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PT Len Industry leading the way in electronic equipment markets through innovation

Interview - October 17, 2013
Abraham Mose, President Director of PT Len Industri (Persero), discusses the company's major transformation from state-run electrical research unit into an industry-leading, professionally run enterprise with five lines of business: railway transportation, navigation systems, renewable energy, ICT, defense electronics and control systems
Please tell us about your academic and professional background, and how you came to be President Director of PT Len?

I graduated Electrical Engineering at Hasanuddin University in Makasar (South Sulawesi, Indonesia). In 1995 I joined PT Len Industri where I began as General Manager for Control Systems. From 2000 until 2002, I was General Manager of Signaling for the railway transportation business. Between 2002 and 2007, I was General Manager of Transportation, and in 2007 I became Marketing Director. 
In 2012, I became President Director of PT Len Industri
Could you give us some insights into the milestones in the history of the company?

LEN (Lembaga Elektronika Nasional) was established in 1965, and at that time we were also known as the National Electronics Institute for Research and Development (R&D). In 1991, we became a state-owned company and the culture of the R&D institution had to change in order to increase our competitiveness. From 1991 til 2000 we developed a new corporate culture and transformed the company into a professionally run business institution named PT Len Industri (Persero).
Following the national crisis, between 2000 til 2002, the company survived by developing consumer goods. Then from 2002 until 2007, we went through what we call the ‘era of stability and growth’. During this period PT Len Industri underwent a major transformation. We had all the necessary tools – the laboratory, the human capital, the engineers and the expertise – so we applied all our capacity to expand and grow. We diversified our activities into five lines of business: railway transportation, navigation systems, renewable energy, information & communication technology, defense electronics and control systems.
Beginning in 2007, we started the so-called “acceleration phase”, where we moved from providing engineering, procurement, and construction (EPC) services, to manufacturing and development services. 
Today we have three subsidiary companies that provide EPC services using the products that we manufacture – PT Eltran Indonesia, PT Surya Energi Indotama, and PT Len Railway Systems – specializing in traffic management, renewable energy, and railway transportation, respectively. 
Can you please elaborate on your different lines of business? Which one is the most important in terms of revenue?

If we look at to growth of revenue, for the last three years the transportation sector has been growing significantly. There are three big upcoming projects in the transportation sector: one is for the airport, the second one is for the railway, and the third one is for the much anticipate monorail project – Mass Rapid Transit (MRT). 
PT Len has become a major player in the railway signaling industry in Indonesia. In 1991 we developed our railway signaling and interlocking systems, and later on we produced the railway telecommunication systems, railway traction systems and railway substation systems. Our main navigation system products facilitate centralized traffic control on the runways. We also provide the traction system for electric railcars. We always put the security and reliability of our products as our primary concern and we never compromise with the quality of our products.
In the renewable energy sector, our role as manufacturers is growing as the need to reduce dependence on oil fuel grows. PT Len has been developing the Solar Power Plant System since 1997, operating in many remote areas of Indonesia. Our current production capacity of our solar modules is up to 10MW per year. 
In information & communication technology, PT Len has had proven experience for decades. We provide a variety of solutions for our customers and develop various products, such as broadcasting equipment, tracking systems, and regeneration of copper cable to fiber optic in some regions of Indonesia. We also produced a digital TV transmitter to broadcast conferences in media centers – most recently we broadcasted the APEC Summit conference in Bali.
In 2002, we started providing services and equipment in the marine and air navigation.
When did you start your cooperation with the Ministry of Defense and what kind of products do you provide them with?

Our cooperation with the Ministry of Defense goes back to 1985. We have had a research defense agreement since 1991, but we started with secure radio communication in 1981. PT Len has succeeded in developing tactical communication tools designed specially to cut down the risk of being bugged by other parties. Besides that, we developed the Combat Management System (CMS) in 1998, and the Surveillance System in 2000. 
As a state-owned company, since 2009 we have a special division for defense research and development. A few years ago, we started developing our tactical data link. This year we created a radar product for the combat board, and next year we will launch our new surveillance radar product.
Our main product for the defense sector is the radio man-pack which serves to support army operations. We also produce communications for transponder torpedoes and X-rays for customs, together with a German company. We are a system integrator for our navigation system. We also produce the antennas that transmit and receive air traffic control information. Furthermore, we provide a flight inspection system, together with CAE from Canada. 
What is your strategy to develop your activities in the defense sector?

