A big change is happening in Citarum River in West Java. Where once flowed tons and tons of waste, from plastic bottles to animal carcasses, the stream has been seen relatively clear of human filth, as evidenced in this video. (<a target="_self" href="https://www.youtube.com/watch?v=yiUm6vJqSW4">https://www.youtube.com/watch?v=yiUm6vJqSW4</a>) As stated in the video, Citarum is the lifeblood of some 35 million people living in West Java and Indonesia’s capital of Jakarta. Ironically, it is also among the world’s 10 most polluted sites in the world, according to the Blacksmith Institute, with The World Bank deeming Citarum as the world’s most polluted river. The work that was taken to change the river into what can be seen in the video could not have been a small feat. That change is the result of a project jumpstarted by the Indonesian government on February 2018. The project, dubbed Citarum Harum (harum being the indonesian word for fragrant), is a seven-year plan to clean up the river. It actively employs the nation’s army in installing nets to capture waste upstream, in-between, and downstream to later be collected and disposed of properly, while at the same time educating the locals on their role in keeping the river clean. The army is also acting as law enforcers against any found to be breaking waste management laws, especially against companies that operate on the river’s banks. Dozens of companies have reportedly been reprimanded and even shut down for breaking waste management laws. As much as Rp 600 billion (roughly more than US$42.2 million) has been set aside this year to fund the effort, which includes putting the proper waste management infrastructure in place. All that said, the Citarum Harum project, while relatively massive in scale, is but a ripple in the ocean when compared with how enormous the task would be when considering the size of the issue. Indonesia’s water resources accounts for 6% of the world’s and 21% of Asia-Pacific’s. And yet 68% of rivers in Indonesia are heavily polluted. Of those, 70% are polluted by domestic waste, according to the Indonesian National Planning Agency. Rivers contaminated by domestic waste raise the cost of clean water since it will require more processing effort. The World Bank estimates that the degree of the pollution has raised the cost of water treatment alone by up to 25%, incurring the country a loss of Rp 56 trillion or $4.2 billion each year. <b>Water for granted</b> Indonesia’s main issue in regards to its water is neglect. Economic growth models in the first few decades following the country’s independence have mainly focused on exports of raw materials, followed by domestic consumption. And while economic growth based on these two factors have been successful, it has also been proven unsustainable. Domestic consumption, for example, drives the textile industry, which, over the years, has grown alongside the banks of Citarum River. Out of some 750 companies that operate on the banks of Citarum River, 72% are textile companies, according to data from the Indonesian Ministry of Public Works and Public Housing. Last year, 41 textile companies went under investigation for polluting the river. They are among the dozens of companies that were reprimanded or shut down during the course of the Citarum Harum project. Rapid economic growth has also fueled urbanization, which puts pressure on the government in providing good management of sanitation facilities. Due to the dense nature of urban areas, most urban families in Indonesia require septic tanks to be located under or near their homes. These septic tanks are badly managed, with leaks found to be common. The problem is so severe that stunting among children – a debilitating condition in which poor sanitation is widely recognized as a major contributing cause – is widespread, with around nine million, or 30% of Indonesian children under the age of 5 being affected by the condition, further leading Indonesian President Joko Widodo to declare it a national priority for the country to combat stunting. Access to sanitation facilities in Indonesia has actually improved with 76% of the urban population having proper toilets, according the World Bank, but the crux of the problem, i.e. providing proper waste management infrastructure, continues to be challenge. Only 13 major urban cities in Indonesia are equipped with a centralized water management system, and among all these cities, the systems generally cover a total of less than 5% of the area. <table><thead><tr><th scope="col">City</th><th scope="col">Units</th><th scope="col">System</th><th scope="col">Total Capacity (m3/day)</th></tr></thead><tbody><tr><td>Medan</td><td>1</td><td>UASB (Upflow Anaerobic Sludge Blanket) </td><td>10,000</td></tr><tr><td>Parapat</td><td>1</td><td>Aerated Lagoon</td><td>2,000</td></tr><tr><td>Jakarta</td><td>1</td><td>MBBR (Moving Bed Biofilm Reactor)</td><td>38,800</td></tr><tr><td>Bandung</td><td>1</td><td>Anaerobic, Facultative & Maturation Pond</td><td>80,835</td></tr><tr><td>Cirebon</td><td>4</td><td>Anaerobic, Facultative & Maturation Pond</td><td>20,500</td></tr><tr><td>Yogyakarta</td><td>1</td><td>Aerated Lagoon</td><td>15,500</td></tr><tr><td>Surakarta</td><td>3</td><td>Biofilters and Lagoons</td><td>14,000</td></tr><tr><td>Balikpapan</td><td>1</td><td>Extended Aerated Lagoons</td><td>800</td></tr><tr><td>Banjarmasin</td><td>7</td><td>RBC (Rotating