IVACE is a Public owned company which belongs to the Government of Valencia. This entity supports the companies of the region of Valencia to Export around the world.
Testimonial
“We have been their official consultant (Antena as they call us) for Indonesia since 2016, and we have won their tender (can only work with them through tenders) three times in a row for Indonesia. From late 2019 we are also their official consultants / partners in Vietnam.
With this client we mainly provide commercial services, such as meeting arrangements, search of potential clients and partners, arrange trade missions for them every year, inverse trade missions, seminars online and presential, etc. We have worked with around 100 companies from the Valencia region since 2016 for Vietnam and Indonesia.”
EXTENDA is a Public owned company which belongs to the Government of ANDALUCIA, in Spain. This entity supports the companies of the region of Andalucía to Export around the world.
Testimonial
“We started to work with Double M to open up a market in the export of our product in Vietnam, Indonesia, Thailand, Malaysia, etc. The commercial relationship could not have been better: they prepared the agendas and trips to the countries, accompanied us on the visits, followed up on them… and managed to make the clients. The treatment on a day-to-day basis and all the procedures with our clients could not be done in a more fluid and optimized way, making each of our contacts a success”.
DEFESA is a waste management collector from Spain which focus on the collection of Old Corrugates Carton in Spain, which is then exported to the Biggest paper mills, which are mainly located in Asia.
Double M are current the agents f in Vietnam and other markets in the ASEAN region. Before starting to work with Double M, DEFESA was exporting their products only through big traders, but now they have been able to sell directly to several factories in Vietnam and other markets in Asia (Indonesia and Malaysia).
Below a quote of Borja Fernandez about his experience with Double M
Testimonial
“We started to work with Double M to open up a market in the export of our product in Vietnam, Indonesia, Thailand, Malaysia, etc. The commercial relationship could not have been better: they prepared the agendas and trips to the countries, accompanied us on the visits, followed up on them… and managed to make the clients. The treatment on a day-to-day basis and all the procedures with our clients could not be done in a more fluid and optimized way, making each of our contacts a success”.
Imabe Iberica S.A. is a manufacturer of machinery for waste management. Their main product is balers for waste such as scrap, OCC, organic waste, etc.
In Indonesia we started by a search of local partners (database), and afterwards a meeting arrangement. After these services, they requested us to be their agent, which we happily accepted in 2016. Since then we have been able to successfully close a couple of projects, and we expect to get the third by the end of this 2020.
Below you can find a quote from Mr. Javier Vega, Export Manager of Imabe Iberica S.A.
Testimonial
“Imabe Iberica, as manufacturer of balers and waste management equipment, always faces challenges to find our potential customers in developing countries. Scrappers and OCC (Old Corrugated Carton) collectors normally don’t have webpages and are very difficult to find. Thanks to the outstanding work of Double M, we were able to get in touch with the main OCC collectors as well as the big scrappers of Indonesia.
After this work, we knew we could trust in Double M, so we appointed them to be our agents in the country. After the years, they have been able to open the market for us closing the firsts sales, as well as keeping us updated of all relevant projects. We are very satisfied with their work and we recommend them to any company who wants to start to sell or commercialize their products in Indonesia.”
They are the first client that trusted in Double M agency services to develop their business in Indonesia and South East Asia.
Prior to working with Double M, Wisco did not have any clients in ASEAN countries. After 5 years working with Double M in ASEAN, these are the results:
• Market leader in Indonesia and Philippines, with a market share of approximately 50% in both countries. • Wisco Group also has regular clients in Singapore & Vietnam and has become a trusted partner of the biggest bronze stockist in the region.
Testimonial
“Double M helps us to get close with the client and give us speed in the response. They also provide trust and seriousness with proven results, which have lasted over the years.”
Ordesa offers nutritional product for children and adults
Ordesa Laboratories is using a unique service made by Double M , which was designed to solve the barriers and difficulties that Indonesian importers impose to foreign producers. The milestones achieved with Ordesa are:
The Ministry of Agriculture of Indonesia has approved Spain to export dairy products to Indonesia. This is a very complex Government to Government (G2G) approval to get.
Obtaining all specific licenses to import dairies.
Agreement with one of the main distributors in thecountry.
Making a detailed business plan.
Detailed selection of the ideal selling-point for the product launch.
Team recruitment and development.
Accounting, tax, payroll, legal handling.
