Forbes Indonesia 2013 January (e magazine full)

Full E-magazine Forbes English version (copyright)

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JANUARY 2013

VOLUME 4 ISSUE 1 www.forbesindonesia.com

Dr Boenjamin Setiawan

HIS KALBE FARMA LEADS THE WAY IN HEALTHCARE

RP 50,000

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BTPN JAN 2013.pdf 2 12/19/12 6:26 PM

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2 | FORBES INDONESIA JANUARY 2013

Indonesia

10 | FACT & COMMENT // Steve Forbes

Where is Keynes when we need him?

12 | pUBlIShER’S lETTER // Jusuf Wanandi

What strategy should Indonesia set for its future?

16 | REAlITY ChECk // James Kallman

New year – new approach or same old story.

18 | FRESh ThOUghT // Taufik Darusman

In the presence of political shamans.

COMpANIES & pEOplE

28 | MARkETINg INSIghTS // Hermawan Kartajaya

“Anak Singkong” a presidential candidate?

BUSINESSMAN OF ThE YEAR

30 | MEDICINE MAN

At 80, Dr Boen has built Kalbe Farma into the country’s largest pharmaceutical

company, and still sees plenty of growth ahead

By Ulisari Eslita

37 | AgElESS AND pEERlESS IN AN ERA OF FABlESS

Morris Chang, 81, has lit another fire under TSMC, as it builds on his

chipmaking breakthrough Eyes now for Apple?

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JANUARY 2013 FORBES INDONESIA | 3

NISSAN

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MAYAPADA

www.bankmayapada.com

Mayapada Tower, Ground Floor – 3rd Floor Jend Sudirman Kav.28 Jakarta 12920 – IndonesiaPhone : +62 21 5212288, +62 21 5212300

Leading you to Indonesia

For over two decades, Bank Mayapada has proven to be a strong and reputable bank

in Indonesia We offer a wide range of financial services to meet our clients’ personalized

business needs supported by state of the art IT and knowledgeable staff With over than

170 branches in 19 provinces in Indonesia, Bank Mayapada will continue to serve the ever

growing economy in Asia.

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MAYAPADA

www.bankmayapada.com

Mayapada Tower, Ground Floor – 3rd Floor Jend Sudirman Kav.28 Jakarta 12920 – IndonesiaPhone : +62 21 5212288, +62 21 5212300

Leading you to Indonesia

For over two decades, Bank Mayapada has proven to be a strong and reputable bank

in Indonesia We offer a wide range of financial services to meet our clients’ personalized

business needs supported by state of the art IT and knowledgeable staff With over than

170 branches in 19 provinces in Indonesia, Bank Mayapada will continue to serve the ever

growing economy in Asia.

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ENTREpRENEUR

42 | lET ThEM EAT CAkE

Lal de Silva is the rare chef who successfully grew his own business

By Gloria Haraito

46 | SEwINg ThE SEEDS OF FORTUNE

A single sewing machine and an eye for detail helped Donda Hutagalung build a Rp 10 billion a year industrial clothing business.

ISSUES & IDEAS

52 | ACEh: EIghT YEARS ON

Columnist Scott Younger returned to Banda Aceh shortly before the eighth anniversary

of the tsunami to file this personal account of Aceh’s recovery from the tragedy.

58 | BUIlDINg A STRATEgIC RElATIONShIp

From multi-billion investments to K-Pop, South Korea’s Ambassador to Indonesia Young-sun Kim see a growing relationship between the two nations.

By mEE-HyoE alana Koo

60 | A ChAT wITh ThAkSIN ShINAwATRA

Forbes Asia caught up with deposed Thailand prime minister Thaksin Shinawatra

in his Dubai refuge

66 | DElIVERINg INFRASTRUCTURE // Raj Kannan

Infrastructure crisis—time for an “IBRA-like” agency for infrastructure.

68 | lEgAl VIEw // Eddy Leks

The challenge of minimum wage increases.

70 | CEO wISDOM // Andrew Tani

CEOs, pay attention!

71 | glOBAl VIEwpOINT // Jennie S Bev

Will a financial bubble pop in 2013?

lIFE

72 | DANCINg FOR lIFE

After 37 years as a performer, Didik Nini Thowok remains an icon

for cross-gender dance in Indonesia

By sonya anGraini

74 | lIqUID gOlD

The modest but growing market for rare whisky has investors

seeking big returns dram by dram

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BLUE BIRD

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Editorial dEPartmEnt

Chief Editorial advisor Justin Doebele

Editor-at-large Taufik Darusman

senior Writers Ardian wibisono

Writers Ulisari Eslita, gloria haraito,

Renjani puspo Sari

reporters Sonya Angraini, Yessar Rosendar

art director Mirna lidya Aprilla

Photo Editor Ahmad Zamroni

Executive assistant Seli widiati

Editorial intern Mee-hyoe Alana koo,

Adelia Anjani putri, Arya Satya Nugraha

BUsinEss dEPartmEnt

Publisher Jusuf wanandi

associate Publisher grace wong

Circulation & subsription manager Andriansyah

Circulation Executive Desi Yulieta

Production manager Mudafid Riyanto

adv & sales manager Tanti Jumiati

senior advertising sales Executive Ade Sapto,

hilman Ahmad

Pr & Event manager Rafki Ismael

Executive assistant marketing Nancy heryana

accounting manager Indrawati Sonjaya

accounting supervisor Inge Stephanie

accounting Executives Ary purnomo

administrative assistant Fitriyah

Pt WaHana mEdiatama

President director Millie Stephanie

Vice President director Victoria Tahir

President Commissioner Jonathan Tahir

Vice President Commissioner Maria lukito

ForBEs mEdia llC

Chairman & Editor-in-Chief Steve Forbes

President & CEo Mike perlis

Chief Product officer lewis D’Vorkin

President & Publisher, Forbes asia

william Adamopoulos

Editor, Forbes asia Tim Ferguson

FORBES INDONESIA

siDelines

In December, Forbes Indonesia held its second annual Best of the Best

awards and gala dinner The event was graced by the Coordinating Minister for Economic Affairs Hatta Rajasa and Forbes Vice Chairman Christopher Forbes The event was to recognize the top 50 best performing listed companies

in the country and it was attended by more than 350 VIP guests The event was

well covered by the media, and Forbes Indonesia also worked with Metro TV to

produce a special program aired on that channel about the event

The event neatly capped off another successful year for the magazine Among this year’s highlights were some notable cover stories:

• Garudafood’s Sudhamek in February, discussing his plans for an IPO

• Minister Dahlan Iskan in April for our special state-owned enterprises feature, appearing just after he made headlines taking control of a tollgate

• Astra’s Prijono Sugiarto in May, coinciding with the 55th anniversary of Astra International’s founding

Some other important articles were on KPK’s Abraham Samad, Yogyakarta’s Sultan Hamengkubuwono X and BKPM’s Chatib Basri

In events, aside from our December event, we held in May our first Leadership Forum on the State Owned Enterprises, well attended by senior figures from the state-owned sector plus Minister Dahlan In that vein, this year our Forbes Global CEO Conference, the biggest and most prestigious event held by Forbes worldwide, will be held in Bali in September, the first time for it

to be in Indonesia, after visiting many other places such as Dubai, Hong Kong, Shanghai and Singapore

Our readers were also offered an exclusive excerpt from Jusuf Wanandi’s newest book, “Shades of Grey” in August We are now strengthening that relationship with Jusuf and are pleased to announce that starting with this issue, he will join us as publisher As many may already know, Jusuf is senior fellow and co-founder of the Centre for Strategic and International Studies, vice chair of the board of trustees of CSIS Foundation and the chairman of the Prasetiya Mulya Business School He also has an unmatched journalism

background as president director of the Jakarta Post, and as a prolific editor,

writer and commentator

We are honored to welcome him in his new role He will continue as well to

be a regular columnist for the magazine and has a special column in this issue about what strategy Indonesia should have for its future, an apt topic for the first issue of the year We are looking forward to another good year, and we hope the same for our readers

Looking Back

and looking ahead

ForBEs indonEsia is published by PT Wahana Mediatama under

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FORBES LLC.

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price Rp 50,000, local subscription rate

Rp 420,000 + postal fee (Jabodetabek) for 12 issues.