Biological Contactor)</td><td>18,000</td></tr><tr><td>Manado</td><td>1</td><td>RBC</td><td>2,000</td></tr><tr><td>Batam</td><td>1</td><td>Oxidation Ditch</td><td>2,852</td></tr><tr><td>Tangerang</td><td>1</td><td>Aerated Lagoon</td><td>2,800</td></tr><tr><td>Bali</td><td>1</td><td>Aerated Lagoon</td><td>51,000</td></tr></tbody></table> *<i>Source: Indonesia Water Assocation</i> <b>National, Personal Priority</b> There is still a lack of a nationally coordinated movement to improve waste management due to limited budget and competing sectors such as healthcare and education. But there are movements nevertheless as evidenced in the Citarum Harum project. While more than 90% of Indonesian households still rely on on-site sanitation, since 2013, the government has shifted its strategy from constructing treatement facilties to a comprehensive management that encompasses a whole range of waste management practices, from emptying septic tanks, septage treatment and recycling treated sludge, to upgrading to on-site systems from leaking pits to standard septic tanks. Combined effort between the local goverment and a number of local donors, such as the World Bank, are making headway in improving the processing of fecal sludge. New technology, such as an app to help services to empty septic tanks, have also been launched, symbolizing Indonesia’s readiness to adopt the latest technologies in improving its waste management system. From the private sector, Indonesia-based water treatment firm Moya Holdings Asia, through its subsidiary PT Aetra Air Jakarta, together with partner PT Medco Gas Indonesia, has been awarded the tender for a water supply system in Semarang in Central Java, by the city's municipal water company, as reported by The Straits Times. The build-operate-transfer project has a 25-year concession period, beginning from the date of commercial operation. Its scope covers the design, financing, building, operation, maintenance and transfer of the water supply system, consisting of a new water treatment facility, a transmission pipeline, one main reservoir and two distribution reservoirs. Indonesia-based Adaro Energy has also been actively involved in water treatment and has purchased two water processing plants in Indonesia for Ro 150 million (around $11.3 million) in Gresik, in East Java, and Banjarbaru in South Kalimantan. Furthermore, Adaro Energy has stated that it plans to join the government’s water treatment national strategic projects in the water treatment sector, aiming to produce 4,000 liter of clean water per second. The water treatment industry in Indonesia was stunted during the first few decades of country’s rapid economic growth, but the Indonesian government and its people are waking up to the urgency of having a proper waste management system. For German companies looking to enter the market, a successful penetration could promise a long-lasting symbiotic relationship that benefits all stakeholders.
Is this the beginning of the Asian Century? There are many indications that it is. There is no doubt that the balance of power is shifting. The <b>United States</b> is still the world’s largest economy. Yet, while it was once the strongest proponent of free trade, “America first,” with a tendency toward “America only,” now applies at the center of power. That is reflected by the tonality with which the U.S. asserts its interests. <b>Europe</b> is struggling with internal challenges and essentially has no uniform foreign economic policy. Given the different horizons of the large and small member states and the chaotic state of the Brexit proceedings, improvement cannot be expected without fundamental reforms. In contrast, <b>Asia</b> – above all burgeoning China – has developed tremendous economic momentum and self-confidence. Since the 1990s, Asia’s GDP has more than tripled; China's GDP has even grown ninefold. This boom has lifted many millions of people out of poverty and enabled them to join the middle class – an accomplishment that rarely receives the recognition it deserves in Europe. Asia is also rapidly catching up in the area of technology, as the landing of a Chinese rover on the far side of the moon demonstrates. To date, no other nation has accomplished such a feat. In telecommunications, China has long since outpaced the West. And it’s only a matter of time until this pattern repeats itself in the consumer-oriented platform economy. With the New Silk Road, the Belt and Road Initiative, China is enabling the construction of infrastructure that will reach 65% of the world’s population. This Initiative has the potential to become the largest investment program of all time. The strategies pursued by other Asian countries also speak a clear language. India is implementing Make in India, an ambitious industrialization strategy. The industrial policies of Indonesia, Vietnam and Malaysia also aim for growth and progress. And Japan and South Korea are already among the world’s leading economies, although they face challenges similar to those confronting Europe’s leading industrial countries. How can we best manage this change? By withdrawing into isolation or even by imposing legal restrictions on Asian companies’ investments in Europe? Well, export-oriented countries like Germany should at least carefully weigh such steps. I see three important points: <b>First, reciprocity creates common ground</b>. This is about a