Interview with Sunny Sukardi,Indonesian Street City owner: "It's very hard to get something done in Macau"

 

Paulo Barbosa

Sunny Sukardi is the epitome of a self-made-man. Born in Bintan, Indonesia, and with little education, he went to Singapore at a young age where he became a business man. In 2010 he came to Macau and established the Indonesia Street City as a platform for his trade.

Nowadays, TH group is operating in a wide range of activities. Aside from the store in Macau, Indonesian Street has opened a flagship shop in Shanghai, and other franchises in Beijing, Hangzhou and Kunming. The group is now involved in the construction of a new satellite city in Mr Sukardi's birthplace, consisting of hotels, exhibition centers, shopping malls,residences, offices, a university, an hospital and other facilities spread over 700 hectares of land. The ground breaking ceremony for the ISC was held in Batu Licin, Bintan, Indonesia on 22nd Feb and the project's first phase is expected to be completed in December 2015. The Times spoke with TH Group's CEO Sunny Sukardi and COO Onida Lam about the new project and the group's activities in Macau.

Macau Daily Times – TH Group, formed in Macau, just launched the Indonesian Street City venture in Bintan Island. Can you describe this major project?

Sunny Sukardi –The goal of developing this project is to have more commitment to society. In this world, you have too many problems and conflicts. I want to create a city that is more friendly, in the sense that the people living there can enjoy natural beauty and don't need to worry about places for their children to study. I have chosen a place where I'm able to develop a lively and friendly city. Bintan is a nice location for such a meaningful project. Indonesian Street City is my commitment to give back to society; it's not about how much [money] I want to make. China and Indonesia are two of the biggest countries in Asia. I was born in Indonesia but my grandparents are from China, so I want to help to create a more friendly culture between the two countries.

MDT – What will be the main features of the new city you intend to create?

SS –I want the place to become a tourist and cultural destination. It will include a 24-hour service ferry to Singapore, and I will also charter direct flights from China, Macau and Hong Kong, working together with Garuda Indonesia. Singapore is too expensive, so I want to create facilities [in Bintan] to host conferences. There are many multi-national companies in Singapore that can do seminars there, and the Singapore-based workers can live there. The ferry takes about 1 hour and 25 minutes so it is convenient for them to work in Singapore and live there – it's no different from living in Singapore.   

MDT – But wouldn't the immigration procedures make it inconvenient to cross the border?

SS –They can have a green pass; they only need to pass an auto-gate [at the border]. They can also buy a one-year ferry ticket and use that [mode of] transport as many times as they want per day.  It's convenient for people who will live there, and also for holiday makers.

MDT – What is the total investment involved in ISC Bintan?

SS – The first phase is [an investment of] USD700 million, but the total commitment to this project lasts around 15 to 20 years. To complete the whole project, I need around USD30 billion.

MDT – But does that amount include your companies' investment or all those who will join the project?

SS – In the 21st century, to create something, I must start with my own financing. Until now we have invested around USD300 million and I did not get any financing from institutions or banks. My commitment to the government and to local society is to make something different. I rely on my own financing and maybe on my group of investors.

MDT – The group states that it is leading 5,000 Chinese enterprises to invest and trade in ISC. How did you gather such a large number of companies that want to be involved in the project?

SS –I have been living in China for 14 years. I know many associations, I know the Chinese culture and I also know the Indonesian culture. In Indonesia, maybe 60 percent of the daily products are Chinese. In Bintan, I want to create a trade center for all the Chinese products that can then be distributed to Indonesia and to Asia. Investors in Singapore and Malaysia need to travel to China if they want to buy a lot of products here. With a trade center [in Bintan], people wouldn't need to come to China.

MDT – You are trying to gather more external investors to join the project. In Indonesia, widespread corruption is an issue. How is the business environment in the country now?

SS –We can provide a one-

Stop service to Chinese companies. Those companies don't need to get involved with the [local] government. We can manage everything and only charge them a service fee. So the companies only need to supply the goods from China and send them to Indonesia. We will manage everything on the Indonesian side.

MDT – Are there any Macau companies involved in the project?

SS –At the present moment, there is TH Group, the leader of the project. Regarding individuals that can buy properties there for investment [the villa houses are selling starting from HKD881,000 to over HKD3 million and the flats start from HKD663,000], we don't have any yet. The main market is in the Chinese mainland, because Macau is too small.

MDT – Has there been any kind of support from the Chinese or Indonesian authorities to develop that project?

