MSMEs Rise from Crisis

Resilience, creativity, and adaptability have proven key for micro, small and medium enterprises (MSMEs) in resisting and overcoming adverse conditions, particularly the heavy impacts of the Covid-19 pandemic.

KOMPAS/FERGANATA INDRA RIATMOKO

Sugeng Prayitno showed a pupet made from cardboard in Kampong Tidar Sari, Kelurahan South Tidar, City of Magelang, Central Java, Tuesday (18/10/2022). His cardboard made pupets widely use as educational tools.

The Covid-19 pandemic dealt a blow to many businesses, including home industries in Magelang, Central Java. Thanks to their resilience and creativity, some businesses have survived and emerged from the crisis. Among them is Sabila Craft, owned by Prajoko (58).

Starting his business in 1997, Prajoko initially created decorative crafts made from the horns and shells he supplied to souvenir producers in Bali. He later developed handcrafted products using scallop shells.

Inspired to scale up his business, he developed his skills further by taking part in an apprenticeship in Cileungsi, Bogor regency, West Java. Afterwards, he produced crafts in Bandung from 2002 to 2004. He decided to return to his hometown of Magelang in 2004, and has since continued his handcraft business.

also read

> Creative Power of Magelang’s Young Artists

> Festive Nights Lift Borobudur Economy

Prajoko employs up to 15 workers and produces a range of products, from tables to wall hangings, placemats and wooden cups to trash cans. He then founded CV Sabila Multi Kreasindo to facilitate partnerships with other businesses.

While continuing to supply his products to retailers in Bali, Prajoko also looked to expand the market by building a business network, so he participated in several exhibitions outside Magelang.

"In 2009, I met an exporter who was interested in buying our handicraft products," he said on Tuesday (18/10/2022).

KOMPAS/FERGANATA INDRA RIATMOKO

Workers among decorative crafts in Sabila Craft, Kelurahan South Tidar Selatan, City of Magelang, Central Java. Sabila Craft, owned by Prajoko, initially created decorative crafts made from horns and shells. later the local enterprise developed handcrafts products using scallop shells.

After the terms were agreed, products from Sabila Craft began to enter the United States, delivering products up to Rp 100 million per shipment. His business reached its peak in 2012-2013, adding up to 50 employees who often worked overtime to meet orders.

However, his export partner stopped ordering his products in 2017. Asked why the partnership ended, Prajoko said the company either went bankrupt or diverted its orders from Indonesia to the Philippines. He still received orders from Japan and Hong Kong, but the sales value was smaller.

"Because the number of orders drastically dropped, [I had] to lay off many employees," he said.

Adverse challenges

When the Covid-19 pandemic hit in 2020, Prajoko’s business plunged further. Sabila Craft completely stopped exporting its products However, Prajoko did not lose hope. He persisted against the adverse circumstances by taking part in business workshops, seminars, and online exhibitions.

In the midst of the unfavorable situation, he handed over the management of Sabila Craft to his son, Syarif Ihsanudin (24). Adapting its business to the digital era, Sabila Craft began to get back on its feet. It exported seashell crafts worth around US$33,000 (Rp 500 million) to Miami, USA, on Oct. 6.

To continue reviving its business, Sabila Craft is now running intensive product promotions via social media and expanding its network through cooperation with foreign trade agencies. "We are also committed to efficiency and internal evaluation," said Syarif.

The pandemic also affected entrepreneur Wachid Isrodin (46), who owns Laser Production, which produces miniature trucks and buses. He founded the business in 1998 after he was laid off from a truck cab manufacturing company.

He displayed his handcrafted products at the Kyai Langgeng tourism park in downtown Magelang

His knowledge in building truck cabs led him to making wooden miniature trucks to try and make some money to meet household needs. He displayed his handcrafted products at the Kyai Langgeng tourism park in downtown Magelang, where he sold up to 10 trucks over two weeks at Rp 35,000 per truck.

"I only sold on Saturdays and Sundays, when many people would visit Kyai Langgeng," said Wachid, who lives in South Jurangombo village, Magelang.

Some customers became regulars who purchased his toy trucks for reselling. Repeat orders also began to come in from Jakarta after he started promoting his products on social media in 2009.

“[We had] orders for up to 50 toys per month. I shipped the goods on [passenger] buses headed to Jakarta," he said.

However, the pandemic forced Laser Production to halt it operations. Wachid found himself selling young coconuts on the roadside to make a living source. Despite the drastic shift in his economic activity, crafting toys seems to be in his blood. During the pandemic, he observed that a different model of toy trucks, made from plywood with decorative lights, seemed to be booming.

The new model was made from plywood, and was smaller and lighter. With the helped of three friends, he launched mass production just last year.

He tried to restart his business by making some adjustments to his products. His previous products were made from the wood of sengon (Albizia chinensis), or silk tree, and were heavy. The new model was made from plywood, and was smaller and lighter. With the helped of three friends, he launched mass production just last year.

He and his friends now produce up to 300 miniature trucks per month, sold for between Rp 65,000 and Rp 70,000 and at a minimum order of 10 trucks. They also accept retail orders for Rp 110,000-Rp 120,000 per truck and serve the markets in Pekalongan, Demak, Surakarta, Cilacap, Yogyakarta, Medan, and Pontianak.

As the demand for model trucks has started to dip, they have begun to diversify the business by turning to producing miniature buses.

"It turns out that there is quite a lot of interest," Wachid said.

Innovation

Puppet maker Sugeng Prayitno (57) used to make his products exclusively from cowhide before innovating to making them from cardboard. When he first embarked on his business venture in 1990, he was well aware that selling leather puppets would be challenging because of the high price of the raw materials. Therefore, he tried making puppets from cardboard.

One cardboard puppet is priced between Rp 50,000 and Rp 350,000 depending on its size, while a leather puppet costs around Rp 1.25 million each.

The local administration is pushing home industries to develop into a more diversified handicraft industry.

For example, it has suggested that wooden toy makers produce miniature luxury motorcycles and cars, such as BMW and Lamborghini models, to target the upper middle consumer segment.

"Such products can be displayed at airports or malls, thereby increasing their value," said Syaiful, head of the Magelang Industry and Trade Office.

A number of local MSMEs, including Sabila Craft, Laser Production, and Sugeng Wayang, have been selected to participate in the Pawone Craft exhibition, a side event at the Borobudur Marathon 2022 this weekend. Their involvement in the sports event is expected to enhance the promotion and sales of their products, so their businesses can thrive in the future.

This article was translated by Musthofid.