Niluh Djelantik Designer Part of Tanoto Entrepreneurship Series

 In late 2014, the Tanoto Entrepreneurship Series once again hosted businesspeople who have distinguished themselves by their success in Indonesia. A project funded by the nonprofit Tanoto Foundation in partnership with the economics faculty at Universitas Indonesia, the lecture series has previously drawn luminary speakers such as Indonesia’s recently elected president, Joko Widodo. As part of the Tanoto Foundation’s goals of supporting individual entrepreneurial development and public education programs, the series strives to offer students practical knowledge based on the experiences of well-known businesspeople.

Niluh Putu Ary Pertami, the designer and creative director behind the luxury footwear brand Niluh Djelantik, joined Garuda Food CEO Sudhamek AWS to take turns at the podium. Niluh, whose brand is now available in fashionable European retail outlets, gained her love for style early in life. During her youth on the island of Bali, her family was not wealthy, and her mother routinely bought Niluh’s school uniforms and shoes several sizes too big, in order to economize the cost over several years’ growth. However, her mother also encouraged her ambitions, and sent Niluh to study business in Indonesia’s capital city of Jakarta. There, the young entrepreneur learned organizational and professional skills through both study and practical, on-the-job training.

Niluh Djelantik Shoes
Niluh Djelantik Shoes

Her lecture to the Tanoto group of student entrepreneurs focused on her experience as the head of a brand that it took her a decade to launch from one small local manufacturing shop onto the international stage. She believes in seizing opportunities as they arise and dedicating constant attention to improvement and innovation.

Sukanto Tanoto’s RGE Group of corporations, through its founder’s vision and dedication, has earned a significant share of the world’s business in energy development, palm oil and wood pulp production, and other manufacturing industries. Mr. Tanoto’s personal and professional focus on constant analysis, development, and innovation echoes the themes in Niluh’s address to the students. Through the Tanoto Entrepreneurship Series, he hopes to continue to assist emerging young business leaders with their efforts to drive economic and social growth in Indonesia.

Agribusiness Conference Promotes Corporate-Smallholder Partnerships

In October 2014, the Department of Agribusiness and the Faculty of Economics and Management at Bogor Agricultural University came together with the Indonesian Agricultural Economic Community (PERHEPI) to host a conference on the benefits of close ties between palm oil companies and smallholders. The experts at the conference lectured and led discussions on the theme “Partnership Programs between Palm Oil Companies with Smallholders to Increase National Income.” Many of the best practices they promoted are similar to those Asian Agri has maintained for more than 25 years.

The conference participants noted that the growth of Indonesia’s vital agricultural sector has been hampered by the poor conditions under which smallholders live, although the labor and dedication of these individuals contribute substantially to the nation’s economic development. Many smallholders experience economic discrimination, in that they are forced to accept prices for their products that are predetermined by brokers. In contrast, Indonesia’s palm oil production companies, including Asian Agri, have maintained strong partnerships with smallholders for the benefit of all stakeholders.

Asian Agri, one of the RGE Group of natural resources-development corporations under the direction of chairman and founder Sukanto Tanoto, has worked to develop positive plasma scheme partnerships with smallholders since the late 1980s. Like other progressive palm oil companies, Asian Agri provides agricultural, plantation management, and entrepreneurship training programs for its smallholders. In addition, Asian Agri’s emphasis on environmentally sound business practices led its team to offer premium payments in excess of $200,000 USD to its smallholders in Jambi and Riau Provinces who obtained certificates of sustainability.

Relationships with local village cooperatives, as well as with forward-thinking companies such as Asian Agri, have translated into profits and a higher standard of living for numerous Indonesian smallholders. The cooperatives regulate sales and promote proper agricultural techniques, enabling the farmers to generate a steady income stream each month. The Association of People’s Nucleus Company the Palm Oil Growers (AspekPIR) recently presented Asian Agri with an award in acknowledgement of the company’s efforts to improve the welfare of smallholders, particularly those working the land in Riau Province.