JANUARY 2013 • VolUme 4 IssUe 1

Indonesia

Justin Doebele Chief Editorial Advisor editor@forbesindonesia.com

CorrECtion:

In our last issue, on p 36, we identified Tahir as being 62 with three children He is 60 with four children On p 38, Kartini Muljadi’s name was reversed We apologize for these errors

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FAct & comment — steve FoRBes

FORBES INDONESIA

“With all thy getting, get understanding”

British economist John Maynard

Keynes because he gave intellectual

respectability to what politicians love

to do: spend other people’s money

Keynes was also an enemy of plying

taxes when economies are wobbly,

yet his supposed heirs are today

crushing consumers and businesses

with ever heavier exactions in the

face of economic weakness There

hasn’t been such a destructive binge

of balancing budgets via taxation since the early

1930s The results were catastrophic then and

won’t lead to a happy outcome today

France, Spain, Portugal, Greece, Italy and

others are boosting levies on all sorts of things,

while making minimal structural reforms to

their bloated public sectors and their antigrowth

regulations Japan is an even worse offender Its

tax-increase binge is one of steroidal proportions

It’s no surprise Japan’s economy is careening

into recession Its third-quarter GDP crashed to

an annual rate of –3.5%

All of this self-destructive activity makes

our own leaders’ performance more bizarre We

have a President whose party’s policymakers

supposedly worship Keynes Yet they are pushing

for tax increases that would make Keynes cringe

Any solution to the fiscal cliff involving tax

boosts of any sort should be fiercely resisted Any

promises of genuine spending cuts will prove

to be illusory, as they always do But burdening

investors and capital creators even more is

self-defeating when it comes to economic growth

Republicans should stop fighting on

Democratic turf Instead they should

immediately come up with vigorous pro-growth

proposals and proclaim 24/7 that the debate

should be about how we expand the economy quickly and substantially There’s no secret as to how to do

that: institute sound money, lower

tax rates, dismantle the Frankenstein horror of Obama Care and halt the blizzard of regulations soon to come from the EPA, financial regulators, the FCC and numerous other government bodies Republicans should endorse the concept of a flat tax as the goal of tax simplification—

if you make money, you pay on it

The GOP should quickly print a booklet of exciting Reaganesque ideas and wave it at every opportunity as Mao’s followers did with the Chairman’s Little Red Book decades ago

Republicans must repeat this mantra: Don’t fight by White House rules; fight by optimistic, dynamic and very American Ronald Reagan-like rules

whERE IS kEYNES

whEN wE NEED hIM?

By stEVE ForBEs, Editor-in-CHiEF

Another fiscal cliff looms in March Once again

we will hit the national debt ceiling, which will have to be raised The GOP will want to enact a price of slower spending This is always a loser for Republicans because they’re easily portrayed

as willing to stop payments for Social Security, Medicare and everything else people hold dear.The GOP should move to enact another way

to brake spending Instead of a ceiling, they should go for spending as a percentage of GDP David Malpass and others argue that such a change can be both effective and a political winner, even if the Senate and the President block it for now f

Fiscal Cliff II

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pUBlisheR’s letteR

JUsUF WAnAnDi — vice chAiR, BoARD oF tRUstees, csis FoUnDAtion

been relatively successful Repeated crises have shaken the system at rising frequency and severity as great economists such as Joseph Schumpeter and John Maynard Keynes and many before and after them have pointed out Yet the system always comes out with renewed vigor, albeit with diminished credibility

Capitalism is sparsely equipped with measures of social justice

It relies instead on competitive mechanisms that reeks of “the survival

of the fittest” paradigm It also leaves great mass of citizens with little of the spoils as recently documented

by economists Emmanuel Saez and Thomas Piketty, whereby the top 1% income earners garner a disproportionate national income

To mitigate the apparent injustice of capitalism, governments put in place welfare mechanisms at different levels to compensate, with varying rates of success In parallel, the state

turns increasingly social by claiming

a larger and larger share in aggregate expenditure, again of course more so

in one country than in others

In the 21st century the state has

to face an increasingly complex set

of problems Some of them, such

as globalization, have haunted governments for a long time But others are new, such as the need to adapt to the increasingly binding limitation-carrying capacity of the earth and climate change The greater the complexity of problems society faces, the less effective the market becomes and the bigger role the state

is expected to play

In the Washington Consensus

of over 20 years ago the role of the state in economic control and production was reduced by way of deregulation and privatization In the realm of people’s welfare its role was reduced to the minimum It is falsely assumed that unleashing market forces would produce a just outcome But crisis after crisis struck under the Washington Consensus, and no continent was spared In the course of time the Beijing Consensus has gained

in appeal as the state is accorded

a much more active role, national differences are respected and financial self-reliance is deemed essential When the crisis hit at the core of capitalism in 2008, the indispensabil-ity of the state was vividly demonstrat-

ed by the manner with which it

extin-At the core of the forces

that drive human

development, and

improvement toward

perfection, are ideology

and human greed Ideology is most

obvious in communism, which

determines how the human race and

the economy are organized—the state

or the party decides what, how and for

whom to produce In most instances

this means state-run enterprises,

central planning and the egalitarian

communal reward system take center

stage In practice it differs across

national borders as we have seen in

the Stalinist system, the workers’

self-management of the now defunct

Yugoslavia, the state-communal

synthesis of Hungary and the peasant

communism of China

But in general the system is passé

except for one aspect that pertains

to distribution Social justice is

the hallmark of communism and

remains relevant today However, the

productive part of communism has

been a failure, as it is proven unable to

deliver what the people need for the

advancement of life In the end, there

was nothing to distribute and as such

the system as a whole collapsed

Capitalism, or more accurately

now the market system, where

personal and individual interests are

paramount and define the system,

has been tested out for a much

longer period and in general has

What Strategy ShouLd IndoneSIa

set for its future?

JUsUF Wanandi IS A SENIOR FEllOw OF ThE CENTRE FOR STRATEgIC AND INTERNATIONAl STUDIES (CSIS), AND ThE CO-FOUNDER AND VICE ChAIRMAN OF ThE CSIS FOUNDATION, BOTh BASED IN JAkARTA hE hAS wRITTEN AND EDITED ExTENSIVElY ON INTERNATIONAl ISSUES.

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guished the flame of the crisis Its role

is going to be even more critical in

solving the debt crisis which is partly

the consequence of the banking crisis

of 2008 Whatever the chosen

solu-tion it is bound to leave a political

di-vide in both the European Union and

the U.S with unknown consequences

to the world economy

Needless to say, a different kind

of discourse on the role of the state

is taking place in China Through the

central and provincial governments

and state-owned enterprises, the state

has been playing a dominant role in

the making of the “Chinese miracle,”

perhaps the greatest event in recent

human history Sustainability of

state-led strategy is anything but assured in

an environment of demassifying and

decentralizing technology changes,

social media being a prime example

Hence, the state-led strategy is also at

a crossroads

Emerging out of the ashes of

co-lonialism, Indonesia opted almost by

necessity for a Fabian-type of

eco-nomic constitution Seeking to

prac-tice a third way with socialist

lean-ings, it crawled on a Sisyphean path

with a deep trough in the mid-1960s,

after which a crisis opened a

win-dow for market-friendly reforms that

almost instantly attracted a big wave

of foreign direct investment

Flow-ing with the WashFlow-ington Consensus a

big-bang deregulation was launched

in the 1980s Ironically, it ended up

in the crisis of 1997-1998 marked by a

period of anarchy, misery, poverty, and

social strife Economically bankrupt

Indonesia had no choice but to sell

some state-owned enterprises and a

large number of private enterprises to

international investors

Indonesia has recovered

economi-cally and has ascended with stability

toward democracy at a painstaking

pace after 40 years of autocracy It is

now placed by international investors

in a respectable position However, as

the nation regained strength

prob-lems of nationalism also rose—partly

as a reaction against globalization—as

they also do across the globe Here, many Indonesians resent outsiders owning assets considered critical to basic needs such as staple food, vital infrastructure, oil, natural gas, coal and other natural resources Rising inequality, which is one of globaliza-tion’s ugly sides that is exacerbated by rampant corruption, abuses of politi-cal and market power and its associ-ated rent-seeking practices, fuels na-tionalism even more

capitalist approach or method for the pursuit of human happiness and is willing to participate actively in the debate on Indonesia’s future develop-ment and modernization A shared modernity in Indonesia requires a trinity of reforms First, to sustain an inclusive growth a more explicit lean-ing on market mechanisms is needed

many indonesians resent outsiders oWning assets considered critical to basic needs such as staple food, vital infrastructure, oil, natural gas, coal and other natural resources

