Ludijanto Setijo, President Director of Pan Brothers, Indonesia’s biggest garment manufacturer, has lived and breathed business since birth. “My childhood was surrounded by business activities. As the son of entrepreneurs, I was involved in and engaged by both my parents in the business world,” explains Ludijanto. “My family prepared all their children to be independent and ready to either enter the family business or set up their own.”
Ludijanto Setijo helps turn Pan Brothers around
After graduating from the Nakano School of Business in Japan in 1993 with a major in business management, Ludijanto was ready to begin his career in the Indonesian manufacturing industry. Japan is, in fact, one of Indonesia’s major trading partners, with Japanese fashion giant Uniqlo, one of Pan Brothers’ biggest customers today, accounting for 26% of the company’s sales.
After a few years working at a plastics company, a bag manufacturer, and a textiles firm, Ludijanto joined Pan Brothers as a director in 1997. At the time, the company was not doing well. “In 1996, the turnover was only US$21.35 million. Most of the customers were running away from the company because it had so many problems,” says Ludijanto.
After 1997, it was a completely different company. There were experienced people running the business.
“First, it was bad management. And second, the company had failed to adapt to the changes in the market. That’s why they were going out of business.” But with a new board and new management, the company began to turn around. Twenty years later, in 2016, Pan Brothers’ turnover was US$482 million. “After 1997, it was a completely different company. There were experienced people running the business.”
At the time, however, employees at Pan Brothers were understandably concerned. The new leadership team set about assuring workers that the company would be run much better. “They had to understand we were doing everything to make Pan Brothers healthy and help it to grow,” says Ludijanto. “Even now, we maintain openness, we set regular meetings, and employees can meet us or phone us with their concerns.”
Pan Brothers takes a more proactive approach
Ludijanto was appointed as the vice-president director in 2002. Then, in 2010, he was elected to president director. He also holds several director positions at Pan Brothers’ subsidiaries and some non-subsidiaries. He came to the top job with plenty of ideas for the changes he wanted to implement at Pan Brothers.
“In 2009, I had already proposed a new way of working. Instead of just realising the customers’ designs, we would propose something new to them,” he explains. On becoming president director, Ludijanto transitioned the business from original equipment manufacturing (OEM) to original design manufacturing (ODM). “We’re not passively waiting for customers. We are actively pursuing them with new ideas and new developments – from fabrics and machinery to sewing techniques.
As a leader, Ludijanto strives to:
- Make sure all Pan Brothers employees understand the vision and mission of the company;
- Lead by example;
- Clearly communicate the company strategy;
- Streamline processes and eliminate unnecessary procedures.
“For two weeks every month, I travel to see the fabric supplier, the machine supplier, and the factories to find out what’s going on in the market. China is still a better exporter of garments – it’s much bigger than Indonesia – so there is a lot to learn from them, and other countries as well. I apply that knowledge to my own company. When I’m home, I always go down to the workshop to check quality, but also to show the team examples of new products on the market with better quality and complexity.”
“The fashion and textile industries are what we know best”
However, Indonesia does have some advantages over the competition, says Ludijanto. “The fashion and textile industries are what we know best, and we’re fast learners,” he explains. Plus, the labour supply is plentiful and relatively inexpensive. And he has high hopes for future trade with Europe, with a fair-trade agreement currently in negotiations. “This will then make Indonesia more attractive to other countries.”
Pan Brothers has also begun adding value by providing downstream services to some of its clients. “Some brands come to us seeking strategic alliances – not just leveraging our factory compliance and our downstream service, but also our financial strength,” adds Ludijanto. “And while we will still focus on garment manufacturing, I believe upstream investments in textiles, for example synthetic woven fibres, will give us the advantage of shorter lead times.”
Other plans include continuously expanding Pan Brothers’ research and development into new and better methods of garment manufacturing to provide the latest and highest-quality collections. “We have around 1,000 people on staff devoted to developing new samples. We are a leader of innovation in this business.”