibility and accountability are values held high in our company. Our clients value this mindset and thus stay with us for a long time.
How receptive is the oil and gas sector to this innovative product?
Generally speaking, our clients have been very receptive to our product. Nonetheless we had some convincing to do as the decision making process of these global players is relatively slow. The first challenge we always encounter is that our clients need to be convinced that our premium price is economically feasible; the second challenge is to build up a relationship which positions us as a prospective long term partner, rather than a one-time supplier. This includes showing that we are reliable and accountable. Once the latter was accomplished we have never lost a client.
The oil and gas industry is currently experiencing a very low oil price, which has led to lower spending from a lot of players in the industry. Has this affected your business?
No it has not; actually it has enhanced our business. Our product is a necessity to our clients as it is needed as long as the business is running unconnected to the oil price. Nonetheless we noticed a change in mindset towards cost saving due to the low oil price which positively affected our business. It is proven that our product prolongs the life span of the respective units, leads to less maintenance and thus helps our clients to save costs in the mid and long term.
Are there plans for diversification in the future?
We recognize the risks associated with dependence on one product and at first glance diversification seems to be the logical next step. Nonetheless, we are confident in our current product and therefore solely focus on growth surrounding it— which we see as the sustainable path. Our plan is to start manufacturing the Dynamic Descaler in Indonesia as our client base growths. Starting to manufacture has many benefits: it will allow us to enter the market with a more competitive price as we will not import complete units anymore, we will be able to lower storage costs, and we will provide more employment opportunities in our community.
What is your vision for the next three to five years?
We want to further create brand awareness through the industry in order to realize the full growth potential it offers. Additionally, I would like to see the realization of our manufacturing plant which will steady our position as number one in the market.