Second, to glue society with a mon endeavor for a better tomorrow, inclusive measures of social protection are needed as well as social protection that must be as market-conforming as possible Third, to balance the market and inclusive measures the proper role

com-of the state needs continuous ment that focuses on aiding citizens to accelerate attainment of better health, access to educational facilities and ac-quisition of entrepreneurship skills or social capital

align-Simultaneous progress in the trinity of reforms or a grand policy coherence is the core challenge of Indonesia’s medium-term policy as it works itself up to become an upper-middle income nation Assuming Indonesia progresses, it will then have created an escape velocity in ways many in East Asia have in the past f

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AUTO ONE

PT Auto One Group, the official

authorized dealer of the brand

and also, the biggest dealer of

Chrysler in Indonesia, is having

a stellar performance and is looking

beyond expansion but also catering

to the needs of its premium car

own-ers, whom can be very demanding

“As the authorized dealer, we’re

always looking to cater our

custom-ers with the most complete collection

for their needs and the best service in

town,” Wisly Jayadi, the branch

man-ager of Chrysler Pondok Indah under

Auto One, said

Chrysler has 5 branches in Jakarta

, namely: Chrysler Pondok Indah ,

Slipi, Jatiwaringin, Kelapa Gading, Gatot Subroto, but the Pondok Indah branch in Jalan Sultan Iskandar Muda, operated by Auto One is the most complete of them all The number

of Chrysler dealers will continue to expand to meet demands

The dealership sells Completely Built

Up (CBU) cars imported all the way from the heart of the United States automotive capitol in Detroit The cars available ranges from, the Chrys-ler 300C, various Jeep variants, and Dodge Journey SUVs

“In an agrarian country like sia, big cars are the preferred way to travel In this case, the Jeep stands

Indone-out But, it is not always about size

We also have the elegant luxury sedan Chrysler 300C and the 300C SRT-8, and the Dodge models which are suitable for daily use,” he said.The Chrysler price starts at Rp 1.1 billion, the Jeep starts at Rp 600 mil-lion, while Dodge is priced around Rp

500 million

Wisly said that Jeep is the best seller here due to its heritage as a durable all terrain military car

As for the Chrysler and Dodge, he added that the models are better than its competitors in their respec-tive classes because of its price-to-performance value

“A good family man would say Dodge Journey Platinum is the best choice for the whole family because

it combines luxurious interior and

an ALPINE Premium Sound System which will make you feel like home It also comes with a sophisticated GPS navigation,” Wisly said

“The Chrysler 300C features an egant and masculine design Its Pen-tastar 3.600 cc V6 engine is capable

el-of generating a powerful 286 horse power Driving this car will boost your confidence and will certainly makes you the center of attention,”

he added

For Chrysler and Auto One, customer satisfaction is greater than sales fig-ures Wisly said the aftersales service covered your standard home pickup

SPECIAL ADVERTISING SECTION

Chrysler Indonesia

Chrysler, the Detroit-based car manufacturer, officially debuted in Indonesia in 2011 and it has made a strong statement in a market still dominated by Japanese and European players Chrysler is here to stay.

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AUTO ONE

PT Auto One Group, the official

authorized dealer of the brand

and also, the biggest dealer of

Chrysler in Indonesia, is having

a stellar performance and is looking

beyond expansion but also catering

to the needs of its premium car

own-ers, whom can be very demanding

“As the authorized dealer, we’re

always looking to cater our

custom-ers with the most complete collection

for their needs and the best service in

town,” Wisly Jayadi, the branch

man-ager of Chrysler Pondok Indah under

Auto One, said

Chrysler has 5 branches in Jakarta

, namely: Chrysler Pondok Indah ,

Slipi, Jatiwaringin, Kelapa Gading, Gatot Subroto, but the Pondok Indah

branch in Jalan Sultan Iskandar Muda, operated by Auto One is the most

complete of them all The number

of Chrysler dealers will continue to expand to meet demands

The dealership sells Completely Built

Up (CBU) cars imported all the way from the heart of the United States

automotive capitol in Detroit The cars available ranges from, the Chrys-

ler 300C, various Jeep variants, and Dodge Journey SUVs

“In an agrarian country like sia, big cars are the preferred way to

Indone-travel In this case, the Jeep stands

out But, it is not always about size

We also have the elegant luxury sedan Chrysler 300C and the 300C

SRT-8, and the Dodge models which are suitable for daily use,” he said

The Chrysler price starts at Rp 1.1 billion, the Jeep starts at Rp 600 mil-

lion, while Dodge is priced around Rp

500 million

Wisly said that Jeep is the best seller here due to its heritage as a durable

all terrain military car

As for the Chrysler and Dodge, he added that the models are better

than its competitors in their tive classes because of its price-to-

respec-performance value

“A good family man would say Dodge Journey Platinum is the best

choice for the whole family because

it combines luxurious interior and

an ALPINE Premium Sound System which will make you feel like home It

also comes with a sophisticated GPS navigation,” Wisly said

“The Chrysler 300C features an egant and masculine design Its Pen-

el-tastar 3.600 cc V6 engine is capable

of generating a powerful 286 horse power Driving this car will boost

your confidence and will certainly makes you the center of attention,”

Chrysler, the Detroit-based car manufacturer, officially debuted in Indonesia in 2011

and it has made a strong statement in a market still dominated by Japanese and

European players Chrysler is here to stay.

service and a 24 hours towing vice, and other perks that you would not find anywhere else

ser-“Starting next year, for every chase of our car in Auto Onedealers, the customer will be given a JK One membership card This card would provide the customers with discounts

pur-in our selected partners and even free valet service in Jakarta’s high end malls,” he said

According to Wisly, this card is more than just discounts offers, but also a community identity which shows that you are a Chrysler, Jeep, or Dodge

owner “Be prepared to participate in our events next year”

Auto One is preparing events for the community, which will include gath-ering, off road, and charity

Chrysler Pondok Indah

Jl Sultan Iskandar Muda No 79E Arteri Pondok Indah

Jakarta Selatan Phone: (021) 700 11111

Auto One Group

Jl Letjen S Parman Kav 72 , Jakarta Barat - Slipi Menara Citicon Tower Lantai 3 Phone: (021) 2930 8684/5 (021) 68889761 www.autoonegroup.com

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ReAlitY check

JAmes kAllmAn

lieve he has loftier goals to play a role

on a global stage With a natural flair for statesmanship, it would come as no surprise to see him as a member of an

“eminent persons” group in the future

As we begin 2013, a man whose political star is in the ascendency is the new Jakarta Governor Joko Wido-

do, or Jokowi as he is more familiarly known The ex-mayor of Solo brings a freshness and vitality to his new posi-tion It remains to be seen how long this will hold true before frustration erodes his resolve to tackle Jakarta’s seemingly insoluble problems It is worth noting though that few gave him a chance of achieving much when

he was elected mayor of Solo back in

2005—how wrong they were

With the perspective of a businessman rather than a politician, Jokowi built on observations he made during his trips to Europe Noting how each city made the most of their cultural heritage, he determined that Solo could do the same Melding the talents of both citizens and the business sector, his administration succeeded in creating a sense of civic pride that was rewarded when Solo played host to the Organization of

great hopes that this

time around things

re-ally will be different and

for once we will live up

to our lofty resolutions All too often,

though, these are made in the heady

spirit of the holiday season, a conquest

of idealism over practicality and thus

a ready-made recipe for failure in a

non-perfect world Perhaps we should

instead look at the alternative

mean-ing of resolution, the sense of solvmean-ing

problems of which we are already well

aware and through practical means

In the U.S., of course, we have a

good idea of what 2013 will look like

For as the days dwindle down towards

the year end “fiscal cliff” deadline, the

two sides are still at odds over what

constitutes a balanced approach

to-wards the budget deficit To many, it

seems incongruous that this game of

Russian roulette with the U.S

econo-my continues Certainly businessmen

are in disbelief, for such irresponsible

inaction on their behalf would lead to

severe sanctions from stakeholders

With only some 18 months left

in office, it is interesting to speculate

what legacy President Susilo Bambang

Yudhoyono will have, such as a bridge

linking Sumatra and Java, for example

The President is viewed by some as

the “founding father” of Indonesian

democracy He is the first to be

demo-cratically elected in two terms and will

hand over the office to an elected

suc-cessor Perhaps he will be content to

be remembered for his initiatives to

improve the transparency and

account-ability of government Yet others

be-neW year – be-neW approach

or same old story

the president is vieWed by some as the “founding father” of indonesian democracy he is the first to be

democratically elected in tWo terms and Will hand over the office to an elected successor

JamEs s Kallman IS A SENIOR pARTNER OF glOBAl ACCOUNTINg AND CONSUlTINg FIRM, MAZARS A 30-YEAR VETERAN OF EMERgINg MARkETS, JAMES IS AlSO ThE

pARTNER-IN-ChARgE OF MAZARS’ glOBAl EMERgINg MARkETS pRACTICE.

