TBI’s Financial Problems (Case Study #3) TBI Palembang

  Most people will never have heard of TBI Palembang, and there is a very good reason. Like TBI Bali, it was scheduled to open in 2012 but it has never come to fruition. 

    We have been to Sumatra 20 times in all. Diehard travellers, we have gone hiking in the Pasemah Plateau, ridden a motorbike around Pulau Samosir at Lake Toba, visited Batak Karo villages in the North Sumatra highlands around Berastagi, seen the orangutan rehabilitation centre at Bukit Lawang, chilled out at beautiful Lake Maninjau, visited the 12th century temples at Muara Jambi, laid on beaches in the Bangka-Belitung archipelago off the coast a number of times and viewed the British colonial sites in Bengkulu. While we have been depicted as ‘psychotic’ by various TBI types who this blog has exposed, a more accurate description would probably be serious travelers with a love of seeing new places. Clearly our ‘psychosis’ isn’t so advanced that we couldn’t organize a road trip!

   In these ramblings around Sumatra, we have often passed through the river city of Palembang, which is Sumatra’s second biggest city with 1.6 million people. South Sumatra has been booming over the past eight or nine years, with the province’s plantation belt of cash crops- sugarcane, pepper, rubber, palm oil and so on- fetching good prices on the world market. 6% growth has been the norm and new malls and hotels dot the skyline. Every other Indonesian change from a variety of service industries has found it worthwhile to open a branch there. This also applies to TBI’s competitor EF, which has maintained a large business there for the past 15 years.


   So what does it say about TBI that their much-discussed plans to open TBI Palembang (and TBI Bali) in 2012 came to nothing? Well, the first thing to note is that these were both supposed to be Group Schools. That means they had to use their own money, not that of an investor or franchisee to cover the costs. Uhuh. So once again TBI didn’t have enough money to open a new school. This goes with what we have been saying that TBI has long had cash flow problems and struggles to even pay utility bills and staff bonuses at times. (There is in fact a lot of money but it ‘disappears’ into the pockets and projects of a select few, without being reinvested in the business.) The business is being run so badly (with good old-fashioned nepotism and corruption being the main culprits) that it can’t even invest in its growth or future.

When did TBI last open a new Group School for the TBI Mafia to control and manage? The answer is 6 years ago in 2007. The last two schools to open were TBI Fatmawati and TBI Paskal. And pity poor TBI Paskal- as we showed in Case Study #1, TBI was so cash-strapped they sold off the ‘family silver’ ie. TBI Paskal just to solve their cash-flow problems! So TBI Head Office has now gone 6 years without opening a new school in a booming Indonesian economy which is some 30% bigger than it was in 2007. The bigwigs get together and discuss grandiose plans for opening new schools and talk about what a great thing TBI Bali would be for morale (imagine how many bules would want to work there!) but they just can’t get their act together, and the ghost of TBI Palembang- the school that never was- fades away faster than TBI’s reputation.

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