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".
Sukanto Tanoto is a man who wears many hats. He is a dedicated family man, a caring boss, a passionate philanthropist, and a firm believer in community development. Some might even say that he could double up as a part-time philosopher. Yet people more often know him as the charismatic chairman and founder of RGE, the global natural resource giant. It’s not hard to see why. RGE is truly an empire; it manages several other big names in the industry such as APRIL, Sateri, and Pacific Oil and Gas – the companies collectively employ 60,000 people and own assets worth over USD 18 billion. That Sukanto Tanoto built all this in just 50 years, only affirms his legend amongst those in the know.
Breeding success, together, for everyone
More impressive than his staggering success, however, is his principle-based approach throughout. The billionaire entrepreneur espouses the 5Cs: creating good for the Community, Country, Climate, Customer, and Company. It is a philosophy of creating shared value, one that Sukanto Tanoto firmly insists on. And his companies have taken heed too, with many community development initiatives sprouting up as a result. Consequently, individuals and communities have benefitted from Sukanto Tanoto’s philosophy – one such example is Husni Thamrin.
Local entrepreneur soars with APRIL’s Community Development Programme
Today Husni is a successful businessman who runs PT Nilo Engineering, a heavy equipment and truck rental company, with his wife Rohani. His company is a relative behemoth in the local area, with assets totalling Rp 100 billion. While he may have success today, it wasn’t all rosy for Husni. The 37 year-old first joined APRIL’s Community Development programme in 2001, with only his father’s truck to kickstart a garbage transportation company. As a result of the structured approach used by Sukanto Tanoto’s APRIL in the Community Development Programme, Husni received both training as well as avenues to beef up the economic resources available for him to beef up his business. In addition to his natural savviness for business, it was only a matter of time before Husni would take off.
Today, Husni’s fleet includes 30 heavy equipment and 25 trucks, all of which are rented by PT RAPP, APRIL’s Indonesian subsidiary. He is thankful for the Community Development Programme, for having nurtured many other entrepreneurs like him.
Businessman and philanthropist Sukanto Tanoto, founder of RGE, its various business groups including APRIL and Sateri, and the Tanoto Foundation, has always emphasised the importance of creating shared value for the stakeholders. It is best encapsulated in his 4Cs philosophy – to create good for the community, country, climate, and company. It is this same philosophy that has been ingrained within the processes all his organisations; this stakeholder-centric view has allowed organisations led by Sukanto Tanoto to become the best in their fields. In a recent visit to APRIL’s facilities, 26 educators were left feeling thoroughly impressed by the impressive work being done within the company.
Educating the educators: APRIL at the forefront of industry practices
As part of a programme to introduce APRIL’s successful applications of plant nursery technology, the educators were brought on a visit to facilities including the RGE technology centre, the APRIL information centre, as well as the farms belonging to partners from the APRIL Community Development (CD) programme. The visit provided an insight into the processes, initiatives, and achievements of Sukanto Tanoto’s pulp and paper giant.
APRIL’s commitment to education and the community
Needless to say, the educators were left impressed. Een Kostini, a vocational school teacher who was impressed with the technology implemented by APRIL said, “In this industry visit programme, we see RAPP planting plants in accordance with the learning activities in school, then there is the technology we want to learn such as how to give water, maintenance and so on”. More than that, the educators were heartened by APRIL’s conservation work, with their efforts being described as ‘complete’, and ‘beneficial’.
The visit marked yet another example of APRIL’s commitment to improving education in the local communities, with educators given first-hand evidence on how theory was brought into practice. More importantly, these purveyors of knowledge were given a peace of mind that their young charges, some of them apprentices-to-be at Sukanto Tanoto-led APRIL, would be in safe, and green hands.
For the fourth consecutive year, Sateri Holdings Limited received an award from the prestigious publication Capital Weekly. The publication’s Listed Enterprise Excellence Award recognizes companies that demonstrate outstanding abilities to develop high-quality corporate governance structures, nurture positive investor relations, and deliver significant returns on investment through maintaining sound business strategies. The award additionally promotes corporate social responsibility by acknowledging major CSR contributions on the part of the honored companies.
Sateri Holdings is part of the internationally known RGE Group headed by Indonesian entrepreneur and philanthropist Sukanto Tanoto. Listed on the Hong Kong Stock Exchange, as well as the Hong Kong Small Cap Index of Morgan Stanley Capital International, the company focuses on production of the viscose staple fiber that is a vital component in the manufacturing of medical and personal care supplies, textiles, and other consumer products. By the start of 2015, Sateri had moved out of other aspects of its operations to concentrate solely on its viscose staple fiber business. Sateri now does business only in Mainland China as a brand within the Pacific Viscose Limited group.
