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Indonesia catches energy efficiency bug after 38% rise in energy costs

Indonesia held its first-ever conference on energy efficiency last week in Jakata, as businesses there start to grapple with challenging cost increases for electricity and reduction of fuel subsidies. Indonesia as a whole has one of the lowest rates of energy efficiency of any manufacturing country in the world, and so, given the size of the population and manufacturing sector, offers very big opportunities for saving energy and reducing costs

Out Performers’ Managing Director, Duncan Stone, presented a keynote address at the conference and then visited a number sites where our Indonesian team are working:

“When we were asked to visit a sports shoe factory in Indonesia and they told me it had 18,000 employees, I thought I had heard wrong.

I had mis-heard. On arrival it turned out to be eighty thousand employees. The company provided three meals a day to each employee, and there were 10,000 staff living in dormitories on the site. Nothing like the sweat shops we’d been warned about in the media, this was a pleasant place to live and work, and the staff looked well looked after. With a population that would easily fill a medium-sized town in Australia, the entire site was 360 hectares in size.

Despite the scale of the site, the energy efficiency issues were the same as those in Australia. Electricity prices had recently risen (by 38%) and they need to reduce costs. Their biggest challenge is getting the operations and engineering teams to engage in energy efficiency as they are too flat out trying to manage production. They really wanted a Big-Bang, one-off solution but unfortunately I had to explain that energy efficiency was about small incremental improvements and that although they could reduce energy costs by 20% with reasonable paybacks, it would take time, staff engagement, and management interest to obtain the required outcome.

I was impressed with the team and their commitment and the quality of the plant but most impressive was the ability to manage 80,000 people a day to achieve a common outcome of producing sports shoes. I am extremely excited about continuing to help the plant reach its energy goals and expanding to help other major producers in Indonesia do the same thing.”
Indonesia catches energy efficiency bug after 38% rise in energy costs