Sukanto Tanoto – Sustainable Entrepreneurship for the 21st Century

Sustainable Palm Oil

Sukanto Tanoto, who directs the work of multiple companies under the $15 billion corporate umbrella of the RGE Group, is an Indonesian-born entrepreneur who worked his way to success through his determined efforts and dedication to constant education and self-improvement. Mr. Tanoto continues to emphasize these values throughout his businesses and the philanthropic work of the Tanoto Foundation, which aims to provide educational assistance and to empower workers, students, and others in Indonesia, Singapore, China, and beyond Southeast Asia. In addition, he maintains a strong focus on the long-term sustainability of his companies and the communities in which they do business.

 

Sustainable Palm Oil

Sukanto Tanoto believes that environmental sustainability and a focus on the needs of all stakeholders are essential to long-term profitability and good corporate citizenship. His company Asian Agri, which is based in Indonesia, maintains facilities in three locations on Sumatra, partnering with local smallholder farmers to manage some 60,000 hectares of palm oil plantation land. One of the country’s largest such operations, Asian Agri, works to harvest its palm oil product in a manner that supports the conservation of the environment and empowers local farmers, as well as other considerations of the greater social welfare.

Under Sukanto Tanoto’s leadership, Asian Agri has delivered numerous economic, social, and educational benefits to its nearly 30,000 partner smallholder families. In addition, Mr. Tanoto has worked directly with Amanah, a smallholder palm farmer group, assisting members in earning certification in sustainability practices. In 2013, due to his support, Amanah became the first organization of Indonesian smallholders to receive such certification.

Recently, in an effort to encourage sustainable palm production among farmers, Asian Agri shared premiums or extra proceeds from exports totaling $220,000 with the representatives of Village Unit Cooperatives (KUD) in the Jambi and Riau provinces. The products produced through these farming methods have been well-received in the international markets.

Freddy Wijaya, general manager of Asian Agri, said that farmers have been encouraged to plant sustainable palm not only for the opportunity to obtain premiums, but also to achieve long-term sustainability.

European countries tend to favor sustainable palm oil because the production process does not cause environmental damage. Farmers have found more market certainty in Europe, where they have a wider margin and can cover greater production costs.

International authorities, writing in peer-reviewed journals, have described this type of sustainability entrepreneurship as providing responsible stewardship of resources, as well as long-term opportunities for worker advancement, in addition to the traditional entrepreneurial emphasis on profits. A concentration on sustainability also tends to drive companies in the positive direction of increased innovation in products, processes, and services.

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.

Sukanto Tanoto – Indonesia’s Seventh Richest Businessperson

Royal Golden Eagle’s Desires to Go Green

With the stack of complaints and protests from people and the society in Indonesia due to the company’s operation that allegedly damages the environment, Anderson Tanoto, the next-generation leader of the company stated the company’s intention to work on the issue. This future leader of Tanoto’s business empire gives hope to the Sumatran environment by taking different approach to the environmental concerns that have long overshadowed the family’s business.

Commitment for the environment

Anderson Tanoto, 24, is now pledging the long-term commitment of the company towards Indonesia’s environment. He stated his willingness to reset the company’s relationship with the green activists who have protested and criticized the company’s practice in pulp and paper business sector. In a gathering held July 2013 in Kerinci, Riau, Anderson told the media about the importance to give second generation leaders an aspiration to become more interactive and value the role of environment while keep the business running. It is also one of the ways towards a better world.

RGE to be More Transparent

Tanoto’s businesses have suffered lots of accusations when it comes to environmental matters. The youngest son of Sukanto Tanoto is currently serving as an assistant manager at Asia Pacific Resources International Limited (APRIL), which focuses on pulp and paper production.

In accordance to his statement, some business analysts said that Anderson is the favorite successor to continue Tanoto’s family business by widening the business focuses from pulp and paper to agriculture. As we already know, the pulp and paper business has become a regular object for the green activists to voice their protest because its business activities considered damaging the environment, due to the massive deforestation in order to get the primary materials for the production.

However, instead of remaining silent, Anderson took the chance to speak up about the company’s intention to fix the relationship, and avoid pointing fingers at the campaigners. The company has also prepared budget for Kampar restoration for about $17 million.

Sukanto Tanoto – Indonesia’s Seventh Richest Businessperson

Sukanto Tanoto – Indonesia’s Seventh Richest Businessperson

Being successful in establishing and managing his business kingdom, Sukanto Tanoto, the chairperson of Raja Garuda Mas (RGM) is listed in the Indonesia’s richest tycoon. According to Forbes magazine, by 2012, Sukanto ranks the seventh as the richest businessperson with assets more than US $2.8 billion or equal to Rp 26.6 trillions. Although his net asset has fallen by $500 million from 2011, Sukanto is still capable of recording fantastic revenue values, derived from his companies.

Beginning of career as businessman

The decrease was mostly due to the low estimated profit margin at one of his companies, Asia Pacific Resources International Limited (APRIL). With his assets, Sukanto Tanoto also sits in the 503rd wealthiest person in World Billionaires List. Born in Medan, North Sumatra, Indonesia, Sukanto Tanoto accumulated his assets, worth of US $2.8 billions, through some of his companies with offices in some areas in Indonesia and abroad, including in Singapore, Jakarta, Hong Kong, Beijing, and Nanjing.

Starting his career as an underdog, Sukanto Tanoto continued his family business at the age of 17 by supplying spare parts to the oil companies and construction industries. After the death of his father, he took over the family business and managed to establish the main and foremost pulp and paper company in Asia. Not only that, Sukanto also managed to make his company enter the New York Stock Exchange, which makes it such an extraordinary achievement. His companies are playing in various sectors at the present, such as palm oil, paper, construction, and energy resources.

Lots of Hardship, Lots of Gain

Mr. Tanoto is capable to reach his position today through hardships and hard works. His mother’s strong character is the one that helped shape his character and led him to become a decisive businessperson today. In addition, Sukanto Tanoto also has a great willingness to help the community by establishing Tanoto Foundation, which focuses on the development of human resources in Indonesia.