Sukanto Tanoto – In an interview with Sukanto Tanoto, he was asked ‘What does it take to be successful in pioneering: create something out of nothing and what kind of people we need to lead this kind of business?" His reply was "people who take calculated risks".
The Tanoto Foundation works to support a wide range of educational efforts throughout Indonesia and beyond. In addition to its academic scholarships for college-bound young people of limited means, the foundation offers funding to assist teachers in furthering their own education. The Tanoto Teacher Scholarships not only increase teachers’ skills and knowledge, but also allow them to provide better education to their students. In keeping with the Tanoto Foundation’s overall goals, these benefits to teachers and students are a major contributor to economic growth in local communities and the nation as a whole.
Recently, two teachers who have benefited from Teacher Scholarships spoke publicly about the way the program has improved their lives and boosted their careers.
Dedi Santosa, a young teacher in a public school in Tanjung Jabung Barat in Jambi Province, Sumatra, began by describing the rigorous admission process he completed to earn the scholarship. The three-part procedure consisted of administrative paperwork, a psychological evaluation, and a series of interviews. Mr. Santosa had never taken a psychological test before, and he was challenged to complete some components of the admissions process in only a few hours. However, the financially struggling teacher, whose livelihood is based on honorariums, noted that his efforts paid off in offering him expanded opportunities for earning a good living.
A second educator, Myrta Andini, teaches elementary students in a public school in Sumatra’s Riau Province. She also found the admissions criteria challenging, but credits careful preparation with helping her to pass. Ms. Andini said that she first learned of the Tanoto Teacher Scholarship opportunity from her parents, and expressed her appreciation for the chance to increase her ability to provide a better education for her students.
Indonesian entrepreneur and billionaire Sukanto Tanoto created the Tanoto Foundation to help Indonesia’s people lift themselves out of poverty. Economic hardship forced Mr. Tanoto to leave his own formal schooling while he was still in his teens, but he went on to found the RGE Group, a now-$15 billion corporate family of natural resource manufacturing companies. Through his foundation, he supports education as a means of empowering the ordinary people who will increase Indonesia’s ability to compete in the global economy.
Sukanto Tanoto became one of Indonesia’s most successful executives through his hard work, ability to seize and make the most of business opportunities, and dedication to lifelong education. Mr. Tanoto heads RGE Group, a $15 billion corporate family that includes agricultural, forestry-based, and energy development companies. A former student at the prestigious Wharton School of the University of Pennsylvania, Mr. Tanoto additionally heads the nonprofit Tanoto Foundation, which works to deliver university scholarships, teacher training, entrepreneurship workshops, and other services with the goal of empowering Indonesia’s underserved citizens and making the country more economically competitive.
Mr. Tanoto understands the value of public-private partnerships in fostering innovation and strategic risk-taking among new entrepreneurs. That is the reason for his foundation’s sponsorship of regular lectures through its Entrepreneurship Series. The series hosts distinguished businesspersons who share their knowledge and experiences with the emerging generation of independent business leaders in Indonesia.
The series thus aims to assist the rapidly developing country with the goals expressed in the recent National Entrepreneurship Movement launched by former president Susilo Bambang Yudhoyono. In 2014, Yudhoyono went on record saying that, as one of the world’s fastest-growing economies in possession of abundant natural resources and untapped potential, Indonesia is poised to offer numerous opportunities to entrepreneurs, who can in turn give back to the country by contributing to its ongoing development.
In a recent article in Forbes magazine, United States Secretary of Commerce Penny Pritzker wrote of her address at the Global Entrepreneurship Summit held in Morocco, and made points that are particularly applicable to entrepreneurship in growing economies such as Indonesia’s. She believes in the power of peer-to-peer networking and mutual information-sharing among entrepreneurs, as well as in the necessity of government structures that support, rather than impede, the formation of new businesses. Among Pritzker’s ingredients for a thriving entrepreneurial culture are strong public-private-academic partnerships, a level playing field, and access to sufficient capital for everyone. In addition, she believes that governments must enact strong laws that protect intellectual property rights and make it easier for businesses to form and dissolve as needed.
At the end of November 2014, the Indonesian government’s Coordinating Ministry for Human Development and Culture and its Corporate Forum for Community Development presented the year’s Indonesia CSR Awards in a ceremony in Jakarta. Among the companies honored, out of a field of close to 40, were the RGE Group companies Riau Andalan Pulp & Paper, Asian Agri, and Toba Pulp Lestari. Founded by current CEO Sukanto Tanoto, a self-made entrepreneur, philanthropist, and one of Indonesia’s richest individuals, the $15 billion RGE family maintains a global corporate presence in pulp and paper milling, energy production and delivery, forestry operations, and palm oil production.
The CSR Awards each year provide the chance for Indonesia’s public sector to recognize successful community-building efforts by the private sector. In addition, the awards serve as a source of inspiration and examples of how effective corporate social responsibility programs operate.
In awarding a gold medal to Asian Agri for its Economic Empowerment program, the judges of the CSR Awards recognized the company’s partnership program between its PT Inti Indosawit Subur palm oil operation and the Amanah group of independent growers located in Ukui in Riau Province. The awards committee focused on the success of the partnership in implementing stated goals, and on the positive economic impact it had produced for members of local communities. Asian Agri’s officer in charge of corporate social responsibility, Benjamin R. Hutagalung, delivered a pre-awards ceremony presentation that offered details on the program.
Riau Andalan Pulp & Paper (RAPP), a division of the RGE company Asia Pacific Resources International Limited (APRIL), earned a silver medal for its work supporting a local loan and savings program in Teluk Binjai, Riau. Meanwhile, Toba Pulp Lestari’s two silver medals recognized its construction of a center to further early childhood education in Kabupaten Toba Samosir in North Sumatra, and its support for an evergreen nursery within the Taman Eden 100 conservation area.
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.
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.
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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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.
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.
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 entrepreneurSukanto 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.
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.