Complete HR consulting.
Testimonial
“Double M Indotraders has made our entry into the Indonesian market possible, an entry full of challenges that would not have been possible to overcome without their support.”
Differences between a European partner and an Indonesian Partner
Whether it is an importer, a distributor, a factory or a commercial agent, in every FDI it is crucial to engage with a reliable partner. You need an agent who will guide your product in an unknown market for you.
To set up a business with an Indonesian entrepreneur is not the same as to set up one with a European entrepreneur. Cultures are different and so are, subsequently, personality and character. Truly, every person is different, but there are certain features which can be highlighted as general differences between Europe and Indonesia:
When a European manager lays an offer on the table, we normally wait for a fast response, whether our counterpart is interested or not. In Indonesia, we need to be patient as the answers will not be reached soon and it does not always mean they are not interested, but simply that they take their time to respond.
Another situation where a European will need to be patient is with the Indonesian punctuality. With a population of over 270 million of inhabitants, and a surface of 1.904.569 square kilometres, life and traffic are quite hectic in Indonesia, especially in big and metropolitan cities like Jakarta where traffic can hold you up for one hour easily.
Another noticeable difference is the way business is done. In Europe an agreement could be closed in a single meeting. Unlike in Europe, in Indonesia more meetings are required before a closure takes place.
The first meeting could be defined as a ‘getting to know’ meeting. If the new Indonesian partner is interested in the idea, he will request a second meeting. But this is usually an informal meeting, a dinner invitation for us to say. This second meeting gives you the opportunity to earn his trust. Indonesians are very sociable people and they like to run their businesses with “friends” so it is recommended to be open and honest with them.
Beware that with so many meetings, sometimes it is easy to skip relevant information so it is important that before closing up the meeting, every issue discussed is summarized and noted.
Indonesian people are subtle people. If there is something they dislike or do not want, they will not say it to you directly. When doing business, if they are not interested, they will either not reply or they will let you know they are still thinking about it.
Moreover, Indonesians are curious people so do not fear if they ask personal questions during a meeting. Questions which could be indiscrete in Europe, are completely normal in Indonesia.
Finally, it is very common to do business through WhatsApp, even more usual than via email. It is a way to prove closeness. Email is considered a colder way of communication and they usually take more time in being answered.
Indonesia stands as the first economy of Southeast Asia and as the fourth most populated country worldwide. Moreover, its and active member of the G-20, and according to the OECD, it is the fifth emerging country in the world, after China, India, Brazil and Russia.
The country is wealthy in raw materials (oil, gas, mining, palm oil, etc) which represents a substantial part of its exports. Hence, the national economy is influenced by the evolution of international prices of these products.
This mentioned, it is a very protectionist country in certain economic sectors. However, it offers many business opportunities, which is something Spanish companies are realizing. We will highlight four key sectors open to import where companies could be competitive.
Machinery in the primary sector
The primary sector is characterized by being an essential part of the Indonesian economy and by generally having low technical qualification in agriculture, livestock and fishing. Indonesia is one of the world’s largest producers of products such as palm, cocoa or tea in the case of agriculture, tuna or shrimp in aquaculture, and coal or nickel in mining.
Machinery in the industry sector
The industrial sector also plays a key role in the economy with a contribution of the 39.73% of the GDP in 2018. The industrial sector with most weight in Indonesian economy is manufacturing. In subsectors such as automobiles, textiles or tobacco, as in the primary sector, Indonesia has a clear advantage due to cheap labour despite little development in capital goods.
Infrastructure and Construction
The Government is also committed to the investment in infrastructure with the aim of improving land, air and maritime communications in the country. According to Bloomberg, from 2014 to 2018, the annual investment has practically tripled to reach €26,000 million and they have eased the legislation to encourage foreign private investment. In the case of the construction sector, the country is rapidly urbanizing and the Government estimates that approximately 800,000 homes are needed annually to meet demand.
Electronics and Fintech
Indonesia is the fourth country in the world by number of internet users, with a very active population in social networks and an increasingly growing activity in online shopping. According to Statista, it is estimated that the number of users in social networks will exceed 100 million in 2023 and the penetration of e-commerce will reach 77% in 2024.
Other sectors such as consumer goods could be interesting depending on the type of product, although factors inherent to the consumer’s profile should be taken into account here, such as a predominantly Muslim population which consumes mostly through traditional channels. However, imported products gradually find a gap between certain segments.
