Mr Tanoni, allow me to start with an unusual question: How many cycles does your oldest Otto Hofstetter mould have under its belt?
To answer your question, let’s go back a bit further, please. Around 10 years ago, we got an order from Mondelez to produce cups for one of their most famous products, Oreo cookies. Two years later, the relationship was in jeopardy because the quality of our cups was being questioned. In order to regain the trust of this global brand, I made a decision, together with our board of directors. The quality of our Oreo cups must never again be an issue between Mondelez and SJG. The way to achieve this was simple. In 2014, we purchased our first mould from Otto Hofstetter. Since then, that mould has rung up almost 20 million cycles on the counter without ever needing service. It runs like a Swiss watch, and we can take on new orders with ease.
Have you bought other moulds from Uznach in the meantime?
If you want to produce for international brands, there is simply no room for imperfections. The moulds, the injection moulding machines and the operators, our employees, must ensure the highest quality in all areas. The success we had with the Oreo cups led us to acquire a mould for four-litre paint buckets from Otto Hofstetter, which went into operation in 2017. This mould also runs superbly and delivers the desired quality to the customer.
Let’s talk about your company now. Give us a brief overview of Sinar Jatimulia Gemilang, please.
The company was founded in 1982. For the first 30 years, my colleague managed the firm, which was focused on manufacturing crates for PET bottles. The company belonged to the Sosro Group, the market leader in Indonesia in this field, and supplied Sosro exclusively. I joined the company in 2012 with the task of moving SJG into the broader market and generating more revenue. Our plan was to specialise in the areas of industrial and food packaging. Looking back on the past 10 years, I have to say the project has been a success. We generate 70 per cent of SJG’s income from our own business.
Which markets do you serve?
Our paint buckets are for the Indonesian market. We supply companies around the world with the thin-walled cups and noodle cups. The Oreo cups that are produced with Otto Hofstetter’s mould go to Asia, the Middle East, Australia and New Zealand. I should note here that, thanks to our Swiss mould, we were able to reduce the cup weight from 50 to 13.5 grams. The market gratefully welcomed this improvement.
How many employees do you currently have?
We started 40 years ago with about 400 employees. As the company evolved, with its focus on industrial and food packaging, many processes became automated and robot-assisted. Today, we offer around 200 people a secure and attractive job.
In a recent interview, you said SJG is growing by around 15 per cent a year. That’s a great achievement in a competitive market. How did you do it?
I always tell my team that you need a compelling vision to be successful. For our company, the vision was to become a well-regarded player in our high-potential target markets. For this reason, we concentrate on our two areas, and we are selective when it comes to acquiring new customers. As an internationally recognised brand with worldwide distribution, Oreos, for example, corresponds to my image of an ideal customer. But you don’t get into this position just like that. In addition to clear segmentation, a company must be willing to invest in quality. We did that with Otto Hofstetter. Thanks to the reliability, durability and manufacturing quality of our OHAG moulds, our production figures are very good, and annual growth of 15 per cent is achievable.
So, your strategy is concentration. Your home market of Indonesia consists of over 17 000 islands. Does this unique geographic situation affect segmentation?
The majority of our customers produce here on the island of Java, mostly in the metropolitan region of Jakarta. In this respect, the nature of our geography does not force us to take any special measures. The only things we have to pay attention to are delivery times and the requirements of our customers in this regard. For this reason, we are very grateful that our government is meeting the challenges head-on and is constantly expanding and improving the logistics infrastructure.
SJG specialises in industrial and food packaging. Which areas do you think have the most potential for growth?
Indonesia is home to about 270 million people and there is a housing shortage of around two million units every year. So the construction sector in our country is very active, and the demand for building materials is very high. That means the demand for high-quality paint cans is strong, and this is one of our specialties.
What properties are especially important for building materials packaging?
Resilience and stability are top priorities. Things can get hectic on construction sites, and there is always a high risk of a paint bucket falling off scaffolding. Because we are aware of this danger, our paint buckets can survive a fall from a height of four metres without damage. And, because building materials are not handled with kid gloves during transport, it’s also very important that the containers are tight. A crack or a leaking lid can be devastating. Even if it is industrial packaging, the quality requirements are very high. In fact, they even tend to be higher than for food packaging.
Your customer list includes such well-known consumer goods brands as Danone and McDonald’s. These companies have a very strong focus on sustainability. How does that affect SJG’s products and practices?
The big international brands usually have their own standards that a producer has to meet. BRC certification is mandatory, in any case. We reached this milestone in 2019 and achieved Grade A in the process. Brands such as Mondelez, Oreo, Danone and McDonald’s also place high demands on waste management and recycling. Customers are increasingly asking us to offer recycled plastic. Long-term cooperation with well-known companies is only possible if you can respond flexibly to their wishes. We are also open to processing bioplastics, if a customer requests it.