healthy balance between give and take, about win-win relationships. Germany and German companies have a lot to offer Asian countries and companies: leading technologies, investment, jobs through localization and training. Germany’s “dual” education system, which combines vocational training with on-the-job experience, is highly regarded around the world. Access to markets and protection of investments and intellectual property – in other words, fair competition – must become common ground. The free trade agreement between Japan and the EU paves the way. Now we need a free trade agreement with China. It’s high time for an open and constructive dialogue. To make this possible, government and business must collaborate closely. As in the past, the Asia-Pacific Committee of German Business (APA) will play a role here. <b>Second, adaptability is the future</b>. The world is becoming more complex, the pace of change is accelerating, geopolitics is increasingly influencing geo-economics, and many are overwhelmed by digitalization. The nations of Asia face huge challenges – from climate change to urbanization. And this is exactly where German companies, with their many years of experience and their innovation power, can help. <b>Third, unity makes us strong</b>. In recent decades, German companies have been highly successful in Asia. Thanks in part to the work of the Asia-Pacific Committee of German Business, they are well networked in the region and familiar with the local markets and their requirements. “Made in Germany” enjoys an excellent reputation. Yet none of this guarantees future success. German Chancellor Angela Merkel made the point very clearly at the Munich Security Conference: “No matter how industrious, how great, how super” we may be – it won't help much if powerful trade partners do not support fair competition. Until the EU establishes a coordinated approach to foreign trade policy, German business should at least adopt a common position to assert its interests. For German companies, the Asian Century is both an opportunity and a challenge. We can build on our innovation and our good reputation. But we must also be able to forge partnerships of equals and recognize that globalization is not a one-way street. Here, reciprocity is the formula for success. <i> Joe Kaeser is President and Chief Executive Officer of Siemens AG and the new Chairman of the Asia Pacific Committee of German Business (APA). </i>
<i>Jakob Friis Sorensen is no stranger to the logistics industry. Previously employed by Maersk Line and stationed in various countries such as Indonesia, Japan, Denmark, India, Singapore and Malaysia, Mr. Friis Sorensen has seen his fair share of the industry’s ups and downs.</i> <i>He returned to Indonesia in 2006 and joined the Kuehne + Nagel family in 2016 where he was hired to take on the task of leading Kuehne + Nagel Indonesia amidst a wave of anti-globalization and other challenges such as the US-China Trade dispute and Brexit. Despite all that is going on, there are still opportunities in Indonesia, Mr. Friis Sorensen said, and there are still benefits Indonesia can reap from those challenges.</i> <i>EKONID had the opportunity to interview Mr. Friis Sorensen recently to discuss the latest developments in the logistics industry, his plans on making Kuehne + Nagel Indonesia a prominent brand and how Kuehne + Nagel is leading the transformation in the logistics industry.</i> <b>EKONID: Share with us a brief history of Kuehne + Nagel</b> <b>Jakob Friis Sorensen:</b> Kuehne + Nagel started in Bremen, Germany in 1890. We are a very established company with a deep history with our global headquarters in Switzerland. And we are a very big company with almost 82,000 staff at more than 1,300 locations across 100 countries. In sea freight, we are the undisputed No. 1 in the world. In air freight we are in the Top 2 as well as in Contract Logistics where we are very active in warehousing, distribution and transport. In Indonesia, Kuehne + Nagel has been around since 1987. We have been quite successful here but compared to how well-known Kuehne + Nagel is in other parts in South Asia Pacific and the rest of the world, we have some way to go in terms of building up the brand in Indonesia. We have quite a lot of activities in Kuehne + Nagel Indonesia today and we are always working harder to get the brand known. The plan is to elevate our presence, our footprint and the activities of Kuehne + Nagel Indonesia. We want to become the largest multinational freight forwarder in Indonesia. <b>EKONID: You are a relatively new addition to the Kuehne + Nagel Indonesia family. What changes have you enacted since you became Managing Director of Kuehne + Nagel Indonesia?</b> <b>JFS:</b> First, we upgraded the workplace and moved into a modern office at a prestigious location in Mega Kuningan, Jakarta, where we have been for two years now. Secondly, through the strategic acquisition of the logistics operations of Wira Logistics, we have added a very big warehouse in Cibitung in Bekasi, so we hope that’ll add to our growing number of customers, as well as open up some good, new businesses. Currently, we’re in the process of further expanding our warehouse in Cikarang, in Soewarna Business Park, where we are planning to install temperature control storage to specifically service pharmaceutical importers that have high value goods such as vaccines and medical devices. <b>EKONID: What is your personal highlight from the last two years of your leadership at Kuehne + Nagel?