Synnex's Indonesian Intelligent Logistic Center Officially Open. Grabbing Indonesia's 260 million demographic dividend market

Evans S.W. Tu, President & CEO of Synnex Group (fifth from right) and SMI management team attend the SMI intelligent logistic center opening press conference.

  Synnex's subsidiary, PT Synnex Metrodata Indonesia (SMI), built an intelligent logistic center that officially opened at the end of February. Evans S.W. Tu, President & CEO of Synnex Group, attended the opening ceremony. Since entering the Indonesian market in 2011, in less than eight years since then, Synnex’s revenue grew by four to five times. In 2018, revenue reached USD$729 million and profit reached USD$20 million, ranking the company first in the market and among the top 50 Indonesian public companies. After this intelligent logistic center is launched, it will further improve customer satisfaction and reduce operating costs, and prepare for the Indonesian ICT(Information Communication Technologies) business opportunities that are about to break out.


  Indonesia is a huge market with a population of 260 million. However, it's tax system and operating environment were not regularized for a long period of time. It was not until the direct election of the president in 2009 and the political and economic environment greatly improved that Synnex began actively exploring. Synnex established a joint venture with PT Metrodata Electronics, Tbk, a subsidiary of the CIPUTRA Group, to found SMI in 2011.


  Tu said that Synnex Group has accumulated decades of experience in multinational operations and maintained long-term cooperation with major brands. In the initial stage of the joint venture, the group mainly assisted to introduce new products and introduce the know-how of managing products and channels, and financial management systems. The local team has experience in local operations and contacts. Thus, in the past eight years of the joint venture, revenue and profitability have been stellar. Indonesia’s demographic dividend is 11 times that of Taiwan. Although the national income per capita is still low, the economic growth rate in the past decade is above 6%. In five years, the strength of SMI is likely to exceed that of Taiwan, indicating great potential for development.


  Agus Honggo Widodo, CEO of SMI, said that the company has been operating the ICT channel for 40 years; in 2011, after the joint venture with Synnex Group, product integrity, accessibility, and service effectiveness to vendors and customers improved significantly. It is expected that the logistic capability will be the key to the success of operating a large-scale market. The company decided to lead the industry in investing in advanced logistic equipment and management systems to further enhance the satisfaction of the vendors and customers. Synnex Technology International Corporation helped with the planning of the logistic center that was launched this time with a total investment of USD$20 million. Since advanced logistic management will widen the distance between the Synnex and the competitors, it has attracted the attention and coverage of mainstream media in Indonesia.


  Synnex started its deployment in the ASEAN market as early as 20 years ago. In 1999, the company entered Thailand, with a population of 70 million. In 2011, it entered the Indonesian market. In 2017, it entered Vietnam, with a population of 95 million. In the three major ASEAN markets with a total demographic dividend of 450 million, the local establishments are the largest in the market with a total revenue of USD$2.5 billion. In terms of the scale of USD$410 billion revenue of Synnex Technology International in 2018, the three ASEAN countries account for a low proportion of the revenue (6%), but they are the markets with the most growth potential.


  SMI's product line covers software and hardware systems, communications, data centers, cloud, security and surveillance, and the Internet of Things. Currently, there are 20 sales offices and 14 warehouses in Indonesia, covering 150 cities and serving more than 4,500 channel customers. The intelligent logistic center is located in the southeastern suburb of the capital, Jakarta, with a land area of 20,000 square meters; including the cost of land acquisition, the construction cost of the first phase of the intelligent logistic center and the introduction of the second phase of automatic storage equipment comes to a total investment amount of USD$20 million. The completion of the first phase of the project will establish approximately 10,000 storage locations and increase the storage and distribution capacity in the local market by up to three times.


SMI's introductory video


The completion of SMI's first intelligent logistic center will increase its storage and distribution capacity by three times, which is needed for the growth of its business.