We assess the plans of the Indonesian Armed Forces and then we develop products based on our customers’ needs. Sometimes they contact us to develop solutions together, regarding electronics in the defense sector. 
The Government is aware that our combat management system is a leading integrator for electronics defense. There are, of course, other companies that specialize in different fields relevant to the needs of the Ministry of Defense. But when it comes to electronic infrastructure for ships, PT Len is the leader. That is why they call PT Len when the Minister of Defense wishes to discuss solutions in electronics.

What makes PT Len unique, compared to other defense companies?

For the defense sector, we do not only want to manufacture the end product – we want to develop products from the design stage until the end product. We want to be involved in the integrated process, right until the finished product. 
We want to build the defense industry here in Indonesia. We are the only state owned company with competency in defense electronics. 
What is your company’s approach to strategic partnerships?

If the components or materials of certain products are too specific for us, then we create strategic partnerships with foreign companies. For example, we work with Lockheed Martin from the U.S. Strategic partnerships allow us to learn from other international companies step by step. 
We produce the combat management system and radars together with the Institute of Technology in Bandung. We also cooperate with Turkish company (Aselsan) to build our facilities to produce radio communications here in Indonesia. The rationale is based on basic economics – why would they have production in Turkey if they want to sell their products in Indonesia? It is actually cheaper to produce here and we have the capability to do it. So we created a strategic partnership with them to build the industry and the facilities in Indonesia.
Do you also have ambitions to sell your products internationally?

Of course, we have international ambitions as well. As part of our cooperation with Turkey’s Aselsan, they have promised to help us sell our products elsewhere, not just in Indonesia. 
We also cooperate with the Netherlands on combat management systems. We have a joint development agreement for CMS software with the Netherlands. They use our products to deploy their warships. Furthermore, we have an agreement with the UK’s Ultra Electronics. We supply our new data link to Ultra. 
Our ambition is to become a world-class electronics company and a global player. In our vision, the domestic market should be our base from which we will expand and eventually export our products to the global markets through our strategic partners. 
We have set up a new international links and marketing programme for our Corporate Secretary division. We would like to promote our products in ASEAN and beyond, and communicate that Indonesia has many strengths beyond tourism. We also have a lot to offer in the transportation, IT, and defense sectors. Here in Indonesia, people already know about Len. It is now time for us to promote our products and versatility outside of Indonesia.
For a company like PT Len, with a very strong technological base, human resources are essential. Please tell us about your human resources and how you keep your staff up to date with the latest developments in technology?

We have 600 employees, 9% of whom are technicians, 19% are specialists, and 44% are engineers. Our capabilities range from product development to manufacturing, solutions, services and commissioning. Nowadays, our subsidiary company provides all the EPC services, while we focus on R&D and product development and manufacturing. 
Our engineers are located in a special building. Every week, I go and to speak to them to encourage and empower them. They are our main strength when it comes to ensuring we remain competitive in technology solutions. It is very important in our field to keep up with the age of technology, and to match the technologies of each generation. For example in radio technology, we moved from analog to digital technology. Unfortunately it is often too difficult for the older generation to learn the new technology, so we have to employ younger generations. 
Our engineers are between 25 to 35 years of age. We always encourage them innovate in the development of new products. They frequently make presentations to all the management, and from there we determine whether or not it is a dynamic and reasonable project to allocate to. 
Furthermore, our engineers are invited to the Ministry of Defense, the Ministry of Transportation, and research institutions to brainstorm and reach a solution regarding the technology for transportation, defense and energy, with the goal of developing new products. 
At Len we value our human capital as the foundation for achieving business success. When it comes to electrical engineers we are their first choice for employment. We only need 60 new engineers, and we choose them out of 1,000 candidates. So we are very selective, and we get the best of the best.
What message would you like to send to our readers in America about Indonesia and PT Len? 

We always need strategic partnerships and cooperation with foreign companies. We are eager to exchange knowledge and learn about technological advancements and modernization. Nowadays technology moves very fast and we want to be up to date with the latest developments. Sometimes we only know a little, but together we can get the bigger picture.  

More information about PT Len here.