</b> <b>JFS:</b> I am very proud of our new office; many of our visitors and colleagues have remarked that it is a very modern set up. We want to be the logistics provider to work for and, to do so, we want to offer people the best environment. In order to attract the right people, we offer challenges and good career opportunities. And for our customers, we want to be the first logistics company they want to work with. Nothing in Indonesia is easy, but anything can be done if we work hard. <b>EKONID: What would you identify as Kuehne + Nagel’s strengths right now?</b> <b>JFS:</b> Many young people view logistics as an “old” and “traditional” industry, but we have managed to attract many young professionals and also very skilled people. In Indonesia, our services cover sea freight, air freight, custom housing, brokerage, and, as our latest addition, contract logistics, which covers warehousing and distribution. Our trucks are all over Java, Sumatra and Bali. So Kuehne + Nagel is very serious in expanding here and collaborating with companies in Indonesia to solve their logistics challenges. We have spent time building our operations and foundation up over the last two years and I believe 2019 is going to be the year when a lot of people are going to say, ‘Wow, that’s Kuehne + Nagel Indonesia!’. If you’re looking at what Kuehne + Nagel is doing elsewhere in this South Asia Pacific Region, we are growing very fast in places like Vietnam Malaysia and Australia. In Indonesia, we have a little bit of catching up to do, but I like that challenge. Indonesia is a very important country in the region and globally. <b>EKONID: According to our recent survey, 2019 is looking to be a relatively tough year for German companies globally, with many holding back on employments and investments. You seem to be signaling a different direction for Kuehne + Nagel.</b> JFS: For the logistics industry, it’s definitely an industry that’s undergoing a transformation. The advent of e-commerce and blockchain and all these new technologies are really changing our industry. And that’s why I think Kuehne + Nagel is an amazing company. Our in-house and customer systems are top-notch and we develop end-to-end one-stop-shop solutions for customers that gives them visibility and control. I’m quite excited about that because that also opens up for a lot of growth opportunities for Kuehne + Nagel Indonesia. <b>EKONID: What is your take on the current business climate in Indonesia?</b> <b>JFS:</b> I think Indonesia still has opportunities. We are in a very competitive environment where some of the neighbors like Vietnam, Thailand, Bangladesh and others, are perhaps seeing more benefits from the US-China Trade dispute. But Indonesia will also see some more business coming in because of that, perhaps more exports of fast-moving Chinese consumer goods to the US and Europe that are produced in Indonesia. But of course what’s really changing things is the e-commerce scene. You have big players coming in. And of course we can see that this is an area that is just going to be continuously expanding in Indonesia. That is also something that we, as a logistics company, need to play along with. So that’s really interesting. And currently it’s competitive, it’s disruptive, it’s challenging, it’s all those buzzwords you’ve already heard. And yes there are restrictions in Indonesia such as Internet speed, bandwidth and other technical bottlenecks. But there are still major opportunities because things are changing. It’s going to be a new playing field. <b>EKONID: In those terms, you can also say that Indonesia is late to the party. Having worked in the Indonesian logistics industry for so long, what are your general impressions of how the country is growing and what advice would you give to companies that are planning to expand into the country?</b> <b>JFS:</b> One can say it could be so much faster. But Indonesia is also very big. I think the country is developing at its own pace. And, to borrow your term, it’s better late than never. My advice for people coming in, especially foreigners, is that if you don’t have patience in this country, you might want to rethink living and working here as you may end up frustrated. But if you’re like me, if you like that things are not perfect, appreciate that we can change things but that these changes take time, you’ll enjoy it here. Indonesia is a long-term project. I haven’t visited all 17,000 islands so it’s a lifelong experience to be living in Indonesia. Sometimes, Indonesia can seem like it’s taking two steps forward and then three steps backwards, but the overall direction is the right direction and it’s going to get so much better. <b>EKONID: Where do you see Kuehne + Nagel in the next 5 to 10 years?</b> In Indonesia, we’re going to be an expanding company that will grow in size, services, customer business and geography. However, at the same time, we cannot do everything ourselves in Indonesia. So we will continue to develop partnerships with local companies in order to integrate our services all across the country. That means from Aceh to Papua. That means in air freight, sea freight, distribution and warehousing. So we have plenty of scope and that’s exciting. I’m never getting up in the morning and not knowing what to do.