Sukanto Tanoto, who grew RGE from a small family-run business into a multi-faceted natural resources manufacturing firm worth an estimated $15 billion, works to promote the interests not only of his companies, but also of his country and community. This is one reason the CSR aspect of the Capital Weekly award is particularly meaningful.
Capital Weekly, published in Chinese in Hong Kong, is devoted to delivering news about the international investment market, trends in the global economy, and political events that affect money and trade. The publication takes both a micro and a macro look at developing stories, and offers its readers guides for investing over the short, medium, and long term. Capital Weekly’s publisher, South China Media Limited, believes that it fills a need not supplied by other financial publications, in that it aims to include a range of viewpoints and commentary from multiple perspectives.
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.
Sateri Holdings Limited, one of the world’s leading producers of wood pulp cellulose and viscose staple fiber, recently earned a fourth consecutive award for its business practices from the prestigious business publication Capital Weekly. The magazine, based in Hong Kong, regularly presents its Listed Enterprise Excellence Award to companies operating in its administrative region. In 2014, only 18 companies out of a total of 1,500 met the publication’s criteria for success in general business strategy, dedication to corporate social responsibility, and best practices in corporate governance and investor relations. Sateri is one of the companies operated under the $15 billion RGE Group, founded by Sukanto Tanoto, one of Indonesia’s most prominent businessmen.
The Capital Weekly award only recognizes companies performing at the top of their game. For example, in 2010, international sports apparel manufacturer China Dongxiang (Group) Co., Ltd., received the award, as did NVC Lighting Holding Ltd., also one of the world’s leaders in its field. In 2012, the Hong Kong-based utility Towngas earned its second consecutive Capital Weekly award in acknowledgement of its 150 years of providing a reliable and safe source of energy for the region. In 2013, Luk Fook Holdings (International) Limited, which maintains more than 1,300 retail shops worldwide, was among the companies so honored.
This year, Sateri shared the Capital Weekly acknowledgement with several notable corporations, such as e Lighting Group Holdings Limited, a leading Hong Kong-based designer and seller of furniture and lighting products established in 2003.
At the time of the award, Sateri had recently announced a move toward a more focused business strategy by selling off its viscose staple fiber operations. The company will concentrate on its dissolving wood pulp business, particularly the high-value specialty grade market. Because of the very high purity of its product, and its widespread demand in a variety of industrial applications, the dissolving wood pulp division promises to deliver the best return on investment to shareholders. In addition, because of the multiple difficulties associated with entering this tightly focused market, Sateri is well positioned to increase its dominance of the industry.
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 November 2014, Indonesian palm oil production company Asian Agri announced its certification at the ISCC PLUS level for the crude palm oil produced at all its mills. The event distinguishes Asian Agri as the largest producer of crude palm oil operating in Indonesia under such certification. The company had previously obtained ISCC certification for its palm kernel processing operations. The independent testing and verification organization SGS Germany provided the certification.
The ISCC (International Sustainability & Carbon Certification) program grants verification of a company’s compliance with relevant environmental best practices regarding sustainability and greenhouse gas emissions. In 2011, the ISCC system achieved recognition from the European Commission as one of the first certification programs to comply with the European Union’s Renewable Energy Directive of 2009.
The ISCC’s global system can be applied to multiple types of biomass products, and it provides a single framework that simplifies international commerce for a variety of businesses. Furthermore, the ISCC program looks at supply chains in their entirety, examining the process at every point from farm or field to end-user. This makes traceability up and down a supply chain far easier. To date, the ISCC has issued close to 5,000 certificates to forward-looking companies such as Asian Agri.
Through the ISCC PLUS certificate, Asian Agri demonstrates its ongoing commitment to economic, environmental, and social sustainability. The new certification will allow Asian Agri to increase its presence within the global marketplace, and to serve as an example for other palm oil production companies in maintaining environmentally sound operations. For this reason, Asian Agri also stands poised to assume a leading role in advertising the Indonesian palm oil industry as a significant player in the global sustainable economy.
Asian Agri, which works with some 29,000 smallholders families, is one component of the $15 billion RGE Group of corporations under the direction of founder and CEO Sukanto Tanoto of Indonesia. With operations established in 1979, Asian Agri now oversees 160,000 hectares of production land.
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.