Man of the Year
Entrepreneur, visionary and presidential advisor, Chairul Tanjung is arguably Indonesia’s fastest rising tycoon. Through his business moves and his vision, he is helping to shape the new Indonesia. GlobeAsia takes a look at what makes Chairul Tanjung Man of the Year.
Chairul Tanjung is no ordinary businessman. To say that he has pulling power would be an understatement. Since the 49-year old entrepreneur hit the big time, he has continued to surprise with this bold business moves.
The latest of these was the acquisition of internet news portal Detik.com for $60 million, which he is now transforming into a major digital news outfit. His business empire has grown by leaps and bounds over the past decade but it is his growing presence on the national political stage that makes him stand out.
He is not affiliated to any political party but politicians court him furiously. He is not afraid to speak his mind, which at times infuriates those in high positions. His open ambitions create both fear and envy amongst his business rivals who know that there is no stopping him once he sets his mind to a plan.
But more than that he is not afraid to dream big and turn those dreams into reality. That is where his true power and influence lie and it is for that reason that he is GlobeAsia’s Man of the Year.
For Chairul Tanjung is not merely searching for profits. He is transforming Indonesia, especially the fast rising middle class with his vision and business acumen. He is giving voice to the aspirations of millions of Indonesians who want to see their nation respected on the global stage and contributing to social change.
Extremely smart, he is on the fast track to being a dominant force in the country. In Indonesia, if you want to be a major player, you must understand social issues and address them and this is where Chairul excels. Not only can he engage the government on macro-issues, he has the ability to focus on micro-issues as well.
It is no surprise that people want to get close to him and hear what he has to say. At a party last December inaugurating the transformation of his Para Group into a modern, fast-growing business empire under the new entity CT Corp, many guests agreed it was this special quality that set him apart.
I want to be an agent of change,” the man affectionately known by his initials told a high-profile luncheon of leading business minds, politicians, media executives and officials.
“The establishment of CT Corp, officially called PT CT Corpora, marked Para Group’s transformation after my 30 years of doing business. Para Group was established when I was still a mid-level businessman. At that time of course, the group’s vision and mission reflected that.
“Now, the group’s business size is expanding in line with the country’s growing economic development. That’s why CT Corp has the motto ‘For a better Indonesia.’
“Our new brand identity is an expression of transforming ambition into excellence. Indonesia’s transformation is awakening the hopes, dreams and ambitions of the people,” Chairul said, adding he believed Indonesia was in a golden era of economic growth. “We are committed to helping the country and its citizens realize their ambitions.”
CT Corp’s diverse media, entertainment, retail, mining, agriculture and banking brands have become household names in the archipelago and beyond.
Financial services are provided by Bank Mega, Bank Mega Syariah, Mega Insurance, Mega Life, Mega Finance and Mega Capital, and it was after success in this sector that Chairul turned his attention to media.
His first television station Trans TV began broadcasting in 2000, while cooperation with leading newspaper publisher Kompas Gramedia led him to pick up second channel TV7 in 2006 and turn it into Trans 7. Online news portal detik.com caters to a new breed of information-hungry Indonesians.
The new portal, launched on December 15, features a new video streaming facility integrated with the television stations as well as a new digital newspaper published twice a day at 6 am and 4 pm. The new portal, which also sports a new color scheme, also features a 43-page digital magazine.
In the retail business, CT Corp’s Carrefour chain of hypermarkets is a popular choice for groceries and gadgets and Trans Lifestyle controls high-end clothing franchises such as Hugo Boss, Tod’s, Giorgio Armani and Mango.
Trans Studio owns indoor theme parks in Makassar and Bandung, the latter the biggest of its kind in the world. When it comes to food and beverage, Chairul holds the rights to premium ice-cream franchise Baskin Robbins, while Antatour and Vayatour are leaders in Indonesian tour and travel.
The tycoon’s agricultural assets include a 60,000-hectare palm oil plantation in East Kalimantan, of which 10,000 hectares have been planted.
Chairul said the new CT Corp will maintain three main sub-holdings: Mega Corp to look after financial services, Trans Corp to manage media, lifestyle, entertainment and retail, and CT Global Resources to run his plantations.
As part of the changing face of Chairul’s empire, Mega Corp will sport a new logo in the middle of this year, while Trans Corp’s new logo was launched at the December 15 event, which marked with the anniversaries of Trans TV and Trans 7.
But the 49-year-old isn’t content with all that. He has revealed he is eyeing possibilities for expansion, in line with Indonesia’s economic boom. Chairul says CT Corp is aiming for 30% to 40% annual growth of its own. “Our business growth must be on top of gross domestic product, and if we are somewhere near $10 billion, we will surely attract foreign investors,” he said.
Given the company rebranding, Chairul expects Trans Corp’s earnings before interest, tax, depreciation and amortization will reach $1 billion by 2015, double the growth achieved in 2011. He also says that revenue from both of his television stations in 2011 has reached around $300 million.
