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-Indonesia joint venture

  1. Pak-Indonesia joint venture

  2. Self-sufficiency in agriculture
  3. Manufacturing: The declining growth

Karachi to be the gate-way for Indonesian products

Aug 21 - 27, 2000

Establishment of a joint venture company by the business consortiums of Pakistan and Indonesia is likely to be a turning point for a massive promotion of bilateral trade between the two countries.

The project is aimed at making use of Karachi as a gate-way of Indonesian export products, not only for Pakistani market but also regional markets as proposed by Indonesia's Minister for Trade and Industry during his visit to Islamabad last June has finally been kicked off.

In order to give a concrete shape to this objective, the representatives of Pakistan and Indonesia business consortium met at simple ceremony held in the premises of Indonesia consulate general in Karachi last week to sign the Letter of Intent (LOI) for the establishment of the joint venture company. Iswayudha, vice consul of Indonesia at Karachi, conducted the LOI signing ceremony.

Indonesian businessmen Kusuma Darma, Sulaiman and Sutijipto Widjaja represented the Indonesian business consortium, PT. Cipta entral Cemerlang, while Sheikh Amjad Rashid, Sheikh Abdul Waheed and Mohammad Hussain represented the Pakistan side.

The prime objective of this joint venture company is to set up warehouses, showrooms, offices and other facilities to promote exports of various Indonesian products in Pakistan as well as in the countries of the region including Central Asia and Middle East.

This joint venture company will also set up warehouses, showrooms, offices and other facilities in Jakarta to give greater access for Pakistani products in Indonesia and other ASEAN countries.

For this purpose, the joint venture companies will be incorporated in both the countries.

The joint venture company has been given the name "Indonesia Pakistan Products (Pvt.) Limited", while in Indonesia it will be working under the name of "PT Produk Indonesia Pakistan".

Both the Pakistani and Indonesian companies shall have a Board of Directors consisting of six persons three to be appointed by each of the parties hereto. The companies will also have a chief executive officer and a finance officer who would be a professional selected by the Board of Directors.

Speaking on the occasion, Consul General Ali Ardjoeno said that the key to success in all spheres of life especially in today's competitive world is to ensure quality of products. He recalled various instances when the businessmen of Indonesia as well as Pakistan had lodged complaints about the products they imported in their respective countries. He said that such complaints always create an atmosphere of mistrust and ultimately prove to be counterproductive for economic growth of any country. While narrating his personal experience while he was in Japan he paid glowing tributes to the quality consciousness of Japanese entrepreneurs. He said his son had bought a toy from Japan, which was not functioning properly. He contacted the manufacturing company of the toy. They responded immediately and not only replaced the toy with a perfect one but also interrogated into the affairs, which allowed releasing an imperfect toy into the market. This is the way to earn a respectable place in the market he said and advised the business representatives of the two countries to give top priority to the quality of their products.

The two sides were however in agreement to appoint experts for maintaining the quality control of the products.

Sheikh Amjad Rashid, leader of Pakistan business consortium, while talking to PAGE said that so far the Indonesian products arriving into Pakistan were routed through neighbouring countries like Malaysia and Singapore. With the establishment of this joint venture company both the countries will be able to enhance trade volume due to direct links between the trade communities of the two sides. As a result of this joint venture the involvement of foreign exchange may also be reduced to a great extent, as most of the transactions are likely to be made on commodity exchange basis. Sheikh Amjad also feels that joint efforts by the two sides may help enhancing export of products in the region. For that purpose warehouses are being set up at Karachi and Jakarta.

The understanding has been stipulated in a Letter of Intent (LOI) that was signed in the Consulate General of Republic Indonesia in Karachi last week.

The LOI has been made in furtherance of the desire to expand and develop business ties between the two brotherly countries. It has also been formulated in pursuance of the Memorandum of Understanding (MOU) between the government of Pakistan and Indonesia on the establishment of Pakistan Indonesia Consultative Forum, signed in Jakarta during the visit of the Chief Executive Gen. Pervez Musharraf on March 30, 2000.

It is emphasized in the MOU that the two parties shall explore and employ all possible ways and means to enhance interaction between communities of the two countries and to identify and fully exploit the trade potential and to strengthen economic and commercial relations.