With this, digital transformation becomes an inevitability for cooperatives in the futureJakarta (ANTARA) - The Indonesian government has encouraged cooperatives to conduct amalgamation or merger as a strategy to bolster their competitiveness in a bid to persevere to develop their businesses in future.
The merger of cooperatives is not a new phenomenon and has been done by cooperatives in Indonesia since dozens of years, Cooperatives and Small and Medium Enterprises (SMEs) Ministry's Cooperative Deputy Ahmad Zabadi noted.
During the Digital Cooperative Transformation seminar observed here on Monday, Zabadi cited as an example the existence of Koperasi Unit Desa (KUD) before the reformation period.
The cooperative came about as a result of the merger between several business entities in one village and sub-district, he explained.
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The ministry recorded that several major cooperatives in Indonesia, such as Kospin Jasa Pekalongan, was the result of a merger between four cooperatives.
Consequently, the cooperative's assets reached around Rp12 trillion, with business management of over Rp20 trillion.
Moreover, Koperasi Telekomunikasi Seluler (Kisel) is the result of a merger between 11 cooperatives.
Kisel, one of the major cooperatives in Indonesia, with assets totaling around Rp7 trillion, was recorded to rank 98th out of the 300 major cooperatives in the world during the 2018-2019 period.
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Several non-cooperative companies, such as several State-Owned Enterprises (SOEs), also conduct merger. Hence, merger became a strategy to maintain and develop businesses to be able to compete in the current competitive era, Zabadi explained.
The government encourages the merger process for cooperatives that have been in operation and are facing difficulties in developing to become a major entity.
Merger will be more effective in terms of supporting power as well as business management development, and the management that they conducted already utilized information technology.
"With this, digital transformation becomes an inevitability for cooperatives in the future," he affirmed.
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Translator: Sugiharto P, Fadhli Ruhman
Editor: Fardah Assegaf
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