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Wednesday, 14th June 2006

Prospektif – Jakarta, Peter Sondakh may become one of the Indonesian conglomerates that can maintain his existence. Under the umbrella of PT Rajawali Corporation, he went into many businesses. Starting from cigarettes, telecommunication, hotel, plantation, mining, retail up to transportation. He experienced many up and downs in doing the business. How did he build his business? How is the performance of the business so far? And whether his ambition to enter into cement industry can be realized?

Low profile. That is the our initial impression upon seeing Peter Sondakh. Even though he is a successful businessman and managed to make into the list of the conglomerates, he is still a low profile person. “He is not an arrogant person, have a good sense humour and always care towards his employees,” said Darjoto Setyawan, Managing Director and Chief Business Development PT Rajawali Corporation owned by Peter Sondakh. The same is true in his daily routine. According to Darjoto, Peter often calls out the names of the employees first. Not only that, this white skin and handsome man always refuses the interview request by the media. The interview request to publish him in the special issue of PROSPEKTIF Magazine was rejected. PROSPEKTIF then must be satisfied with the answers from his trusted lieutenants.

His Early Days
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According to Darjoto, Peter Sondakh trusted lieutenant, Peter started his business around 1980. Starting from a small company that involved in the Tin trading. His luck changed when Peter Sondakh started a joint venture with Ometrace owned by Ferry Teguh Santosa. It all grown into Rajawali Corporation. In that year Peter started to build PT Rajawali Corporation, as a holding company for some of the subsidiaries. PT Rajawali Corporation then started to grow and went into numerous businesses such as cigarettes, telecommunication, hotel, retail, plantation and mining.Â

Time went by, and Peter Sondakh did some business maneuver. Among them was he founded RCTI which became the first private television. In the telecommunication, XL became the first private cellular operator using the GSM (Global System for Mobile Communications) technology. Peter also successfully managed XL to become the third largest cellular private operator in Indonesia. Together with PT Pos Indonesia, Peter founded Bank Pos. In 1989, Peter founded Lombok Tourism Development Corporation (LTDC). In the same year, Peter also founded Taksi Express. In 1991, Rajawali Corporation took over Bentoel that at that time was saddled with heavy debts and successfully restructure them. In this 1991, Peter also founded PT Metropolitan Retailmart that operates the Metro Department Store.

Peter also went into the property sector by building Sheraton Novotel and Hyatt. Not to mention other businesses such as pharmaceutical company Guardian, and also in the IT sector by founding Telekomindo and NetToCyber. His business grew rapidly. But, unfortunately the crisis that hit Indonesia in the middle of 1998 also hit him hard. Peter, involuntarily unloaded some of his companies such as RCTI, Guardian, Bank Pos, and LTDC. Many of his assets were sold to assist the restructuring of his companies.“I still remember that it was on 30th June 2000, we were the first that concluded the restructuring process with IBRA. Mr Peter wanted to finish the obligations as quickly as possible,” said Y.W. Junardy, CEO PT Telekomindo Primabhakti, one of the business unit of PT Rajawali Corporation. Starting from 2000, many of his companies that managed to avoid the crisis due to restructuring, such as Bentoel, XL, Metro, Express, Sheraton, Hyatt, Telekomindo, and NetToCyber. Those companies are now growing well.

Taking Over Bentoel
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Managed by some professionals (not as family company), PT Rajawali Corporation recorded some good track records in some of the industry. For instance in the cigarette industry. Through PT Bentoel Prima, PT Rajawali Corporation managed to grow Bentoel brand. Darjoto Setyawan, who was trusted by Peter to take over Bentoel when it was in trouble, now starting to reap the results. Bentoel that was collapsed when taken over, can reclaim back its previous success.Â
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Currently, Bentoel Prima is the biggest cigarette producer in Indonesia, both from the production volume and sales figures. In order to achieve that, Bentoel must work hard through a long and winding road. First, Bentoel must reclaim the third position that is currently held by HM Sampoerna, then to the second position held by Djarum, and into the top one held by PT Gudang Garam. Some of the tactics were used, from managing its Human Resources up to sponsoring the football club ”Arema Malang” of Malang East Java, as Bentoel’s factory happened to be located in this city.
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Education for Employees
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In managing its human resources, the company has the policy to send their employees to study further. According to Darjoto, human resources must be well managed, from the team work point of view, motivation, management, health, discipline and many more. Even if we use the terminology of football team, Darjoto said that “Sales department as striker, administration and research department as the middle players, and the production department as the back players. So, everyone must play together as one orchestrated team in order to achieve the mutual goals.”
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The board of directors and employees have close relationship in PT Rajawali Corporation.
According to Darjoto, the employees can speak and discuss any problems they have. ”Even with the players of Arema Malang, Peter is considered close too. We sit, eat and sing together. We can regard him as parents, mentor, friend, everything,” explained Darjoto.
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Darjoto admitted, that members of Board of Directors of PT Rajawali Corporation always try to get close to the employees and understand their aspiration. The leadership style implemented in PT Rajawali Corporation is in the middle of between authoritarian and democratic style, as well as by giving good examples, which according to Darjoto are able to reduce the conflicts that usually happen between the employees and management. Before the conflicts even occur, Darjoto asks the human resources managers to socialize the contents of the Law of Work Force to the whole employees. Since, according to Darjoto, most of the employees do not understand the regulations contained in that law. ”The most important thing is the approach that we use. For sure, the doors of our office are always opened for them,” said Darjoto.