 

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Sukanto Tanoto – The Roots of a Self-Made Entrepreneur

Indonesian businessman Sukanto Tanoto, ranked among the richest individuals in his country, learned from an early age to prioritize hard work, responsibility, and charity. The son of Chinese-born parents who immigrated to Indonesia, Mr. Tanoto started off in business selling plywood products through his RGM company in the early 1970s. Now known as RGE Group, his $15 billion corporate family encompasses oil and natural gas products, as well as pulp and paper, palm oil, and a range of other agribusiness concerns.

Sukanto Tanoto’s father relocated from China’s Fujian Province to Medan, Indonesia, and began operating a small family business that sold the spare parts needed by oil and gas companies. Sukanto Tanoto, the eldest of nine children, was born the year his father went into business in Indonesia. From an early age, he assisted his father in the shop. By the time he turned 17, the young Sukanto Tanoto had to drop out of school to take over the business due to his father’s illness. Even so, the value of a good academic and practical education has been one of the driving forces of Mr. Tanoto’s life. He has continued on a journey of lifelong self-education in business and other fields. He has additionally taken high-level courses at The Wharton School of the University of Pennsylvania.

Young Sukanto Tanoto
Young Sukanto Tanoto

Building on his father’s experiences, the young Sukanto Tanoto developed an eye for detecting lucrative streams of income. From a staff of four, including himself, he grew the family’s spare parts business into a company with capital of $1 million inside of three years. His smart business sense led his company to take advantage of the growing demands on Indonesia’s oil industry during the global energy crisis of the early ‘70s. By his mid-20s, he had earned in excess of $10 million and controlled an international corporation.

Not content to confine his interests to a single commodity so dependent on the whims of the market, Mr. Tanoto went on to expand into timber products and palm oil production, often against conventional business wisdom in Indonesia. Although an old saying describes immigrant Chinese families’ limited business activities with the “three knives” metaphor—knives of the kitchen, tailor, and hairdresser—Sukanto Tanoto has developed his own business concerns in several sectors of the economy, and has expanded his generation’s ideas of what immigrant families can accomplish.

APRIL Partners with Community on Zero Burning

Riau Andalan Pulp & Paper (RAPP), a constituent company of Asia Pacific Resources International Limited (APRIL), was proud to award a recent community development grant of 100 million Indonesian rupiah to a local village successful in reducing fires on its lands. RAPP and APRIL are responsible for a large share of the production of wood pulp and paper products on the global market, and are part of the RGE Group founded by Indonesian-born entrepreneur Sukanto Tanoto. Because of Mr. Tanoto’s focus on following best practices in corporate citizenship and environmental stewardship, his executive teams place the welfare of local communities at the heart of their business operations. The grant to the village of Teluk Meranti in October 2014 rewarded that community for its efforts to implement RAPP’s zero-burning policy on its lands.

Teluk Meranti, part of the Pelalawan regency in Riau Province on the Indonesian island of Sumatra, is one of four village communities participating in RAPP’s pilot project, which is held during the summer dry season. Village chief H. Hasan, upon accepting the award from Pelalawan’s regent, described how his community would use the funds to improve local infrastructure. Other villages in the project include Pulau Muda, Sering, and Teluk Binjai.

RAPP Village Incentive Award

Fires in Riau’s villages, both on and outside of pulp- and paper-producing lands, often start as part of traditional community waste management practices. RAPP and APRIL have devoted extensive recent efforts to educating rural communities about the dangers associated with such fires, which can burn out of control and produce haze that reaches across the Strait of Malacca to Singapore.

The first reports received from the pilot project indicate that it has achieved overall success in reducing such potentially devastating fires. The program has gained extensive local government support, including that of the Pelalawan police department, as well as government entities dealing with environmental concerns, disaster response, and forestry.

RAPP Shows Off New Surveillance Quadricopter at Riau Expo 2014

At the 2014 Riau Expo trade and industry show, representatives of Riau Andalan Pulp & Paper demonstrated a safety-focused innovation. True entrepreneurship never runs away from constant innovation. RAPP always strive to innovate to create better products or processes that benefit the community, the country and the company.

