Rodamas Group: Designing Strategies in Erging Economies

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Indonesia

Indonesia
is
a
vast
archipelago
with
a
population
of
around
240
 million,
and
has,
over
the
years,
 experienced
significant
growth.
 Local
partners
were
essential
to
manage
the
appropriate
 connections
in
a
country
that
was
 rapidly
developing
but
which
still
suffered
from
weak
 infrastructure,
law
enforcement,
and
rampant
 corruption,
making
every
aspect
of
operations,
including
obtaining
 permits,
buying
land,
hiring
personnel,
 procuring
inputs
and
distributing
products,
a
challenge.
The
 cultural
diversity
and
geography
for
example,
 with
hundreds
of
languages
and
islands,
made
it
hard
to
distribute
 products
and
effectively
market
them.
 The
low
disposable
income
compared
with
the
large
population
 meant
that
there
were
large
markets
for
 products
that
catered
to
daily
needs,
such
as
food,
clothing,
soap,
 construction
materials
and
other
basic
needs.


Rodamas

•  Rodamas
(which
means
“golden
wheel”)
was
started
 by
Mucki
Tan’s
father,
Tan
Siong
Kie
(hereafter
Tan
 senior),
in
1951
in
Jakarta
as
Ho
Hoa
Trading
 Company
Limited
 



He
had
studied
business
and
journalism
in
the
 university
and
this
education
proved
very
useful
for
 his
career
as
a
businessman.
It
enabled
him
to
 communicate
with
international
business
owners
 and
he
understood
international
markets.


Indonesia
under
Sukarno

•  Following
independence,
the
country’s
new
Indonesian
 leaders,
in
particular
President
Sukarno,
set
out
on
a
path
of
 socialism
and
“guided”
democracy.
His
policies,
influenced
by
 communism,
were
detrimental
to
the
economy.
During
 Sukarno’s
rule,
economic
growth
declined
and
inflation
 soared.
Sukarno
also
implemented
measures
to
restrict
the
 economic
activities
of
the
ethnic
Chinese
minority,
which
 played
a
major
role
in
the
private
sector.
In
the
years
prior
to
 the
founding
of
Rodamas,
Sukarno
nationalized
most
foreign
 companies,
which
implied
that
many
foreign
mangers
left
the
 country



The
environment

•  For
people
like
Tan
senior,
it
was
a
difficult
and
hostile
setting
 in
which
one
had
to
navigate
carefully.
But
it
was
also
one
of
 the
opportunities,
since
many
existing
foreign
businesses
 closed
and
left
a
gap
that
needed
to
be
filled.
 
 In
this
context,
with
little
industrial
activity
and
no
expertise
 to
produce
even
basic
products
domestically,
 
 many
business
leaders
focused
on
trade,
mostly
import
trade,
 and
Rodamas
followed
this
pattern.
It
 
 developed
partnerships
with
foreign
manufacturers
and
 became
their
agent
in
Indonesia


Rodamas’
Portfolio

Building
Material:
Glas

 •
PT
Asahimas
Flat
Glass
Tbk
(40.67%)
 Food:
MSG
Other
Foods
Product
 •
PT
Mitratama
Rasa
Sejati(100%)
 •
PT
Mitratama
Kencana
Sejati
(100%)
 •
PT
NabiscoFoods
(30%)(sold)
 •
PT
Sasa
Inti
(50%)
 •
PT
Sasa
Fermentasi
(50%)
 •
PTAjinomoto
Indonesia
(50%)


Rodamas’
Portfolio

•  Consumer
Goods
Product
 •  Personal
Careand
Household
Product
Medicated
 Plaster,
Liniment,
and
Gel
 •  •
PT
Kao
Indonesi
a(49.97%)
 •  •
PT
Hisamitsu
Pharma
Indonesia
(25%)
 •  Chemical:
 •  •
PT
Asahimas
Chemical
(18%)
 •  •
PT
Riken
Asahi
Plastics
Indonesia(10%)
 •  •
PT
Kao
Indonesia
Chemical
(5%)


Rodamas
Portfolio

•  •  •  •  •  Other
Business:
 PT
Dai
Nippon
Printing
Indonesia
(49%)
 •
PT
Saint
Gobain
Winter
Diamas
(25%)
 •
PT
Eratex
Djaja
Tbk
(19.6%)
(sold)
 •
PT
Video
Display
Glass
Indonesia
(5%)
(sold)


Suharto
1966
‐
1998

The
largest
conglomerates
in
the
country
were
those
that
were
 closest
to
Suharto
and
his
family.
At
the
same
time,
he
 restricted
the
ethnic
Chinese
minority
in
its
cultural
and
 linguistic
expression,
and
he
prohibited
Chinese
Indonesians
 from
engaging
in
political
or
bureaucratic
roles.
Many
smaller
 business
leaders
realized
how
the
system
worked,
and
tried
to
 link
up
with
bigger
and
more
well‐connected
tycoons
in
order
 to
gain
a
share
of
the
bounty.
In
this
context,
Tan
senior’s
 decision
was
to
stay
away
from
a
crony
relationship
with
...
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