World Heritage Cities conference

in 2008 Of course, the nation’s capital offers greater challenges, especially with its annual flooding

and its infamous macet (traffic

jams) Seeking firsthand knowledge, Jokowi looks unlikely to make hasty decisions, as shown by his request for clarity on the loan repayment to fund the proposed Jakarta MRT Project.Such a businesslike approach to ensure payment will not hang like millstones round the necks of the next generation is certainly new Whether this will lead to an affordable and effective public transport system for Jakarta is another matter After all, it is only the start of another new year f

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LIPPO CIKARANG

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FResh thoUght

tAUFik DARUsmAn

Hatta Rajasa face an even bleaker future than they already do For the record, all six Indonesian presidents are Javanese except for B.J Habibie, which may or may not explain his shortlived presidency (17 months)

INES says non-Javanese should consider being a vice presidential candidate, but only if coupled with a Javanese presidential candidate

In the same month a survey by the Indonesia Youth Alliance for Change (API) showed that the young generation want Jakarta Governor Joko Widodo (aged 52), better known as Jokowi, to be the next president If that may not be possible, then Dahlan Iskan (62) or Mahfud

MD (56), if not Prabowo Subianto (62) or even Jusuf Kalla (71), would

do API did not offer to explain how

60 plus leaders can be expected to bring much change to the country

Then early in December the Institute Survei Indonesia (Indonesia Survey Institute or INSIS) announced

that a polling across all 33 provinces showed a majority (86.5%) wish to see the 2014 election as a chance for a

“regeneration of national leadership.” Respondents selected under-55 political leaders such as Priyo Budi Santoso (Golkar), who is their first choice, followed by Pramono Anung from PDIP, Hidayat Nur Wahid (PKS), Puan Maharani (PDIP), Anas Urbaningrum (PD) and Luthfi Hasan (PAN) to be their next leader

With all pollsters claiming to use standard methodology but arriving at different results, it is small wonder that they have come under heavy criticism The executive director of the Institute of Soekarno Hatta Economics and Politics Hatta Taliwang accused them of bias The latest LSI survey, he said, represents

“certain political interests.”

Prominent historian of the run Indonesian Institute of Sciences (LIPI), Asvi Warman Adam, has also noted that surveys fail to rank credi-ble figures such as antigraft body chief KPK Abraham Samad, Chairman of the Regional Representatives Council Irman Gusman and Muhammadiyah chairman Din Syamsudin

state-Both Hatta and Asvi stopped short from saying commercial interests and political agendas lie behind the pollsters’ surveys What is clear is that the public and media are captivated

by surveys—despite the pollsters’ dwindling reputation To many, it seems, what borders on political shamanism will do in the absence of a better credible reference f

If the 2014 presidential

elec-tion had been held a few

months ago, Indonesia

would have at least four

dif-ferent persons at the helm

of the nation—or so according to

pollsters For in late November the

Indonesia Survey Institute (LSI)

conducted a poll of 223

business-men, retired generals, and what they

describe as “opinion leaders,” on the

2014 presidential candidates

Con-stitutional Court chief Mahfud MD

took the top place, followed by

for-mer Vice President Jusuf Kalla, State

Owned Enterprises Minister Dahlan

Iskan, former Finance Minister Sri

Mulyani and former People’s

Con-sultative Assembly (MPR) Chairman

Hidayat Nur Wahid

Also in November, a survey of

voters by the Indonesia Network

Election Survey (INES) showed the

chief patron of the Great Indonesia

Party (Gerindra) Prabowo Subianto

would be the next president Arguing

that primordialism sways voters’

minds, INES said 59% insisted on a

Javanese for a president That being

the case, 33% wanted Prabowo as the

next president, with former President

Megawati Soekarnoputri (22.2%),

First Lady Ani Yudhoyono (7.1%),

Coordinating Minister for Political,

Legal and Security Affairs Djoko

Suyanto (9.3%) and the First Lady’s

brother, Pramono Edhie Wibowo

(8.8%), trailing behind him

Thus non-Javanese presidential

aspirants such as Aburizal Bakrie,

Surya Paloh, Akbar Tanjung and

In the preSence of

political shamans

taUFiK darUsman IS ONE OF INDONESIA’S MOST ExpERIENCED JOURNAlISTS hE hAS hElD ChIEF EDITOR ROlES AT BUSINESS wEEk INDONESIA AND INVESTOR MAgAZINES,

AND ThE INDONESIAN OBSERVER NEwSpApER.

Trang 21

BRI

Trang 22

L’Oréal has picked Indonesia as home of its largest plant in the world,

which it hopes to help with its regional ambitions as well

l’oréal’s new factory in

Cikarang, West Java.

Trang 23

an important domestic market and also a base to export to the rest of Southeast Asia To that end, L’Oréal in November opened its biggest cosmetic

plant in the world, out of 43 around the globe, in an industrial estate in Jababeka, West Java The cost? The 66,000 sqm plant took two years and

€100 million to build

“Today we see L’Oréal make Indonesia its production base for Asia Pacific,” says Chatib Basri, head of the Indonesia Investment Coordinating Board He was one of a throng of VIPs that attended the opening ceremony of the plant in November that included the Industry Minister Mohamad S Hidayat and L’Oréal’s Executive Vice President Asia Pacific Zone Jochen Zaumseil Also on hand at the opening ceremony were L’Oréal brand ambassadors Dian Sastrowardoyo and Laudya Chintya Bella, along with about 1,000 other guests The gala opening ceremony included speeches by the dignitaries, followed by some entertainment and a tour of the new facility, which claims to be environmentally friendly with low CO2 emissions Besides production, this plant will also

sepa-ly, Indonesia is the fifth biggest try in terms of sales of L’Oréal in Asia Pacific We are expecting Indonesia become the third biggest country in the near future Indonesia’s cosmetics industry is very promising, otherwise

coun-we would not be here L’Oréal is not investing for the short term but for the long term,” says Jochen Zaumseil Indonesia’s promising market

is also reflected on L’Oréal’s global performance From January to September 2012, L’Oréal SA had €7.16 billion in revenues, up 11% from the same period in 2011 Asia Pacific sales contributed €3.19 billion, up 21% and the highest growth in the world on

a regional basis The rapid growth

of the middle class in Indonesia is also a reason for L’Oréal to expand here, with L’Oréal targeting to add

Trang 24

FORBES INDONESIA

COMPANIES & PEOPLE — L’ORéAL

60 million new customers in the

coming years The new plant will

focus on producing skin care and hair

care products under brands L’Oréal

Paris and Garnier About 30% of the

products will be sold to the domestic

market, while the most will go to the

export market

L’Oréal has a long history in

Indonesia Guy Laroche and Cacharel

perfume were the first products that

were introduced in 1979 Seven years

after that, in 1986, L’Oréal cooperated

IndOneSIA’S cOSMetIcS InduStrY IS exPerIencInG FASt GrOwth

with local cosmetics maker PT Mustika Ratu Tbk to set up plant in Ciracas, East Jakarta, under name

PT Yasulor Indonesia

With the opening of the new plant, L’Oréal shut down facilities in Ciracas and moved all the employees to Ja-babeka The new Jababeka plant will accommodate 800 workers, almost two times that of the previous plant

Moving locations was a big challenge for the employees, who were incentiv-ized with a special house ownership program L’Oréal offered to subsidize

the cost of buying their own homes by 50%, if the employee stays with the company for three years At present,

as many as 75% of L’Oréal Indonesia employees don’t have a house As a result of this generous program and other steps, L’Oréal managed to retain 96% of its employees

Although the Indonesian cosmetics market is promising, it is also not with-out challenges Imported products have increased competition “To be competi-tive, we strive to make our products accessible, innovative, affordable, and offer added value and diversity,” says Jochen One way to diversify is to cre-ate special products for the local mar-ket, such as Garnier Light Complete, a special whitening cream

Another point of differentiation is

to use local ingredients as much as possible “Currently, we use local raw materials in as much as 55% [of our products] and we are expecting to increase that to 75%,” says Jochen A higher use of local ingredients will also help L’Oréal to lower prices as well F

Workers packaging l’oréal products.