Riau Andalan Pulp & Paper (RAPP), part of APRIL, or Asia Pacific Resources International Limited, recently participated with a demonstration booth at the Riau Expo 2014. RAPP and APRIL, part of the $15 billion RGE Group under the direction of founder and CEO Sukanto Tanoto, are among Indonesia’s most well-known natural resources manufacturing companies.

At the expo, RAPP representatives demonstrated the capabilities of the quadricopter, a new remote-controlled, helicopter-like aircraft that the company aims to use to monitor remote plantation lands. This is an especially important mission in the more isolated parts of Riau, where fires can break out and spread if unchecked, increasing haze conditions in the broader region. RAPP and APRIL have made significant progress in addressing safety concerns from environmental groups and local communities through their careful monitoring of fires and haze formation throughout their concessions.

RAPP organizers also provided information to visiting high school students and other expo attendees about its other recent initiatives, its community involvement programs, and current trends in the wood pulp and paper industries.

The Riau Expo, an annual event held in the provincial capital of Pekanbaru, promotes trade, tourism, and industry throughout the province, and also showcases the arts and cultural expressions of the people of Riau. This year, every available booth space was purchased, making the event a rich display of local knowledge and entrepreneurship. The networking opportunities at the expo additionally served to further new business connections and innovations.

Deputy provincial governor H. Arsyadjuliandi Rahman officially opened the expo, which took place from September 21st to 27th and commemorated the 57th anniversary of the creation of Riau Province. Organizers invited not only companies from the private sector, but provincial, district, and city government agencies to participate.

RAPP Booth at Riau Expo 2014
RAPP Booth at Riau Expo 2014
RAPP Booth at Riau Expo 2014
RAPP Booth at Riau Expo 2014

APRIL Responds to Opportunities and Challenges

One of the most important ability of an entrepreneur is adaptability – how do you react to opportunities and challenges? In today’s business world, there are factors that are changing all the time – from political changes, product changes, environmental changes and even changes in customers’ wants and needs. Being able to adapt alone is no longer enough because the time taken for a company to react tends to determine if the company is able to compete in the market. Thus, one needs to adapt and react FAST in order to remain as market leader. It is even better if there can be preventive measures taken to proactively address potential problems before they turn into a crisis.

Asia Pacific Resources International Limited (APRIL), headquartered in Singapore, operates as a fiber, pulp, and paper manufacturer under the RGE Group of companies directed by founder Sukanto Tanoto. APRIL recently noted that if newly elected Indonesian President Joko Widodo’s administration is able to meet expectations for an expansion of the country’s infrastructure, he could assist in growing the capacity of the paper industry by as much as 20 percent by 2016. The boom coincides with an increased demand for pulp and paper products from China and other rapidly industrializing countries in Asia. By 2015 alone, many experts believe, the pulp and paper industry could grow as much as 5 percent.

While demand for paper products has been on the decline in North America and European nations, largely due to an increased use of online resources to store and disseminate information, the push from the Asian market is expected to swell total global demand by about 2.6 percent annually in the coming years.

Industry experts based in Indonesia have noted an oversupply in that country’s pulp and paper market, and have commented on the need for government assistance to keep the sector competitive. In 2013, the total amount of paper products manufactured reached 6 million tons, nearly half of which came from facilities owned by Riau Andalan Pulp & Paper (RAPP), a subsidiary of APRIL.

In another recent development, non-governmental organizations have challenged APRIL and other pulp and fiber companies doing business in Indonesia’s Riau Province by claiming that fires set on company land had brought a smoky haze as far as Malaysia and Singapore. APRIL, which recently set up its APRIL Dialog website to provide greater operational transparency for the public, provided a detailed response.

Pointing to satellite images offered by the NGOs that purported to show the locations of numerous fires on APRIL concession lands, company executives noted that they found evidence for only a single fire detected in the specified time period. And that fire appeared to have originated within APRIL lands set aside for community use and not within the zones used for production.

