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 (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
• 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
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%)
• 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%)
• • • • • 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 ...