“The first bilateral trade agreement with a Southeast Asian country” – Juncker, 2019
On the 19thof October 2019, the EU signed the first bilateral trade agreement with a Southeast Asian country: Singapore.
Singapore is the EU’s 14th largest trade in goods partner and the EU’s largest trading partner in the Association of Southeast Asian Nations (ASEAN). It represents nearly a quarter of the total EU-ASEAN trade in goods.
This Trade Agreement also known as the “new generation” agreement, includes commitments on safeguarding intellectual properties, liberalising investments, public procurement, competition and sustainable development.
Regarding investments, both parties have strong ties. The EU is the largest investor in ASEAN with more than half of its investments taking place in Singapore. This, constitutes more than a quarter of Foreign Direct Investment in Singapore coming from the EU-members. The Investment Protection Agreement (IPA) will replace all the existing EU Member State-Singapore treaties concerning this matter and will gather them under a single set of rules.
Topics covered in the FTA
Both parties agreed to ‘eliminate custom duties’. Singapore commits to remove all tariffs on certain products such as, alcoholic beverages and maintain the current duty-free access to other EU products.
In order to ‘ease regional and global value chain’, the FTA offers flexibility in the “rule of origin”. This is, each part can source some parts of their products from third countries, not avoiding however, the minimum conditions agreed on the qualification of the products.
Businesses that will benefit from the ‘removal of technical and non-tariff barriers’ cover a wide range of sectors but the followings ones can be highlighted as being the key sectors in this FTA:
Electronics:Under the security of intellectual property rights and the International E-Commerce Standards, information will be able to flow freely both ways.
Motor Vehicles and Vehicle Parts:The EU will be able to sell new motor vehicles and car parts without additional testing or certifications (always under the International Regulation).
Pharmaceuticals and Medical Devices: It is one of the EU’s most important exporting industries. It generates a year surplus of over €60 billion. Now, it will also be able to offer its goods and services to Singapore in a transparent and non-discriminatory procedure of listing, pricing and reimbursement of products.
Renewable Energy Generation: This is the first time Singapore accepts to open up its restrictions regarding this concern. This action enables EU companies to invest in this sector without the fear of Singapore safeguarding its domestic development in this area.
Animal and Plant Health and Hygiene:Reducing the non-tariff barriers will enable to trade raw or processed products of animal (meat and meat products) and plant origin (fruit and vegetables) in an easier way.For example, an inspection of the other party’s plant or abattoir will no longer be necessary because an evaluation of the other’s inspection and certification system will be enough to safeguard the hygiene and health of the products.
‘Protectingintellectual property rights’ was another main concern. Copyright, trademarks, geographical indications, test data protection, Doha Declaration and enforcement will be strengthened. This will mean that products registered in Singapore, will benefit from the same level of protection as if they were in the EU.
Furthermore,‘Sustainable Development’ issues were also handled. The aim is to ensure domestic standards of labour and environmental protection in aspects such as corporate social responsibility, sustainability assurance schemes…
Another key point concernsthe‘Investment Protection Agreement’. The objective is to procure higher protection in investment matters, public health, safety and environment. It also discusses the setting up of a fully independent dispute resolution system.
The EU-Singapore Partnership and Cooperation Agreement (PCA) was also signed.The objective is to strengthen the foundations of a mutually-beneficial cooperation in fields such as science, engineering, computing, air service, maritime transport, telecommunications, among other sectors. Hence, it tries to give the chance of widening the market for EU companies in Singapore. Nonetheless, even if the ties are strengthened, each party will carry on establishing its own quality and safety standards.
Other aspects such as ‘enhancing custom operations’ or ‘bringing new tendering opportunities for EU bidders’ are also regarded in the FTA.
Spain in Singapore
This FTA will expect to imply a boost for Spain’s trade in a €350m of revenue. It is also expected that Spain will gain €586m in export value and €236m value in imports from Singapore.
Approximately 3,705 Spanish companies and 44,000 workers are expected to be positively impacted by the deal.
Spain’s main exports to Singapore are wind turbine parts, wine, fire hoses, ceramic tiles, car parts, glassware, stoves among others.
As regarded, this FTA will lead to new opportunities to Spain and the rest of the EU countries in Singapore and may become a bridge to future Trade Agreements with the rest of the ASEAN countries.