Chairul has let slip that he plans to acquire other organizations, but he definitely won’t disclose the details of his next big bets.
He also sees no need at the moment to list his companies on the Indonesia Stock Exchange. “We want to increase the size of our companies, ensure they are world class, before we do IPOs,” he said. “If the companies are large then people will be interested and then maybe some of the business units can go public.
Right now, we have enough internal funds to expand our businesses and we don’t need to look for money in the stock market. If we float all of our subsidiaries on the stock market, it is because we want to give the public a chance to hold ownership of the companies.
“Maybe in about 10 or 20 years CT Corp can go public, but it must be listed on the Fortune 500 before an IPO can be done.”
To date, Bank Mega is Chairul’s only listed company. Asked about his plans to invest in regional banks, the Jakarta native said he is finalizing a deal that will see CT Corp own a 30% stake in PT Bank Pembangunan Daerah Sulawesi Utara (Bank Sulut) worth Rp134 billion.
We are open to investing in other regional banks as well, but my philosophy is not to make acquisitions for the sake of it, but instead help regional banks expand and flourish,” he said.
Bank Sulut invited Chairul to be a strategic partner and help inject capital and improve management. “So it is not only capital but synergy,” he said. “When Bank Sulut is strong and capable, we will allow the regional bank to acquire our shares at market price. The idealism behind this venture is about developing eastern Indonesia, including the province of North Sulawesi.”
Head of Bank Sulut Jeffry Wurangian said that a shareholders’ meeting approved Chairul’s actions and noted his role will remain as a secondary shareholder. “CT is very professional as a businessman,” Jeffry said. “He reiterated that he wants to help. The deal is a breakthrough in terms of regulations.”
Chief Economic Minister Hatta Rajasa confirms that Chairul has committed to investing $1 billion in eastern Indonesia. And, according to Globe Asia sources, he is planning to expand Trans Studio to 20 theme parks over the next 10 years and will invest Rp8 trillion in a new project called Trans City. The 100-hectare development will house 50 television production studios and is expected to be completed by 2014.
But we are still concentrating on the Trans Studio Bandung, which will also have a hotel in operation by March 2012,” says the tycoon of the operation which has been so popular that traffic jams have become a problem in the West Java capital.
Building iconic status
Economic and business analyst Roy Sembel believes the rebranding of Para Group is aimed at building a new business icon with its leader’s personal strength as an internationally successful businessman at its core.
CT Corp, which embodies the same values Chairul Tanjung holds dear, will guarantee the successful emergence of new businesses and partnerships,” Roy said. “Doing business in Indonesia is costly, so his high profile and media companies will naturally help with lobbying and save CT Corp a considerable amount of money. Like Dr. Ir. Ciputra from Ciputra Development, CT’s strategy is right. He is a rising star.”
Many people have linked Chairul’s success to the involvement of the Salim Group, a conglomerate established by former President Suharto’s close confidante Sudono Salim. Chairul admits to learning a lot from Salim’s son Anthony but stresses that CT Corp and its predecessor Para Group are 100% his own.
The path he has walked to success has not been an obvious one. Chairul graduated from the University of Indonesia’s dentistry faculty more than two decades ago, a far cry from what he spends his time doing now. Still, his unusual start has not stopped him becoming Indonesia’s 24th richest man, with an estimated net worth of $900 million based on the 2011 Globe Asia rich list.
Chairul has made an effort to give back to his country too. President Susilo Bambang Yudhoyono appointed him to serve as head of the National Economic Committee (KEN), which is comprised of top economists and powerful business people. However, Chairul’s closeness to national leaders has prompted questions about whether he might one day consider running for the presidency.
The answer is a big no because I have no intention at all of becoming president,” he responds. “My main agenda is to expand CT Corp. We certainly want to become the market leader in every industry we enter. If everybody wants to be a politician, who will be running the businesses?
And besides, he adds, “I like being a businessman.” GA
KEN’s recommendations for 2012
1. Don’t panic. Even with the threat of world economic crisis, the regional economy will still grow. The Indonesian business community should not reduce business activities and investment but adjust to the market prospects.
2. Export orientation should focus on Asia. In 2012, China, India and South Korea represent the most potential countries and must not be neglected.
3. Improve the export mix. Indonesian export products don’t change from year to year and work is needed to create new products and innovations. Business operators must be more creative in looking at export markets.
4. Focus on the domestic market. Even exporters can now look to domestic markets as buying power increases. The domestic market should be maximized as global export demand declines.
5. Business operators should anticipate increased competition as foreign products are dumped on our market. Be aware of this and coordinate with the government to face the threat.
6. Stay out of debt. In facing global economic competition, expenditure should not exceed revenue.
7. Although the global economic crisis poses pressures on business in Indonesia, operators should always be creative in seeking opportunities created by that crisis.