http://www.ft.com/cms/s/0/0f8f7724-4b18-11de-87c2-00144feabdc0.html?nclick_check=1
Indonesian cement fosters green shoots By John Aglionby Published: May 28 2009 03:29 | Last updated: May 28 2009 03:29 Sari Widyastuti, a 33-year-old middle manager at an agro-industry company in the city of Bandung in West Java, has been looking for a new job for four months. This is four times longer than it took her to find her current position. "There's just nothing available at the moment," she says, asking that her real name not be used. "Every reply is the same; 'Thank you for your interest, we'll be in touch when an opening emerges'." Ms Sari does not dislike her work. "But I'm ambitious and if I want to succeed then I feel I need to get experience in another sector. That's what worries me, my inability to broaden my horizons." She also accepts she is lucky she has a job. "I'm glad I'm not coming on to the labour market this year," she says. "It's looking pretty grim out there." To say Indonesia's job market has dried up would be exaggerating. But only just. Even companies doing well, such as those making and selling fast-moving consumer goods to the 230m population, are barely recruiting. "Last year, our voluntary attrition rate was 16 per cent of the workforce," says a senior executive at one such company. "This year it's about 1.5 per cent. There just aren't the offers being made at the moment." Research by The Nielsen Company published this month will not make comforting reading for Ms Sari. Its survey found 69 per cent of people in six big cities believe job prospects in the next six months are "not so good" or "bad". Sofyan Wanandi, the head of the Indonesian Employers Association, is particularly pessimistic about manufacturing. "It's all about survival at the moment," he says. "Companies aren't firing people but they are cutting hours and pay, which obviously has multiplier effects across the economy." At the lower end of the labour market, Mr Sofyan estimates job losses at about 300,000 this year, with most of them being contract workers or those whose services are outsourced. The government estimates some 1,200 of the approximately 5m overseas workers return every day - having lost their jobs. But the situation is not entirely gloomy. The latest trade data, for March, show minerals and palm oil had a strong month and, crucially, demand from China is picking up. And the same Nielsen survey that was so gloomy on jobs reported only 13 per cent of those surveyed believed the country's economy would worsen. Indeed, in another Nielsen survey last month, Indonesia's consumers came out as the world's most confident. "It's a very mixed bag," says Nick Elliott, who advises many of the country's bigger companies on communication strategy. "There are no sweeping trends. Indicators are going here, there and everywhere." One sector doing better than some, he says, is cement. The industry is beginning to pay much greater attention to the whole supply chain rather than just packing stuff into sacks and waving it off at the factory gates. "It's starting to engage at all sorts of different levels," Mr Elliott says. "It means more costs because more investment and more employees are needed but it should translate into bigger profits." Such green shoots of optimism might appear invisible to job seekers such as Ms Sari, but they are more widespread than in neighbouring countries or even other parts of Indonesia - despite some media efforts to paint a picture of desperation. Take the fast-moving consumer goods sector, for example. The executive quoted above says he cannot think of many other countries he would rather be working in. "Revenues are up about 18 per cent on last year," he says. "People are not continuing life as usual, but they are still shopping; they're just switching to packs with a lower unit price. I think I've probably got one of the safest jobs in the world in this company." Translating such creativity into action and then turning it into profits in times of crisis is what is going to lift Indonesia out of the global downturn. And as with the crisis itself, the signs of whether this will happen are mixed. Johannes Wardhana, the Indonesia boss of Egon-Zehnder, a headhunter, says that if he's feeling pessimistic, he identifies with an executive who recently described the economy as follows: "For the past 10 years we've been driving our cars as if the four tyres are flat, so when we hit another nail [such as the current global downturn] we just go 'oh' and move on." But on optimistic days he thinks of the hive of activity in his office. "Indonesia has been in the top five to 10 Egon-Zehnder offices in the world in the past five years," he says. "Last year, we took on another consultant and moved to bigger premises because of all the work." Mr Johannes acknowledges it is going to take decades to transform Indonesia's education system into one that stimulates creativity. But, he says, the fact some state-owned enterprises are now knocking on his door shows a change of mindset. "That they're even considering outsiders is a step in the right direction," he says. "They want to professionalise, as do an increasing number of Indonesian companies. This can only be a positive development for the labour market." Copyright The Financial Times Limited 2009 [Non-text portions of this message have been removed]