Source : Industry Ministry and Trade Ministry

promising, otherwise

we would not be here

L’Oreal is not investing for the short term but for the long term.”

Trang 25

in developing, cultivating, and

producing Crude Palm Oil (CPO)

and Palm Kernel from Fresh Fruit

Bunches (FFB) The company

manages eight subsidiaries; four

are located in Central Kalimantan,

two in West Kalimantan and two

in East Kalimantan The company

currently has 3 palm oil processing

facilities with a total capacity

of 135 tones FFB per hour The

company listed its shares on the

Indonesia Stock Exchange (IDX)

on October 27th 2009

BW Plantation has an experienced

management team comprised

of experienced and dynamic

personnel with successful track

records in managing the business

The company employs more than

10.000 employees Management

is actively mentoring the next

generation of leaders to ensure

continued growth and the

maximum utilization of assets

Growing Into The Future

The Company and its subsidiaries

operate land bank of

approximately 105.000 hectares

located in West, Central and

East Kalimantan Out of which,

approximately 64 thousand

hectares is planted, and the

balance comprises land bank for

future expansion The majority of

the mature oil palms are in early

prime age The mature area will increase significantly in the future

as only 43% of the total planted area is matured

Combination of Industry Best Practices Application and Technology for the Future.

BW Plantation believes that the application of industry best practices and plantation techniques such as maintaining vegetation to maintain the soil, mechanization of harvesting and collection and fertiliser application results in higher FFB yield for the company

The combination of up to date machinery, innovative technology,

timely delivery of FFB to the mill and vigilant management also improves the quality of the oil we produce

Corporate Social Responsibility (CSR).

As BW Plantation has grown, the CSR program has been part of the company strategy

to maintain sustainability

BW Plantation has a strong commitment to community development through the CSR program which focuses on education, the environment, and employment opportunities for the local people who live around the plantations

Good Corporate Governance

BW Plantation is committed

to improving company values through the implementation of GCG with the active participation

of all employees

The GCG principles are transparency, independence, integrity, accountability, responsibility and fairness

special advertising section

The Future is

“A Successful Step Forward”

PT BW Plantation Tbk Menara Batavia 22 nd Floor

Jl KH Mas Mansyur Kav.126 Jakarta 10220

Trang 26

ZuRICH

Prestigio offers a complete and competitive

indi-vidual protection product that wholly protects the

clients To compliment the basic benefits of

Pres-tigio, additional benefits can be added to the product:

Prestigio Hospital & Surgical and Prestigio Critical Illness

Early Care

Prestigio:

maximizing your health investment return

Health insurance has starting to become a lifestyle for Indonesian As a leading global insurance company, Zurich Insurance stands out among insurance providers in Indonesia “Zurich Insurance is not only offering the most competitive and comprehensive hospitalization benefits Our individual protection product, Prestigio, gives our clients the maximum return of their health investment,” says Oemin Handajanto, CEO & President Director PT Zurich Topas Life, the Indonesian subsidiary of Zurich Group

Email: customercare.indo@zurich.com Website: www.zurich.co.id

HOTLINE +6221 2935 6188

Prestigio Hospital & Surgical benefits are:

• Comprehensive hospitalization benefits around the world

• Cashless or by reimbursement claims

• Hospitalization benefits of surgery and hospital stays for policy holder up to 80 years old

• 10 MCMB (Major Catastrophe Medical Benefit) for policy holder up to 75 years old Benefit is automati-cally extended every year and without having to go through health check up

• Provide coverages in hospitals and health clinics in Indonesia, Malaysia and Singapore

• DERB (Daily Entitlement Refund Benefit) Zurich surance will refund the money if the patient chooses

In-a hospitIn-al room where the price is lower from the coverage stated on the plan

• Comprehensive surgical coverage, regardless of pitalization or not

hos-• Prothesa & Implants cover

Prestigio Critical Illness Early Care

For clients who are diagnosed with one of the 32 early stage critical illnesses, besides the lump-sum payment to cover the critical illness costs, Zurich insurance also provides additional benefits such as up-front diagnosis benefit, monthly rehabilitation benefit and yearly follow-up care benefit which increases

in line with medical inflation

Interested? Contact us for more info

Trang 27

ZuRICH

Prestigio offers a complete and competitive

indi-vidual protection product that wholly protects the

clients To compliment the basic benefits of

Pres-tigio, additional benefits can be added to the product:

Prestigio Hospital & Surgical and Prestigio Critical Illness

Early Care

Prestigio:

maximizing your health investment return

Health insurance has starting to become a lifestyle for Indonesian As a leading global insurance company, Zurich

Insurance stands out among insurance providers in Indonesia “Zurich Insurance is not only offering the most

competitive and comprehensive hospitalization benefits Our individual protection product, Prestigio, gives our

clients the maximum return of their health investment,” says Oemin Handajanto, CEO & President Director PT

Zurich Topas Life, the Indonesian subsidiary of Zurich Group

Email: customercare.indo@zurich.com Website: www.zurich.co.id

HOTLINE +6221 2935 6188

Prestigio Hospital & Surgical benefits are:

• Comprehensive hospitalization benefits around the world

• Cashless or by reimbursement claims

• Hospitalization benefits of surgery and hospital stays for policy holder up to 80 years old

• 10 MCMB (Major Catastrophe Medical Benefit) for policy holder up to 75 years old Benefit is automati-

cally extended every year and without having to go through health check up

• Provide coverages in hospitals and health clinics in Indonesia, Malaysia and Singapore

• DERB (Daily Entitlement Refund Benefit) Zurich surance will refund the money if the patient chooses

In-a hospitIn-al room where the price is lower from the coverage stated on the plan

• Comprehensive surgical coverage, regardless of pitalization or not

hos-• Prothesa & Implants cover

Prestigio Critical Illness Early Care

For clients who are diagnosed with one of the 32 early stage critical illnesses, besides

the lump-sum payment to cover the critical illness costs, Zurich insurance also provides

additional benefits such as up-front diagnosis benefit, monthly rehabilitation benefit and

yearly follow-up care benefit which increases

in line with medical inflation

Interested? Contact us for more info

Trang 28

FORBES INDONESIA

COMPANIES & PEOPLE — INtRACO PENtA

Halex is sure that the company revenues will equal those

of last year, Rp 3 trillion Heavy equipment sales is still the main contributor to revenues, 60%, with the remainder made up from spare part sales, service and other items

Intraco has six brands of heavy equipment including Bobcat, Ingersoll-Rand, Mahindra, SDLG, Sinotruk and Volvo To strengthen its position in the heavy equipment market, last March Intraco signed a deal with China National Heavy Truck Co, the maker of the Sinotruk brand.After 42 years in business, Intraco Penta now has be-come a significant player in heavy equipment, in a market dominated by a few heavyweights, notably Astra Interna-tional’s united Tractors and the privately held Trakindo One of Intraco’s flagship products is the Volvo articulated hauler, which has a 60% market share (an articulated haul-

er is a special type of dump truck) This year, Intraco is

ranked 20 in Forbes Indonesia’s Best of the Best list of

com-panies, up from 25 in 2011 For the nine months of 2012, the Volvo heavy equipment distributor posted revenues of

Rp 2.1 trillion, stable from the same period last year

Halex comes from a humble background His parents worked as bicycle sellers and repair workers, so Halex had a limited budget for his education He attended

petrus Halim with one of intraco’s flagship products, the

Volvo articulated hauler, which has a 60% market share

Intraco thrives on providing heavy

equipment targeting specific markets.

for PT Intraco Penta Tbk area in Cakung, East Jakarta in

a golf cart driven by Halex Halim, founder and president

commissioner of the company, now 71 He waves at the

yard filled with about 300 pieces of heavy equipment

including Volvo excavators, Volvo haulers, Sinotruk

trucks and Mahindra tractors “usually, the stock is not

this much,” says Halex “The decline of commodity price

means our clients have reduced their activities, therefore

our sales have slowed down.”