SS –We don't have any formal support, but there is a lot of commitment from the Indonesian and Chinese governments.

MDT – Why did you choose Bintan Island for the location of this development?

SS –The location is very near to Singapore and it is totally under developed, so there is plenty of space for me to do what I want. If I had chosen a city, it would be too crowded and too much money would be needed [to develop the project]. Secondly, I was born there and I left around 35 to 40 years ago. The Bintan people have culture and resources, but until now, if they are sick or want to pursue their studies, they need to go to Singapore or Malaysia. Why? We want to promote change in Bintan island and I think I have the capability to do so.

MDT – The Indonesian Street City opened a store in Macau in 2010 [located at Ocean Gardens in Taipa]. Is it a good business for the group?

SS –I chose Macau as my base instead of Hong Kong, because Hong Kong is too crowded and no different from other cities. My main market is mainland China, but I chose Macau because it is more convenient for some transactions and for import-export as an interchange center. Macau is only the base but it cannot generate too many things. I also like Macau because the city is small, so it's very convenient to travel. I think that many people still don't understand this region. That is why many companies set up their headquarters in Hong Kong. I also came to Macau with the commitment to do something here. I had ideas like the agarwood training center, but I feel there is a lack of support from the government. In 2010, I came here thinking to introduce a new product and another source of income [for the government], but now I feel that it's very hard to get something done in Macau.

MDT – Can you give an example?

SS –Last year, I wanted to do a street featuring the Indonesian culture in Macau. We applied to the government [through IPIM] and they said no. We had all the designs ready. I own many collections [of art and antiques] in Indonesia. We didn't ask for any location in particular, I wanted to develop a tourist destination; people would come here and have Indonesian coffee, a snack, or even a Bali-style spa. But the government couldn't give me anything. I don't know how to make a gift to Macau, because it's all centered on gaming. Now I want to develop a cultural center in Shanghai.

MDT – Who are the main clients of ISC Macau?

SS –In Macau, the clients are mainly locals, but in China it's different. There is a big difference between Macau and China. In China, they know what is art and history, in Macau people like to buy new things and in modern style. They will buy because of the monetary value and not because of the history.

MDT – Many companies here, especially the non-gaming-related ones, complain that it is very difficult to find proper human resources here in Macau. Do you agree?

SS –It is very difficult. For example, I approached the government with the intention of investing a lot of money and I proved to them that this could be done. They said yes but nothing happened. We wanted to re-export to China using Macau as a platform, but the government didn't follow up. It's very tough for business men if they want to introduce a new product here.     

MDT – Do you regret having established your base here?

SS –No, I don't. I will see what can be done. Humans can always be changed. I will wait some more, and if things can't be changed, I will look for another opportunity. In this society, we can't say that we will spend all our lives in a place – that's impossible, especially for businesses.

MDT – In your view, what are Macau's main problems?

SS –If it continues like this, Macau will have trouble, because all the income comes from the casinos. (…) The new generation is not hard working enough and has no vision. If the casinos are allowed in other Chinese cities, Macau could collapse. I lived in Singapore for many years and Singapore is also very small, but they developed a financial center and all kind of things. Why? Because Lee Kuan Yew's vision was totally different. He wanted the territory to be self-sustainable, not relying on a certain business. When I came to Macau, I felt that there were a lot of opportunities and I could do a lot of things, but now I feel that it's very tough to do something. For example, if you want to import to Macau and then re-export to the mainland, you can't imagine… Macau does not have a department that can issue the certificate to re-export. Who can do business here? You tell me.

MDT – That seems to go against the idea of this region as a "platform".

SS –I don't think it is. Now I use Macau for the base of my holding company and I can't do anything here. (…) Maybe one day I will move my headquarters back to Bintan after I have finished development there. If I can't do anything here, why put in my best efforts?

TH group sets up local herbal medicine factory

TH Group has a factory operating in Macau to process dragon blood, considered one of the precious herbal medicines from the jungle of Indonesia.

"I first knew about this herbal medicine because there is a big demand in China. I started to export this medicine to China," recalls Onida Lam, a local who has been involved in the research into and development of dragon blood.

Ms Lam, who is TH Group's Chief Operating Officer, explains that the factory in Macau serves the Chinese market. "Every year, the demand in China is at least 100 tonnes.  We hope that the Macau factory can support at least 30 tonnes a year. And we need the government support, because we are a bit frustrated right now with getting the license and applying for so many things. The government is giving us a headache," she says.