The popular patriarch
Albertus Weldison Nonto | June 04, 2011

HM Aksa Mahmud has developed an expansive business empire, but now in his later years prefers philanthropic endeavors and eating street food with old friends.

Aksa Mahmud has taken a step back from the day-to-day operations of his Bosowa Group, but his schedule remains tight.
He is still deeply engaged with the group's multifarious business activities, which span infrastructure, power plants, shipping, energy, cement production, automotive dealerships, media and banking.

“I want to see how my team is managing their jobs and I want to scope other opportunities in the region,” says Aksa of a recent trip to Kupang, East Nusa Tenggara, center of Bosowa's cement operations. While his cement operation is centered on Makassar and Batam in Riau Islands, East Nusa Tenggara is one of its biggest markets. 

Nor is he afraid to speak his mind. On a visit to his $13 million Awal Bros Hospital in his hometown Makassar, Aksa issued very firm instructions to management on its construction, down to the finest details such as the electrical wiring. 

When he's not telling his managers what to do, he's listening. Aksa regularly meets with local village heads to keep abreast of local issues such as wage disputes.

“Actually, I only see the progress of the group from outside,” he says of his new advisory role. “I leave it to my children to run the business. My central job is mainly dealing with people from different parties, whether it is related to business or not, including the government.

“Businessmen have to get along well with all parties, particularly with the government,” points out the brother-in-law of former Vice President Jusuf Kalla.

The Bosowa Group, founded by Aksa in 1973, is now run by his son Erwin Aksa, the current CEO, with help from his brothers Sadikin and Subhan.  “One success story for a parent in a family business is how well they train their offspring and delegate authority smoothly,” muses Aksa.

One of his executives, Maddo Pammusu, chairman of media subsidiary Tribun Timur, says Aksa handled the transition to the next generation with grace. Edwin has strong business acumen and a wide social network that has helped boost the group over the past five years, adds Maddo.

These days the 66-year-old Aksa prefers to spend his time overseeing the group, developing business initiatives for local farmers and spending time with friends. “I really appreciate the importance of friendship and that becomes like a pool to rejuvenate relationships and create meaning in life,” says Aksa, who enjoys unwinding by playing golf and going diving with his friends.

The last time he was in Kalimantan, he adds, he spent a day seeking out an old friend from junior high school and today they have opened a business in Makassar.

Aksa's benevolence also extends to his ideas about business. GlobeAsia accompanied Aksa on a recent trip to Makassar to take a look at his Bosowa Foundation's dragon fruit plantations. The foundation is aimed at empowering local communities by providing them with jobs and the chance to make a profit.

Aksa surveyed the plantation on arrival and later took the chance to settle the down payment for another car dealership in Papua via internet banking. “Thanks to technology, banking has become more personalized, serving the specific needs of its customers,” says the owner of medium-size Bank Kesawan.

The foundation, which Aksa funds with an annual donation of $2.5 million, also provides scholarships to students pursuing higher education both at home and abroad. Last year, one student was able to study courtesy of the foundation at the Massachusetts Institute of Technology (MIT), with no strings attached. “He is now working with a foreign company in Singapore,” explains Aksa.

For the people

Rather than moaning about potential rice shortages, Aksa has initiated a food project that employs a thousand local farmers in South Sulawesi.  The project provides seeds and technical advice and is designed to increase productivity.

He believes that improved production cycles driven by factors including sophisticated machinery from Taiwan have allowed farmers to produce twice the yield of rice, at 10 tons per hectare. 

“Later on the foundation will control the shares in the subsidiary company that engages in the rice production, so the foundation will be self-sufficient in terms of financing,” he explains.

Under the program, farmers can also apply for financing to buy fertilizers and pesticides and other necessities.  Aksa says he plans to buy the rice from the farmers for a higher price than they would get from the government. On-site rice mills with output of about four tons per hour will package the product for supermarket shelves.

Never one to think small, Aksa also wants to open a rice powder plant to meet local market demand. “It will be integrated rice farming,” he declares.  The rice initiative, he adds, is mutually beneficial because it improves the welfare of local farmers and is personally fulfilling.

“I can feel the real impact of this social business project as it impacts many lives rather than just the shareholders,” he says. Like a true businessman, he adds that rice can be highly profitable.

Future projections

Aksa's cement operation - under Bosowa Cement's two operating companies PT Semen Bosowa Maros and PT Semen Bosowa Indonesia - continues to grow and is set to produce 5 million tons by 2012 and double that by 2017.

The company is currently focused on completing another two cement plants and a silo to meet the short-term production target of 5 million tons. “Java remains the big market, and we compete to supply the market,” says Aksa, confirming that PT Semen Bosowa Indonesia will go public next year.

Also full steam ahead is the group's 2x 125 MW power plant in Jeneponto, scheduled for completion by the end of this year. “We have made a deal with PLN. The company has agreed to buy our electricity,” he says, noting that to support its energy business the group is also completing a $40 million gas terminal project in Makassar.

And in another booming market, Aksa says he is surprised by the high demand in eastern Indonesia for cars. Besides selling the Mitsubishi brand, Bosowa also introduced Korea's Hyundai and Malaysia's Proton to the Indonesian market.

Business guru

With a dynamic business empire that is growing by 20% each year, when he's not touring his business empire and working with his foundation, Aksa is happy to sit back and enjoy his life.

Walking down a Makassar street, he is constantly stopped by passersby for a chat and often invited for a quick snack at a street-side stall.

 “We learn a lot from him, such as how to deal with business and make bold decisions. He is the guru of our business,” said Makassar businessman Rachmat Endong Patompo. 

“From end to end you will find Bososwa's business in Makassar and in some major cities in eastern Indonesia,” Rachmat adds, pointing to a Bosowa taxi, the 23-floor Bosowa Tower and the four-star Aryaduta hotel.

His toll road in Jakarta, which connects Serpong and Pondok Aren, produces consistent income, while the Makassar Toll Road project also continues to grow. “If government does its job in terms of land clearance then we will be moving ahead to another project,” he notes.

Aksa might be the patriarch of a huge business empire but he says he doesn't see himself as different. “I don't feel like a rich man. I just want to have a normal life, meeting and talking to different people and eating street food,” he smiles. GA

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