Posted 01 October 2006 @ 10:34
JAKARTA, 01 October 2006 - Forty names were crowned by Forbes Asia magazine as the richest in Indonesia. Three of them joined the list at the end of the economic and financial crises. They are Trihatma Kusuma Haliman (Agung Podomoro), Eddy William Katuari (Wings Group), and Arifin Panigoro (Medco Energi). What are their business secrets? Here is Tempo’s report.
Eddy William Katuari may well be an unfamiliar name to people in Surabaya, where he originally comes from, let alone in Indonesia. Indeed, his name is hardly ever mentioned in the media. Only certain circles, particularly among the business community, may be acquainted the boss of the Wings Group. However, Forbes Asia magazine, in its Monday edition last week, placed him as a new star in the Indonesian business world.
The name William Katuari is in the list of the country’s top 10 richest people. Today his name can be placed side by side with top businesspeople who frequently make the Forbes list, such as Rachman Halim (Gudang Garam), Liem Sioe Liong (Salim), Budi Hartono (Djarum), or Putera Sampoerna. Today, William ranks above Liem and Mochtar Riady (Lippo) on the list. Besides William’s, another surprise name is Trihatma Kusuma Haliman (Podomoro Group).
The financial crisis of 1997 didn’t just produce disasters, but blessings too. William and Trihatma are a few of Indonesia’s businesspeople who escaped the onslaught of the crisis sweeping Asia, at the same time that the old giants crumpled. Both were able to take advantage of the situation by transforming their companies into new giants in Indonesia’s business world. William grabbed the consumer goods business, while Trihatma put his feet in the property world, mostly in Jakarta.
Interestingly, the two are not new players. The Wings Group has been in business for the past 58 years, while Trihatma is entering its 40th year. The key, according to Trihatma, is how to deal or not to deal with debts. Both seem reluctant to take out huge loans. They are very conservative and rely more on their own capital. “During the crisis, William’s finances were very liquid,” said Dahlan Iskan, boss of the Jawa Pos Group. Trihatma admits having debts, but on a small scale. “If possible, I don’t borrow,” he says.
Their attitudes differ from those of other tycoons, who accelerated business expansions by taking out loans. Banks were established only to serve as cash cows. Many state-owned banks lost control and disbursed jumbo-sized loans. Not surprisingly, when the crisis hit and interest rates rocketed, their businesses collapsed under the burden of their debts.
In total, Rp600 trillion in non-performing loans must now be borne by the government and the people through a banking restructuring program. The businesses were asked to settle their debts or surrender their assets through the Indonesian Bank Restructuring Agency. This agency resold the assets to acquire the funds to bail out the banking industry.
William and Trihatma were sharp enough to spot the opportunities. Without losing time, they went after the assets, most of which were sold at low prices. William bought, among others, Salim Oleo Chemicals, a company that produced raw material for the soap and body care industry, previously owned by the Salim Group. Trihatma quickly bought up assets auctioned off by IBRA. “The 1997 economic crisis offered us opportunities. It was then time to buy,” Trihatma told Tempo.
Eight years later, it is now time for these enterprises to harvest the seeds they sowed. “Now it’s time to sell,” said Trihatma. The results have been extraordinary. He is currently in the process of completing 30 property projects in various strategic corners of Jakarta. The projects include Kelapa Gading Square, Mangga Dua Square, Senayan City, and The Pakubuwono Residences. His assets are estimated at more than Rp15 trillion.
The Wings Group, too, has transformed from a home industry in the suburbs of Surabaya into a conglomeration controlling many business sectors, ranging from toiletries to banks. The Wings Group is now on a par with multinational producers like Unilever (Dutch), Procter & Gamble (American), and Kao (Japanese). Besides not relying on loans, the two companies are extremely focused on their core products. Wings has stuck to its toiletries business, while Podomoro continues its foothold in the property business. “Until now we’re still focusing on property, though this may change,” said Trihatma. It’s no wonder they know their businesses thoroughly.
Additionally, both are low-profile companies, preferring to avoid publicity. “Silence is the company policy,” William Katuari told Tempo last week. His late father, Johannes Ferdinand Katuari, taught his children to focus on the core business. “You don’t need to be famous. It’s enough to let the goods become famous,” said Katuari senior. The same is true of Trihatma. He is virtually unrecognizable at the Senayan City shopping mall and offices. Every day, he saunters through it to monitor the nearly completed project and rubs elbows with visitors and employees alike in a lift—unnoticed.
Thanks to Forbes, which has displayed their names prominently, they can no longer keep a low profile. Their names have risen while their business value has gone up. William, however, remains humble. He still rates himself way below Unilever and Indofood. “We haven’t reached that level.”
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