Although coal prices have weakened (and coal

Trang 29

school until junior high school and moved to Jakarta at 20

Together with his relatives and friends, he founded Intraco

as a heavy equipment parts supplier in 1970 Later, the company name was changed into PT Intraco Penta Penta means five founders including Halex, his siblings Lim Siu Jin, Sayuti Halim, and two colleagues Wahab Firmansyah and Simin Kusumo

At that time, the government was aggressively opening forest and mining concessions, and all those concession holders needed heavy equipment With eight employees, Intraco opened its first office in Pangeran Jayakarta, Central Jakarta in 1970 One of Halex’s biggest breaks came when Sweden’s Volvo group appointed Intraco as its distributor in Indonesia for its heavy equipment (its car and truck brands are under another distributor) Halex admits that at the time he knew little about Volvo, but Volvo gave him training so he could market the brand in the country In 1993 Intraco listed its shares on the stock market Shortly after that, Petrus Halim, Halex’s second son, started to manage the company as its head of finance

“I was familiar with the company Back in elementary school, I was driving a Bobcat,” says Petrus, who is now 42 and president director of the company

To Halex, the growth of the business parallels the process of raising his children “My success lies with

my wife, when I was building the company, she took the children to school in Singapore and the u.S even though she did not speak English,” says Halex Petrus’ leadership

as chief financial officer was tested when the financial crisis hit Indonesia in 1997 While the rupiah weakened,

he chose to hedge by buying the u.S dollar at Rp 2,635

He then converted back into rupiah when the exchange rate hit Rp 12,000 to the u.S dollar So just when many other companies were struggling, Intraco could pay off its debt and had funds to expand and upgrade its operations

Petrus made another good call when he nixed the idea to move the company into coal mining, and soon after coal prices started to decline

Despite the weak prices for commodities, Petrus still believes that the demand for heavy equipment will increase next year To support heavy equipment sales, Intraco is boosting its financing subsidiary PT Intan Barutama Finance (IBF) To reduce its dependence on financing to the coal sector, some 60% of revenues, Petrus will expand IBF into financing in other sectors, such as forestry, plantations and construction Besides developing Intraco, some four years ago Petrus also started a private agribusiness Petrus believes agribusiness has good long-term prospects as the population grows, it will need more food Currently, the Halim family has a shrimp farm in Sukabumi and corn plantations in Sumba

In addition, last October the Halim family also launched a power plant with a capacity of 130 megawatts

in Batam This $200 million power plant is coal-fired, as Petrus believes coal is a more affordable fuel source than gas, which is used in most of the other power plants on Batam These two businesses, agribusiness and power plants, should generates $50 million in revenues this year, says Petrus F

heavy equipment Spare Parts Service rental Mining contractor Leasing

Manufacture Others

BUSINESS CYCLE

heavy equipment sales still make up 69% of the company’s revenues

Source: Intraco Penta annual report 2011

Trang 30

MARkEtINg INSIghtS

hERMAwAN kARtAjAyA

business by managing the tion for a junior high school’s study tour He himself could not participate but he made some money from it To-day his CT Corp group encompasses media, theme parks, retail and many other investments

transporta-His perseverance led to success in academic, organizational and business realms He managed to become a den-tist while actively participating in stu-dent organizations and doing business

Today, he is thefifth richest person

in Indonesia, with an estimated net worth of $3.4 billion

I only recently learnt about the book when I attended a discussion between the National Economic Committee (KEN) and the editors-in-chief of vari-

ous media The event was held a day fore the official release of the Indonesia Economic Outlook 2013 by KEN Listening to CT, who led the dis-cussion, I could see his true character

be-as depicted in the book Despite many critical questions and comments from the editors-in-chief, CT’s responses were calm and polite I personally see four key dimensions of CT during the discussion First, CT has a typi-cal leader’s physical stature He has

a good physique and a charismatic voice Secondly, as a person who never formally studied economics, CT has an intellectual proficiency on economic matters He could easily handle issues such as labor and farmers, social dis-crepancy, poverty, bureaucracy, and even monetary policy

Thirdly, CT is emotionally mature

He was not offended by critics during the discussion and always gave op-portunities to other KEN members to respond as well Finally, he is a person

of integrity He led the discussion with transparency He was not afraid to re-veal the truth and admit his limitations.Fundamentally, CT has a strong personality with four leadership fundamentals: physical, intellectual, emotional and spiritual Therefore, he has excellent vision “Before McKin-sey released its projections, I had established Yayasan Indonesia Forum which concluded that Indonesia will

be a high-income nation by 2030 But nobody believed me back then,” CT told me That night, I also asked him if

he would become a presidential candidate in 2014, as has been speculated “To me, being an entrepre-neur is a noble thing,” he replied F

book in sia today? One of the most popu-lar answers is

Indone-“Chairul Tanjung, Si Anak Singkong”

by Tjahja Gunawan Diredja, published

by Kompas The book is sold

every-where, from bookstores and train

sta-tions to supermarkets and airports In

fact, some people made illegal copies

as demand exceeded supply Chairul

Tanjung asked the publisher, Kompas,

to allow illegal copying of his book so

that it can reach more people and

in-spire them to become entrepreneurs

The book is indeed about the

entrepreneurship skills of tycoon

Chairul Tanjung, better known as

CT He grew up in Kemayoran, then

a suburb of Central Jakarta He built

his character with the guidance of his

grandmother, who taught religion at

the primary school SD Negeri Jalan

Tepekong His parents believed in the

primacy of education and went out of

their way to put CT into private school

even though it was more costly

His father was an idealist and had

gone bankrupt as his political

prin-ciples were against that of the

govern-ment’s The young CT started to do

“ANAk SiNgkoNg”

a PreSidentiaL Candidate?

HermaWan KartaJaya IS thE FOUNDER AND pRESIDENt OF MARkplUS INc., ONE OF SOUthEASt ASIA’S lEADINg MARkEtINg AND pROFESSIONAl SERvIcES FIRM

IN 2003, hE wAS RANkED AMONg thE “50 gURUS whO hAvE ShApED thE FUtURE OF MARkEtINg” BY thE chARtERED INStItUtE OF MARkEtINg IN thE U.k.

ChairuL tanjung aSked the PuBLiSher, kOmPaS,

tO aLLOw iLLegaL COPying

OF hiS BOOk SO that it Can reaCh mOre PeOPLe and inSPire them tO BeCOme entrePreneurS

Trang 31

JAKARTA POST

Trang 32

OF THE YEAR

FORBES INDONESIA

Kalbe Farma is known as the country’s largest pharmaceutical

company, under the long-time leadership of its founder, Dr

Boenjamin Setiawan, known affectionately as Dr Boen Now in its 47th year of operation, Kalbe has moved well beyond its core franchise into a host of other businesses related to a focus on healthcare and wellness That diversification includes hospitals, distribution, nutritional and consumer products

Two signs of this transformation were evident in the middle of 2012 First

in May, when Kalbe acquired Hale International, a local drink maker, for Rp 94 billion, best known for its iconic “Love Juice” line of juice drinks The following month, in June, Kalbe set up a joint venture company with Milko Beverage

Industry called Kalbe Milko Indonesia with a Rp 150 billion investment to

produce milk-based healthy foods and beverages

The growth of the company’s drinks business is having an effect on sales, which in 2012 was Rp 13 trillion, with about 16% of that coming from health

or energy drinks such as Extra Joss, Fatigon Hydro and Sakatonik It’s a good place to be right now, with fruit juice and dairy products rising 18% a year in consumption, much faster than the overall rise of 15% for the total beverage industry, according to figures from the Soft Drink Industry Association (Asrim)

“We are diversifying our business just to survive If we are only

concentrating in one thing, I think it is not good to put all the eggs in only one basket And, I think, food products will go up very fast,” says Dr Boen, sitting in

Medicine

Man

At 80, Dr Boen has built Kalbe Farma into

the country’s largest pharmaceutical company, and still sees plenty of growth ahead

