Tukiman in his motorcyle repair shop. (Photo courtesy of Muhammad Al Azhari)

Local Businesses in Riau Flourishing Alongside Pulp and Paper Industry

NOVEMBER 13, 2017

Siak, Riau. Small and medium enterprises across Riau are getting a boost from community development programs run by global pulp and paper industry leader Asia Pacific Resources International Holdings Limited — the April Group — which links local entrepreneurs to its subsidiary Riau Andalan Pulp and Paper, or RAPP.

The program has already benefited 70 SMEs in the five districts in which RAPP currently operates: Pelalawan, Kuantan Sengingi, Siak, Kampar and Meranti.

Among those who have benefited most from the program is motorcycle repair shop owner Tukiman, who runs his garage on a 20-by-50 square-meter land next to his house in Siak.

Since 2014, he has received an annual soft loan of Rp 5 million ($370) from RAPP, which helped him attract more clients and grow his business.

Tukiman started the shop in the 1990s, shortly after he arrived in Sumatra from Banyuwangi in East Java under the government’s transmigration program in 1989.

Despite limited mobility from his disability, he had always been eager to develop his skills so he worked odd jobs before participating in a training program run by the government.

Tukiman was especially keen on learning about motorcycle repairs, and with his newly-acquired skills he opened an auto shop which did not take long to become a success since he did not have many competitors.

His shop for a long time was the first choice for many people in the area who needed to get repairs, be it minor or major, on their motorcycles.

However, however hard he tried Tukiman could not expand his shop because he had very limited capital.

The funding program from RAPP solved his problem. The father of three said the extra capital meant he did not have to wait to buy motorcycle spare parts and so he was able to meet the increasing demand for repair services.

"It used to be difficult to repair more than one or two motorcycles at the same time because I would not have enough spare parts. Now, I can fix four or five in one day and bring in at least Rp 1 million to the shop," Tukiman said.

Though RAPP gives him 10 months to repay each loan, they also allowed him some flexibility.

According to Tukiman, he did not have to pay every single cent on time as long as he kept an accurate record of his debts in a bookkeeping ledger.

In his long journey as an entrepreneur, Tukiman said the one thing that had kept his business afloat was ensuring his clients are satisfied with his service, so they would keep coming back.

Misunderstanding Followed by Partnership

In the beginning of Tukiman's partnership with RAPP’s community development unit, there was a slight misunderstanding which ended up in an incident where Tukiman chased away RAPP officers who came with reporters and took pictures without his approval.

Though the officers said they were there to collect information for a database of candidates being assessed for funding from the company, Tukiman did not immediately accepted the explanation.

"It wasn't ethical what they did. They could have informed me beforehand. I don’t like being treated that way," the 61-year-old man said.

Tukiman said he was only being careful. During the early years of his business, a man offered to help him get government funding for his business in return for sharing his business information.

It turned out to be a scam, and Tukiman never got the money he was promised.

Having listened to Tukiman's account, the RAPP officers then explained their intention in details and finally managed to persuade him to join the program.

Over the last three years, Tukiman has built an excellent relationship with RAPP's employees and even managed to revive an old business – selling vegetables and cooking food for residents in RAPP’s Pelalawan complex.

He now also collects palm oil fruits from pickers who came to his house for a tidy profit of Rp 100 per kilogram.

Best Local SME Partner

For his loyalty and dedication, Tukiman received an award from RAPP which declared him as the company's best local SME partner.

The award committee had assessed all of RAPP's SME partners for revenue growth, discipline, honesty and a commitment to repay loans.

Tukiman's award was handed out to Tukiman by Trade Minister Enggartiasto Lukita in June.

Raden Ade Pramono, RAPP's SME offline coordinator, said Tukiman is the company's best local partner in all the five regions where the company operates, beating other partners including farmers, caterers, tailors and coffee shop and beauty shop owners.

Raden said RAPP not only lends money, but also pushes its local partners to keep improving their business, which is one of the key elements required to extend their partnership with the company.

"After we’ve given them the money, we monitor their development every month. If a problem appears, we will discuss it and work toward a solution," Raden said.

The ultimate goal of RAPP’s community development program is to support local people with small businesses, as the company believes it is not only there to create new businesses, but also to develop existing ones.

Partnerships with the company will continue until local entrepreneurs can solve problems independently and meet bank requirements to secure loans.

RAPP is currently in partnership with 73 entrepreneurs in 10 estates across the five districts. 32 of them, like Tukiman, own motorcycle repair shops.