SJG has an established record of corporate social responsibility, including your support of the SPS Mandiri Al Ikhlas School. What motivates you to get involved in projects like this?
At SJG, we are convinced that the success of the company is incomplete if society at large does not participate in it. We see our commitment to the SPS school in this context. It’s part of an educational programme aimed at street children and strives to enable all young people to get an education. Our company supports the facility with food, drinks, water canisters for washing up, paints and art supplies.
Similar to the practice in Switzerland, you offer apprenticeships at SJG, something I have never encountered with other companies. How did this programme start?
Actually, it was a visit to Otto Hofstetter AG that inspired me to start this programme. During my tour of the factory in Uznach, we came upon a big blue door with the words “Gate to the future” on it. In the room behind it, young people were working on demanding tasks with first-class machines.
I decided I wanted to do something like that at SJG. I believe that if we give young people a solid education, they will give us a lot of positive energy in return thanks to their creativity and flexibility. And this is very important in order to remain sustainable as a company.
The description of your apprenticeship programme says that candidates must be willing to live in Bekasi. Is it difficult to find suitable applicants in the metropolitan region of Jakarta, with its around 34 million inhabitants?
Indonesia is experiencing a phase of remarkable economic growth. Like everywhere else in the world, capable and motivated young people are not in abundance and many companies are looking for the best young people.
We give preference to candidates who have completed their studies at a technical school. With this basic knowledge and our internal training programme, we can get them off to a good start in our highly specialised field.
According to SJG’s vision for the future, you want to become the best packaging company in Asia. How close are you to reaching your goal?
When I took up my role at SJG back in 2012, my goal was to supply all of Asia and to work for international brands. At the time, that may have sounded presumptuous. As I said earlier, back then we only produced bottle crates for our parent company. Today, we work for many global players and deliver our products all over the world. We haven’t quite reached our goal yet, but we’re getting closer step by step.
SJG identifies “Customer Success” as a core corporate value. To achieve this, you say that anticipating customers’ needs is crucial. How do you do this?
The key here is to forge a good relationship with each individual customers. We maintain very close, in many cases friendly, relationships with our customers. And, as you do for your friends, we think about our customers and their evolving needs even when we’re not in direct contact with them. We should also note that employee satisfaction is another important factor in Customer Success. We follow the maxim, “The employees are our most important customers.” Because if our staff is happy, they are also more motivated and more attuned to our customers. And one very important element in achieving a good working atmosphere is providing people with high-quality machines and moulds. That’s where Otto Hofstetter comes in. If you have the best people, the best system and the best equipment, customer success almost automatically follows.
In a very price-sensitive market, you rely on moulds and machines from Switzerland. How do you justify these higher-priced investments?
We have a saying in Indonesia: “Cheap is expensive, expensive is cheap.” I particularly like the second part of that proverb. We prefer to spend a little more on moulds and machines for SJG because now we can reap the rewards from the superior productivity. I won’t tell you how much money we have saved with the mould we bought from Otto Hofstetter in 2014, but it’s significant.
Another reason to buy the best is our strategic goal to work for multinational brands. In order to meet their often demanding requirements, we have to use first-class machines and moulds. Otherwise, we wouldn’t be able to sleep peacefully at night.
There are many other mould makers out there who know their trade. Why did you choose Otto Hofstetter in 2014?
Like anyone who had been working in the plastics industry for over 20 years, I knew Otto Hofstetter AG’s excellent reputation before I contacted them. When we decided to introduce a new shape for our plastic buckets, we didn’t want to take any chances in terms of product quality.
Thus, it was only logical for me to contact Uznach. And your approach to our plans further convinced me. The final decisive factor was a glowing report I received from a friend who was already producing with moulds from Otto Hofstetter.
What could Otto Hofstetter improve on?
That’s a tough question. I don’t see much room for improvement in what they offer now but perhaps the offering itself could be expanded a bit. I would be very grateful if I could also count on the quality of Otto Hofstetter AG for the production of 15- or 20-litre buckets, for example. This should be possible for a company that has been making injection moulds since 1955. That would be great.
According to a government decision, single-use plastic will be banned in Indonesia from 2030. How will this affect your business?
Indonesia produces around 33 million tonnes of plastic waste a year. About 30 per cent of that waste ends up in the sea, and nobody’s happy about that. The government wants to put an end to this mismanagement, and we support that effort with every means at our disposal. This does not mean that plastic should be abolished. Plastic packaging just has too many advantages.
However, we should consider, together with Otto Hofstetter, how we can use materials and energy even more efficiently, and how we can make our products even more recyclable. We should also investigate how bioplastics can be processed to yield high-quality materials. The fact is, if we don’t address these issues ourselves, government regulators are sure to place suboptimal restrictions on our activities.
What will SJG be like in seven to ten years’ time?
SJG will be one of the five largest packaging companies in Asia. In our home market of Indonesia, we are also aiming for a position in the top five in the food packaging sector.
