Hendra Lesmana – Country Manager, John Crane Indonesia
The country manager of John Crane Indonesia highlights the significance of after-sales services in the hydrocarbon market in order to be recognized as full solution provider. Furthermore he explains that the low commodity prices offer unique opportunities for companies engaging in a counter cyclical strategy.
John Crane constitutes one of the world’s leading providers of engineered technology for mission-critical operations in oil and gas. Could you please start by introducing the scope of your activities across the Indonesian archipelago?
Globally, John Crane offers a broad portfolio of products for critical and challenging applications across the energy services sector. Our expansive range includes engineering sealing solutions and support systems, hydrodynamic bearings, specialist filtration systems, power transmission couplings and artificial lift solutions. Combined with our technical expertise and innovation, geographic reach and superior quality standards, our products offer energy-sector clients the reliability, efficiency and constant uptime, needed for the demanding conditions found in today’s oil and gas facilities.
Our Indonesian activities actually form part of the Asia-Pacific and Australasia zone that is overseen by our regional headquarters in Singapore. John Crane first entered the Indonesian market back in 1994 and today over 60 percent of our project workload derives directly from the oil and gas sector, although we also service other markets such as the pulp and paper processing industry. Right now, the core of our in-country business relates to the provision of wet and dry mechanical seal technologies covering the entire length of the oil and gas value chain, but we are also busy ramping up our activities in other domains such as the development of artificial lift systems.
What would you say is the relative importance of the Indonesian market to a company like John Crane?
The Indonesian market remains strategically important to John Crane because of the sheer numbers involved and bountiful opportunities for product extension and diversification. After all, few other countries can boast a national economic growth rate of upwards of five percent during these testing economic climes. As such, we maintain four in-country sales offices enabling us to deliver a service offering stretching across the full national territory.
Six weeks into your new position as John Crane’s country manager, what would you say are your core priorities and ambitions?
Taking into account the external economic conditions, we are keen to raise the commercial intensity of our operations and increase market penetration. The organic growth of the Indonesian business to date has been commendable, but we are eager to make the most of current opportunities and fully exploit any untapped potential. The plunging oil price actually affords new possibilities to those actors possessing capital and enacting counter-cyclical strategies who can take advantage of cheap acquisitions and the weakening positions of their competitors. In some respects the winners of tomorrow, will be borne out of the consolidation of the market underway today. We hope that John Crane can be part of this dynamic so are constantly on the lookout for new ways in which we can enhance our service offering and bolster our local capabilities.
One way to do this will be to focus on the provision of integrated solutions rather than individualized products and to further develop our after-sales competencies. Cognizant of the fact that today’s customers desire a one-stop solution as opposed to having to interact with multiple suppliers, we are moving much more in the direction of bundled packages that really respond to the needs of the end-users.
What is the precise value of incorporating strong after-sales competencies? And how do you go about developing them?
Building a comprehensive after-sales component encompassing asset management, on and offsite training, critical systems verification and reliability support helps to set us apart from the crowd. This is important because John Crane is positioned towards the elite end of the spectrum in terms of the sophistication and quality of our equipment so we will be competitive on the advanced nature of our offering rather than on other factors such as price differentials.
It is precisely because of the uniqueness and sophistication of our product-line that our brand is familiar to all the main operators present in the local market, but this alone does not enable us to rest on our laurels. We are, for example, aware that mechanical seal technology is readily copyable especially in a volatile and highly competitive market like this, so it is imperative to guard against complacency. The onus is therefore on us to continually identify new ways of differentiating ourselves from the competition and one pathway for doing this is by bolstering what we can deliver in terms of additional support and sustained assistance.
In these strained economic times, clients are seeking to share risks with service providers that have expertise in helping them over-coming their problems. The bottom line is to appreciate that they are demanding comprehensive solutions rather than just the component parts that can lead to the solutions. It is therefore important that our staff understand our role as a problem-solver as opposed to mere equipment supplier. This is the sort of corporate mindset that I am busy endeavoring to instill within John Crane. Then, in terms of communicating with our clients, my priority is to covey the message that we deliver a far better tradeoff between project reliability and upfront price than anyone else out there in the market.
You’ve spoken about the wisdom of deploying a counter-cyclical business strategy during these turbulent times in the hydrocarbons market. Where do you identify the upcoming growth-spots to capitalize upon?
There are plenty of pockets of untapped potential to be found within the Indonesian market. There’s clearly going to be a lot of opportunities to support power plant development resulting from the new government’s swing towards prioritizing energy infrastructure implementation. The current manifesto commits to all full 35GW within five years and our understanding is that the bulk of this is supposed to come from private sector investment. My prediction is they will be concentrating on coal-fired power plants in eastern provinces and on small-scale power packages simply because of the scattered consumption profile of the more remote regions. These are chunks of business that John Crane can definitely target.
Then the signals emanating from SKK MIgas also give much cause for optimism. There appears to be a strong drive on the part of the state to ensure a stabilization of hydrocarbon production levels so as to shore up the oil and gas contribution to the public finances that has traditionally been pretty significant. Given the natural productivity declines in many of the legacy fields and the clear lack of progress on exploration and reserve replenishment, the need for technologies with a proven capability to reduce downtime and to enhance both reliability and efficiency has never been greater. You could say that history is on our side. The important thing will be for us to leverage these great opportunities.
What, then, will be the next steps for growing the local business and leveraging these emergent opportunities?
Astute partnership building will be decisive to our ability to make the most of these rapidly developing opportunities. From a distribution perspective Indonesia can actually be quite a challenging market to do business. There are geographical, logistical and administrative hurdles to surmount when moving equipment around the archipelago. Though we do a lot of business directly with the end users from our four sales offices, but are also reliant on local partners to help us penetrate the full array of regional markets that constitute Indonesia’s territory.
It’s important that these partners are conveying the right messages to the clients at all times and that they are adept as ambassadors of the John Crane brand. Furthermore they play a critical role in feeding us back market intelligence and helping us develop our situational awareness capabilities. This is crucial in a crowded market like Indonesia where outmaneuvering your competitors and being ahead of the game is one of the main determinants of success. My action plan for growing the business therefore entails selecting and developing high-quality partnerships.