By Ulisari Eslita

photographs By ahmad zamroni / forBEs indonEsia

Trang 33

Trang 34

his office in the Cempaka Putih section of Jakarta, close to

his original factory in Pulo Mas Kalbe’s expansion spree

will not stop with Hale and Milko Kalbe is in a strong

financial position: it has a market capitalization of

Rp 39 trillion, over Rp 1 trillion in cash on its books and

only around Rp 115 billion of debt Thus, over the next few

years, Dr Boen says that Kalbe is well-positioned to keep

acquiring companies related to its areas of expansion

“We are thirsty to acquire more companies and we are

looking for more,” says Dr Boen, now 80

In short, Kalbe Farma continues to find new areas of

growth while maintaining its strength in its core business

Its business prospects for the future appear to be equally

strong, backed by a solid balance sheet, savvy acquisitions

and expansion moves that are synergistic with existing

businesses Dr Boen’s Kalbe Farma has both a strong

track record and a promising future He has also set

up the company for a smooth transition and has built a

group of professional managers to handle the business he created in a garage many years ago (he gave up his board position in 2007, his business card now reads “founder and honorary chairman”)

With an estimated fortune of $2.35 billion shared by himself and close relatives, Dr Boen has been rewarded for his efforts, and those who bought the stock have also done well Kalbe Farma stock is up 288% for the last three years to mid-December 2012, some 50% of that in the past

12 months Kalbe Farma is now the largest publicly listed pharmaceuticals company in Southeast Asia by sales As

a major business figure, his reputation is for the highest integrity and deep concern for improving the healthcare

of his country The above are some of the reasons why Dr

Boen has been selected as Forbes Indonesia’s businessman

of the year

Dr Boen shows no signs of slowing down Kalbe Farma, with 17,000 staff, will allocate Rp 1.4 trillion for

Trang 35

FORBES INDONESIABUSINESSMAN OF THE YEAR — BOENjAMIN SETIAwAN

capital expenditure, an increase of 75% over 2012’s Rp

800 billion The funds will be used primarily to double the output in Kalbe’s business lines: distribution and logistics, pharmaceuticals, nutritional and consumer health products Distribution, surprisingly, remains the largest source of revenues for the company, with 37% of total sales It is the biggest moneymaker for the firm as it distributes pharmaceuticals not only made by Kalbe but other brands as well, so grows with the use

of pharmaceuticals on a national basis As the country develops, more people can afford to buy better healthcare, including more pharmaceuticals

A bright spot in distribution is that of medical equipment as well From sales of Rp 500 billion in 2008, the growth has been at 30% compounded year on year Sales this year should top the Rp 1 trillion mark Kalbe distributes equipment for some leading brands such as Boston Scientific

Meanwhile, the business for which Kalbe is best known, pharmaceuticals (ethical and over the counter medicines) contributed just 26% of the total sales—mean-ing today Kalbe, on a revenue basis, has only about one quarter of its sales arising from its original business Kalbe now has a 17.4% market share in generic drugs, almost even with Indofarma, the state-owned pharmaceutical company, which has 17.6% share

Apart from distribution, pharmaceutical and sumer health, about 21% of revenues now come from the nutrition division This division is focused on making baby formula milk products, and milk for older children and even teenagers, such as Prenagen, Morinaga, Entrasol and Diabetasol This division’s products are mostly targeted at the premium segment

con-Source: Danareksa Securities

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12

Prescription Nutrition Consumer Health Distribution & Packaging

(Quarterly basis from 2010)

Kalbe is growing across all its sectors

Source: Danareksa Securities

“We are thirsty to acquire More coMpanies and We are looking for More.”

Trang 36

In the first nine months of 2012, Kalbe launched 12

new prescription pharmaceutical products, apart from the

products it is acquiring, says Danareska Securities analyst

Mardesiana “Among Kalbe’s business units, revenues

in distribution grew very fast with 54% of growth

Meanwhile, pharmaceuticals grew by over 15% year on

year,” wrote Mardesiana in her research Adding to that,

the consumer health division recorded revenue growth

of nearly 10% year on year, while the nutritional division

posted 16% year on year revenue growth

This year, Dr Boen has targeted Kalbe for total sales of

Rp 16 trillion, a 23% increase from last year Meanwhile, in

net profit, the company plans to boost it by 15% this year

from Rp 1.7 trillion last year To boost both sales and net

profit, Kalbe set up some new facilities and has enlarged

its existing facilities In early 2012, Kalbe started a Rp

150 billion plant in Cikarang The facility is dedicated to

raising the firm’s generic drug tablet production capacity

by up to 50% “I’m suffering from hypertension I take

generic drugs from Kalbe everyday,” says Dr Boen, who

recovered from a heart attack at age 43 and now follows a

regular exercise routine to stay fit

has already set that in place His niece Bernadette Ruth

Irawati Setiady became president director in 2008,

replac-ing Johannes Setijono, who had been in that post for ten

years and now is the president commissioner Hence the

management bench at the firm is solid and deep

Berna-dette, a rare example of a woman in a top post, has worked

at Kalbe since 1987, so she brought over two decades of

FORBES INDONESIA

BUSINESSMAN OF THE YEAR — BOENjAMIN SETIAwAN

top tEn EthiCal prodUCErs (itma)

top tEn gEnEriC prodUCErs (itma)

Source: Danareksa Securities, 2012

KalBE groUp

Bayer Indonesia

Novartis Kimia

Farma Interbat

Sanofi Aventis Pfizer

Indofarma

Combiphar

Novell Pharm Phapros

Bernofarm Widatra Bhakti

Generic Manuf

Dexa Medica

BIggEST SLIcE oF THE PILL

/ Kalbe is the biggest ethical producer, and neck and neck with Indofarma in generics

experience to top job when appointed Dr Boen says it was not automatic that a relative would get the post, the deci-sion was made by the board on the basis of merit To align personal interests with business interests, Bernadette’s family is one of the major shareholders of Kalbe as well

Looking ahead, Kalbe has started an oncology facility

in Jakarta with Rp 200 billion of investment, which will open to the public this year This facility will produce high value added drugs with much higher margins that will strengthen Kalbe’s prescriptive pharmaceutical line in the future As a part of business diversification, in 2006, Kalbe set up the Stem Cell and Cancer Institute (SCI) in Jakarta It is stem cells that get Dr Boen most excited as a

it was a memorable year for

Kalbe in 2007 After ing the largest pharmaceutical company in 1977, 30 years later, Kalbe entered the ASEAN market for the first time “Our motto is ‘think global, go regional, and act local’,” says Dr Boen Next, Kalbe will do more marketing

becom-Going Global

of its products to ASEAN countries, such as Malaysia,

Singapore and the Philippines It is also planning to set

up a local pharmaceutical company in Vietnam, and to

spread to India and Taiwan Rather than fear the

fast-approaching single ASEAN market of 2015, Dr Boen is

looking forward to it as he sees it as a major opportunity

to help Kalbe to expand

Trang 37

Trang 38

FORBES INDONESIA

BUSINESSMAN OF THE YEAR — BOENjAMIN SETIAwAN

Garage Starter Kalbe has a long history It was founded

by six siblings: Khow lip Tjoen, Theresia Harsini Setiady, Khouw lip Swan, Boenjamin Setiawan, Maria Karmila, and Fransiscus Bing Aryanto Kalbe started in a modest garage in Tanjung Priok, North Jakarta (a photograph of the garage is hung in the waiting room for those visiting his offices)

“I read a lot about companies that started

in a garage, and usually they are successful like Google, Hewlett Packard, Apple, all started in garage,” says Dr Boen Today that garage no longer exists Soon, the site will be turned into a hospital for Kalbe’s CSR activities—a fitting locale for such an endeavor “We demolished the garage a long time ago Hopefully by February 2013, the hospital will be completed,” he says Although strong today, Kalbe almost didn’t survive the financial crisis of 1998 At that time, Dr Boen had followed the path taken

by many others, taking out foreign currency debt (to get lower interest rates) and then almost going bankrupt when unable to repay with devaluated rupiah The blessing

in disguise is that Dr Boen decided to sell off all his businesses except the original pharmaceutical one to pay off the debt

As with many others, he had expanded far beyond this core business into areas such as financial services, property and logistics