A company spokesman also noted that APRIL, which maintains a strict “zero-burn” policy throughout its concessions, would have no logical reason to destroy the very natural resources essential to its operations. With a finite amount of land available for expansion, RAPP and APRIL understand that optimizing existing resources is key to corporate survival in a competitive market. And as a leader in its sector, RAPP has developed an understanding of its role in serving as a model of sustainable practices going forward.

And these, are just some of the ongoing changes in the industry that keep APRIL on their toes all the time.

Jusuf Kalla’s Statements during Tanoto Entrepreneurship Series 2013 Part 3

On the final post for Jusuf Kalla’s statements made during the Tanoto Entrepreneurship Series on 30 April 2013, he touched on the importance of having the right attitude during the start up and growth stage of a venture. In fact, attitude is one of the most important determining factors to the success of a business.

In any start up, the process has to be gradual and step by step; and hardships will definitely pay a visit during this process. RGE, owned by Sukanto Tanoto, and all the companies under the group, faced many difficulties and hardships throughout the growth stage of the venture. These difficulties vary from internal to external situations and come in different sizes. Nevertheless, having a high resilience enabled the company to always bounce back stronger after every crisis it faced.

Jusuf Kalla at Tanoto Entrepreneurship Series
Jusuf Kalla at Tanoto Entrepreneurship Series

Jusuf Kalla also mentioned the importance of innovation. Taking a glance at the businesses present in the market, many of them started because people were not comfortable in a certain situation, thus, were forced to think out of the box to innovate and improve. For example, the number of retail stores such as Seven Eleven, Alfamart or Indomart in Indonesia has grown significantly because people do not enjoy going to wet market anymore. They would rather go to stores that are clean and comfortable.

He also pointed out that given the better access to information and the availability of technology at your fingertips nowadays, it is relatively easier for young people nowadays to innovate. The point is to have courage to be an innovator and not a follower. Most of the innovations seem impossible at the beginning however, many of them were proven to be possible.

It is however, not wise to rely on intuition when making a decision. Even though it is true that a good intuition comes with a great deal of experience, Jusuf Kalla advised that we still need to carry out our actions based on calculated risks. This is because as an entrepreneur, absorbing the risks comes as a package together with the results we reap. In order to do an accurate calculation of risk, we need information as the basis. RGE has also invested heavily on Research and Development to continuously improve on their processes and products. Besides this, there is also a bottom-up continuous improvement activities that enable employees to spearhead innovations and process improvements.

Jusuf Kalla’s statements suggest that he will ensure the availability of necessary technology and internet access in the nation in order to support and provide the massive amount of information required in a growing economy.

Jusuf Kalla’s Statements during Tanoto Entrepreneurship Series 2013 Part 2

Following from the previous post, Jusuf Kalla also mentioned about the importance of building a good relationship between the business and the communities they operate in. Businesses can run smoothly and successfully only when it provides benefits to the communities. This is a two-way relationship because the communities they operate in have to respond positively to the daily operations of the business. What Jusuf Kalla shared is aligned with RGE’s 3Cs: a business must be good for the Country, Community and Company. RGE was founded by Sukanto Tanoto and as the Chairman of the group, he has a philosophy that he strongly believes in: once your business reaches a certain size, you cannot just take care of your company, but must also take care of the community.

Jusuf Kalla mentioned that a business has to determine the type of relationship they want to establish with the communities right from the start of their operations. He also mentioned that some companies have already done so, for example the companies under RGE, have been actively involving the community in their Corporate Social Responsibility programme. More than the companies, Sukanto Tanoto also founded the Tanoto Foundation with his wife, Tinah Bingei Tanoto, in order to specialize in the area of charity and philanthropy. Eventually a business depends on people to buy their products and services. It is therefore important to develop the people and community that the business serves in.

In the recent Indonesia Presidential Elections 2014, Jusuf Kalla ran for the Vice-President position and was paired with Jokowi, who ran for the Presidency title. The pair won the elections eventually and given Jusuf Kalla’s statements mentioned during the Tanoto Entrepreneurship Series 2013, we can safely say that he will continue to encourage businesses to be more active in community outreach and support programs, as well as emphasise the importance of business and community partnership to strengthen and improve both the corporations and community in the long run.