Current Business ClimateÂ

Currently, there are more than ten companies under PT Rajawali Corporation. PT Rajawali Corporation still retain shareholding in PT Excelcomindo Pratama Tbk, even though the majority of it has been sold to its Malaysian partner. The latest news even stated that even though the shareholding stands at 14%, officially Peter has resigned from his position as President Commissioner from PT Excelcomindo Pratama Tbk. “Peter has resigned from the organization structure and it had been approved by the shareholders as per 31 Mei 2006,” stated Budi, Corporate Secretary staff of PT Excelcomindo Pratama Tbk. “We still own 99 percent shares in the taxi. Bentoel around 20-30 percent, but we are controlling stake since we are the single majority. We work together with Metro Singapore for Metro Department Store. We also own around 95 percent shares in Sheraton Hotel in Bali, Lombok, Bandung and also Lampung. Another hotel in Lombok called Novotel, also 90 percent owned by us. We are currently building a hotel and villa in Bali called Stredis,” explained Darjoto about the ownership of shares and the business of Peter Sondakh at present moment. ”We also own a coal mining in East Kalimantan, palm-oil plantations in East Kalimantan and South Kalimantan,” he added. Since five years ago, according to Darjoto, Peter Sondakh has transferred the whole operational of his companies to the professionals. ”He is just acting as CEO and owner,” said Darjoto.

Cement IndustryÂ

Then, what about his chances in the cement business? According to Thomas Wibisono, conglomerate analyst from the Indonesian Centre of Business Data (Pusat Data Bisnis Indonesia – PDBI), Peter Sondakh can be regarded as ’wiz kid’ in business. ” ’Wiz kid’ in a sense that all of a sudden he became well known businessman and able to work together with two big companies such as Ometraco dan Gajah Tunggal,” explained Thomas.
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Not only that, added Thomas, he started to go into other business. Thomas predicted that Peter can also comes into the cement business. ”I think Peter has fresh fund from the proceed of the sale of his shares in Excelcomindo to Khazanah. And I think he would sell the rest of it,” said Thomas. “Since Peter also has property business, such as hotels, I think the acquisition of Cemex is a long term scenario for him. So, he will be able to control the business from the upstream to downstream,” guessed Thomas.
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Even though it has to face a lot of competitors and still waiting for the green light from the government, but Rajawali Corporation felt the optimism that it will own the shares of PT Semen Gresik Tbk. “We have signed the CSPA (conditional sales and purchase agreement) and therefore ready to be the partner of the government,” said Darjoto. Especially, according to the latest news, Cemex has sent a letter to the government confirming that they would continue with the finalization of CSPA with Rajawali. According to Cemex, after given some deadline, the government still does not use their rights. Therefore, Cemex is in the opinion that the shares of Semen Gresik are free property and can be sold to another party.
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As we all know, Cemex itself has offered its 29,4% shares in Semen Gresik to Rajawali Group. According to the agreement, Rajawali Group will pay that 24,9% shares in Semen Gresik worth totalling US$ 337 million or around US$ 2,28 per share or equivalent to Rp 19.988 per share. We have to admit, that in line with the increase in the infrastructure development in Indonesia, the cement industry has a good potential. According to its financial reports, the performance of Semen Gresik is projected to increase. It is shown in the projection of the increase in the revenue from Rp 6,007 trillion in 2004 to Rp 8,759 trillion in 2005. Likewise with the increase in the net profit from Rp 510,59 billion into Rp936,31 billion in 2006. The market share of Semen Gresik is also projected to reach 43,3 persen, with total production capacity of 15,95 million ton per annum.