“indonesia is still

long Way to go, and

the business could be

doubled here, i think,”

says dr boen

health practitioner “I’m convinced

that stem cells are the future of

medicine,” says Dr Boen—he can cite

numerous areas where he believes

stem cells could advance the quality

of healthcare

SCI could evolve to become the

basis for future therapy development

to replace conventional drugs and

therapy In 2010, SCI conducted

clinical trials for a treatment for

cardiovascular illnesses In cancer

research, SCI is more focused on

lung and breast cancer Currently,

SCI still has clinical trials for the

next year or two “After that, we can

use it commercially and make some

money,” says Dr Boen

In relation with that, Kalbe also

has a research division for

biotech-nology under its subsidiary,

Inno-gene Kalbiotech in Singapore So far,

Innogene has produce TherCIM, a

monoclonal antibody for targeted

cancer therapy which is already

mar-keted in Southeast Asia Next,

Inno-gene is planning to develop

biosimi-lar products, which are derived or

made from living organisms

Every year, Kalbe allocates

Rp 100 billion or 1% of the total

sales for research and development Besides for SCI and

biotechnology research, most of the budget is used for

ethical and over the counter (OTC) products “We have

been developing very fast, because we are putting a lot of

emphasis on research and development I think this is our

key to success,” says Dr Boen Yet Kalbe does have some

limitations “Our research and development is more on the

formulation area, not making new chemical products, as

it can cost at least $1 billion in the U.S [to develop a new

drug],” says Johannes Setijono, president commissioner of

Kalbe Farma

Apart from Kalbe, Dr Boen’s brother, Fransiscus Bing Aryanto, set up a hospital chain called Mitra Keluarga hospital He started his first hospital back in 1993 in Bekasi, West Java Today, the hospital is a chain of 10 hospitals, which are spreading from Jakarta to Central and East Java

“We are planning to add two more hospitals every year,” says Dr Boen He will also open a hair clinic in Jakarta in January 2013 It is a collaboration with a Dutch doctor, Coen Gho The clinic focuses on hair transplants, using a technique used in the West

For Dr Boen, the pharmaceutical and hospital business are promising areas for the next five to 10 years ahead Coming soon will be the creation of universal healthcare coverage mandated in 2014 and managed by the Social Security Management Agency (BPJS), that was required under a new law passed last year Right now, government spending on healthcare is just 2.5% of GDP now, and can easily rise closer to the global norm of 5% “We are the lowest in the region China is 4% That’s why Indonesia is still long way to go, and the business could be doubled here, I think,” he says with a smile F

Trang 39

OF THE YEAR

FORBES ASIA

It was 2005, and Morris Chang, at age 74, had

earned his retirement: the global economy had bounced back from a postmillennial downturn, and his Taiwan Semiconductor Manufacturing, or TSMC, was back leading a wave of change in the electronics industry

Before the 1980s suppliers of chips for everything from computers to radios mostly spent big sums to design chips themselves and churn them out in their own factories Chang in the middle of the decade came up with a niche: specialized factory services (also called a “foundry”) for companies willing to outsource design to an unknown Taiwan company The option erased an enormous financial barrier to entry for engineer entrepreneurs, led to a wave of innovations and lower costs for consumers, and created fortunes for young outfits such as Qualcomm and Broadcom Older industry giants like Philips and AMD turned to TSMC, too

By 2001 the international edition of Forbes had splashed

Chang, a mainland-born Chinese graduate of MIT and Stanford who spoke English with a southern drawl after two decades encamped at Texas Instruments, on its cover

Morris Chang, 81, has lit another fire under TSMC, as it builds on his chipmaking breakthrough Eyes now for Apple?

By rUssEll flannEry

Ageless and Peerless

In an Era of

Fabless

Trang 40

FORBES INDONESIA

BUSINESSMAN OF THE YEAR — MORRIS CHANG

0 5 10 15 20 25 30 35%

FOUNDRY-BASED REVENUES

AS % OF CHIP MARKET

A BiggeR ByTe

FROm zeRO in The 1980s, “FABLess”

semicOnducTOR mAnuFAcTuRing ing A FOundRy) TOOk OFF And hAs cOnTinued TO Rise in The pAsT decAde,

(us-TO BeTTeR ThAn A ThiRd OF The

$308 BiLLiOn indusTRy This yeAR.

as “The Catalyst,” noting TSMC’s key

role in accelerating industry

inno-vation Riding high four years later,

Chang turned over CEO duties of the

company he helped to spin off from a

government research lab to Rick Tsai

It didn’t work out “I had always

thought that the company was capable

of more,” Chang says of Tsai’s tenure

“It didn’t happen There was

stagna-tion.” The company was making big

cuts in the price charged for its chips

By 2009 another global financial crisis

hit, and TSMC barely made money

in the first quarter of that year

Laid-off staff turned up in front of Chang’s

house to complain

Chang, who had stayed on as

chair-man, though he personally held less

than 1% of TSMC’s shares, worried about future

technol-ogy, too “There was very, very little investment,” though

industry demand was poised to recover, he felt So Tsai was

out, and Chang, at 78, shocked investors by returning to the

rigors of a CEO TSMC’s stock initially fell

So began yet another remarkable chapter in the storied

career of a man already known for turning the boom-bust

nature of the electronics sector to his advantage Since his

return Chang has led TSMC to its best performance ever

Its New York-traded shares hit a ten-year high this year;

profit for 2012 is en route to a record In the third quarter

the net jumped 62%, to $1.7 billion For his latest act, on

the back of his transformative accomplishments, Chang is

TSMC, renowned in its homeland and industry but

barely known to most others, has climbed so far past

erstwhile rivals that its market cap is today second only

to U.S industry leader Intel among specialized chip

manufacturers And even with Intel, the gap is closing (see

Intel executive Mark Bohr reportedly criticized Chang’s

contract model on the grounds it was “collapsing” because

of rising technological complexity

Chang disagrees Increasing investments needed to

equip a plant will lead to more—not less—outsourcing of

chip production, he insists Today about a third of

indus-try sales is outsourced, a ratio that will continue to rise,

he predicts

Investors of late have backed his bet TSMC’s business

is on a roll, with help from what Chang calls the industry’s

“third game-changer”: chips used in smartphones and

tab-let computers The groundswell for these newer chips

fol-lows the PC boom in the 1980s and then the rise of the

mo-bile phone TSMC, unlike Intel, has benefited from close

ties to a number of winners from the wireless boom, including Qualcomm and Broadcom

Without ties to TSMC, the largest manufacturing source for its chips, Qualcomm President Steven Mollenkopf says, “We wouldn’t have been here.” A supplier of chips for the iPhone, Qualcomm perfectly embodies the rising clout of design houses and Chang’s foundry model: Its market cap exceeded mighty Intel’s for the first time this year

Next up on TSMC’s customer list could be Apple, which currently outsources its key iPhone chips from Samsung but is likely to switch at least some production to TSMC by 2014 as its competition and legal battles with the South Korean partner turn more heated, according to several analysts “TSMC has won,” beating its earlier rivals and establishing its contract model as an industry force, says Bill Wiseman, a partner at McKinsey in Taipei who leads its semiconductor practice in Asia “They would be crazy not to invest” to press the advantage

The industry looked very different to a younger Morris Chang, who’d followed an uncle to the U.S after

a tumultuous youth in China In the 1950s and 1960s, semiconductors was a nascent but integrated business

Makers like Fairchild and IBM designed chips in-house and produced them in their own factories

Chang got a foothold at another early leader, Texas Instruments, and says by the mid-1980s he had identified foundry services as a future industry need At around the same time, new design tools were opening the door to upstarts, if only production were possible

Taiwan’s government also had its eye on that chip market Chang, who was and remains a U.S citizen, in 1985 came to chair the Industrial Technology Research Institute (ITRI) and shortly after took over as chairman of the new commercial spinoff, TSMC “I thought Taiwan at that time posed a challenge that was new to me,” Chang says

He had an uphill slog TSMC’s technology in fact was lagging, and it wasn’t able to get much U.S business, recalls F.C Tseng, now TSMC vice chairman, who at the time headed research at ITRI Tseng recalls Chang returning

to Taiwan from a trip to the U.S where he’d seen a new manufacturing process and asking, “How come you guys don’t know about that?” Tseng replied: “Morris, that’s not fair Our learning cycle here is slower.”

Chang, in his persistent way, has gone about changing that Today Taiwan is a leader in various electronics

Tiêu đề	Indonesia: Dr. Boenjamin Setiawan's Leadership and Growth of Kalbe Farma
Tác giả	Ulisari Eslita
Trường học	University of Indonesia
Chuyên ngành	Business/Pharmaceuticals
Thể loại	Article
Năm xuất bản	2013
Thành phố	Jakarta

Định dạng
Số trang	84
Dung lượng	12,25 MB