Kamis, 05 Juli 2012

Hartono Atmadja: Not Satisfied Being Mere Market Leader

Garudafood is a household name that is no longer confined to peanuts. These days Kacang Garuda, originally an unbranded roasted peanut product first produced by PT Tudung Putra Jaya as far back as 1958, is widely familiar to young and old in urban and rural areas alike.

Garudafood started expanding the variety of its products in 1995. The man behind the non-peanut division is none other than Hartono Atmadja, an executive widely experienced in multinational companies. Thanks to him, other Garudafood products -- such as Gerry wafer-sticks, Oky jelly drink, Mount Tea and instant rice are enjoying popularity -- besides the company's long-established traditional products of roasted peanuts and crunchy battered peanuts. "Garudafood peanut products are still the market leader and we continue to develop our non-peanut market. Last year, the ratio between peanut and non-peanut divisions stood at 55 percent and 45 percent," said Hartono, managing director of Garudafood.

Hartono, a chemical engineering graduate from the Bandung Institute of Technology (ITB) has been handling the cookie, wafer, jelly and beverage division since 2001. He initially managed Garudafood's jelly factory in Tangerang, Banten, when it was newly acquired.

"When I joined the company in 1998, the turnover of the factory was only Rp 6 billion (around US$660,700) a year and the factory itself had stopped operation for seven months owing to the monetary crisis," said Hartono of his early career at Garudafood.

Sparing no time, Hartono and his team worked hard to set a record for this factory: its turnover was recorded at Rp 9 billion between May and December 1997. For three years, Hartono was in charge of the newly established jelly division. Then he was assigned to handle other non-peanut products. In late 2003, Garudafood entered the beverages industry with its Oky jelly drink. This division began to enjoy robust days in 2005 when it introduced Mount Tea.

Failure and success are two inseparable things in life and Hartono also experience this. Hartono said, for example, that he particularly has yet to be successful in carrying out a partnership with farmers that the company used to practice before.

In his opinion his strategy did not work because it was too focused on the outcome in the sense that he wanted to raise peanut sales faster. "So I changed the strategy and concentrated on the process," he said.

Garudafood is committed to investing in the farming sector. "This is a challenge that I don't think we have dealt with completely," he said.

The reason is that Garudafood can still do a lot for the farming community by developing, through a business approach, farming products that do not enjoy government support. "We could make a leap and show greater seriousness in entering the farming business. We'd do the planting. As for the land, we'd rent it or purchase it once we were operationally solid," said Hartono, who began his career at Rhone-Polenc Chemical.

It is Hartono's dream to see Indonesia self-sufficient in peanuts. In the meantime, he ensures that peanut supplies for his company are safe. "The amount of peanuts we need is equal to the harvest from 30 hectares of peanut farms a year. Our target up to 2008 is just 30 percent of this or nine hectares," he explained. And that is just for the domestic market.

"Exporting will be the next step. We must build our capability first because Garudafood is more in the food industry rather than in agriculture. That's why it will take a longer time to build this capability."

He said that Garudafood's needs can be partly fulfilled through imports (particularly for battered peanuts). If the market is good, the company must buy the peanuts from domestic peanut growers regardless of how high the price is. "The uncertainty is great, although we have been able to cope with this problem up to now. Well, we are trying to reduce this uncertainty. Our target is that 25 to 30 percent of our needs are met, which requires extraordinary effort," said Hartono, who has one daughter.

Garudafood, he said, has never managed agriculture intensively because of its partnership principle stressing cooperation with farmers, but some of the undertakings stop half-way. "So now we finance and manage the peanut farming activities. Of course, we involve local peanut growers. We currently have a project in Lombok (West Nusa Tenggara)," he said.

The company plans to purchase its own land not to control the farming business but to focus more on quality and productivity and to ensure supply. "It takes three years to build up a farm, which means this project will be completed by 2008 at the earliest," he said.

Currently, Garudafood is sold in 25 countries but in terms of value it accounts for only 2 percent of its total sales volume. As for its cookies, Garudafood is eyeing Thailand and is in the last stage of negotiation for investment there.

Although he is no longer directly involved in the operation of the company, Sudhamek, the founder of Garudafood, and his team, which is separate from Hartono's, are still diversifying Garudafood's businesses. "Our new businesses are, among others, Mount Tea and Instant Rice. My team and I will just make sure that our existing businesses are on the right track," he said modestly.

In fact, in 2005 Hartono began to handle the entire business of Garudafood as well as its marketing, which in 2004 still had to be directly reported to Sudhamek. Hartono has also played a major role in trimming down the organizational structure of the company and developing its manpower. Although the company registered a growth of 30 percent, the system still lags behind, he said.

That's why in the last three years, Hartono, also a holder of a Master's degree from the Management Program of the University of Indonesia majoring in accounting management, has been trimming the organizational structure of his company and reinforcing its work teams. Hartono used to work under a neat system in other companies and now, in charge of the non-peanut division of Garudafood, he has to work hard to catch up with other divisions, such as the peanut marketing division, that are way ahead.

The first thing he dealt with was the personnel, which, he believes, constitutes the strength of the company. With its focus on promoting Total Quality Management (TQM), Garudafood has introduced a series of training sessions for employees at all levels, starting from the operators at the lowest levels up to the managers. "In the past, our factories did not adopt high technology, so we had to make our employees understand their scope of employment so that they could work efficiently," he said.

The next thing to do is to make the organization of the company more effective and the third thing is to establish a particular work culture. "We are only 16 years old so we must have our own character or identity. The process of this culture formation is still going on," he said.

"When we decided to produce Oky jelly drink, there was no good system for this product. I built the system. Now the manual is ready. Our Garudafood Management System is no longer a draft; it is now a book," said Hartono, who has set 2007 as the year by which everything is to be established.

In his opinion, establishing a Garudafood culture is still at the earliest stage and the process is far from completion. This is in line with the ambition of the company to continue developing both its peanut and non-peanut divisions and to remain the market leader. Garudafood is the market leader not only in peanut products but also in wafer stick biscuits with its Gerry wafer sticks.

"We still only have a small chunk of the large Indonesian biscuit industry, the market value of which can reach a total of Rp 5.5 trillion a year," he said. The jelly division that he has handled from its inception pocketed Rp 172 billion in 2005 thanks to the division's product innovation of its jelly drink.

Hartono, who likes swimming and is a vegetarian, would like to see Garudafood reach its target of being one of the big five in Indonesia's food and beverages industry. The next goal is to go public and distribute the profits to its shareholders.

For the company's initial public offering, he hopes Garudafood can improve even further. Many of its products have been awarded citations as evidence of their top quality. Hartono is also interested in acquiring Hazardous Analytical Control Point (HACP) certification for product safety to ensure that a food product is safe from the time it is made up to the time it is eaten. "Hopefully the certification of each of our products will be completed late this year," he said. (Lily Glorida Nababan)
The Jakarta Post, August 30, 2006

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