Sukanto Tanoto


Sukanto Tanoto
Sukanto Tanoto
[1][2]
Residence Indonesia
Ethnicity Han Chinese[1][2]
Citizenship Indonesia
Sukanto Tanoto
(Chinese Indonesian name)
Traditional Chinese
Simplified Chinese
Hanyu Pinyin Chén Jiānghé

Sukanto Tanoto (traditional Chinese: ; simplified Chinese: ; pinyin: Chén Jiānghé; born in Medan on 25 December 1949)[2] was said in 2008 as the richest Indonesian, according to the Forbes magazine with the total net worth of US$ 3.8 billion (ranked 284th on Forbes 500 list).[3] Started as a supplier of equipments and materials for the state own oil firm Pertamina, Sukanto Tanoto then moved to the forest industry in 1973. He acquired public pulp and paper business Asia Pacific Resources International on New York Stock Exchange, which then delisted in 2001.[4] His current business vehicle is Raja Garuda Emas International or Royal Golden Eagle International (RGEI), a holding company with its activities ranging from paper, palm oil, construction, and energy business sectors.

Contents

Biography

Born on Christmas Day 1949, Sukanto Tanoto was the eldest of seven boys.[2] His father was an immigrant from the Fujian province of the mainland China. In 1966, when he was just 17 years old, Tanoto's education was suddenly put into an abrupt stop, because all local Chinese schools were shut down by Suharto after he took over the presidency. Tanoto immediately conducted his first business. "I was studying in a Chinese school. I wasn't allowed to go to a national school because my parents held Chinese citizenship. I was considered a foreigner. I never learnt Bahasa Indonesia formally," Tanoto recalls.[2]

Working for 16 hours a day, the young Tanoto slowly moved from a common trading to snare contracts in building gas pipelines for multinational companies.[2] His luck began to show up during the 1972 oil crisis. Oil prices went hike and oil producers rapidly expanded their operations. Tanoto's contracts grew dramatically and he managed to cash in his first US 1 million dollars.

With some capitals at hands, Sukanto Tanoto tried to force his luck on bigger business. Tanoto noticed that Indonesia exported wooden logs, which were then converted into plywood abroad in countries like Japan or Taiwan and then imported back to Indonesia with higher costs.[2] Realizing this inefficiency and also an opportunity, Tanoto then wanted to start business in the pulp industry. However, he first needed a permit.

In the Suharto's administration era, it was a common practice to conduct business with politicians, who in turn were army generals, to ease permit applications. A skeptical army general, who at first doubted Tanoto's business plan, agreed to give him a 'permission' with a requirement that Tanoto must report him back when the factory is finished. In 10 months, Tanoto built his first pulp mill, Inti Indorayon Utama in the North Sumatra province. The army general was impressed and he alerted the country's top leader.[2] On 7 August 1975, Suharto descended to Medan to inaugurate the factory.[5] The new pulp industry initiated Tanoto's business with Suharto, which swiftly made himself as a new Indonesian tycoon in the 1980s.

Sukanto Tanoto was a self-educated entrepreneur. He felt pity that he could not continue his education. He learned English word-by-word using a Chinese-English dictionary. In the mid 1970s, when he had established his business empire, he finally went to a business school in Jakarta. Feeling unsatisfied, he continued to study at INSEAD, a reputable business school in Fountainbleu, France.[2] The feeling of having a dropped-out school makes him enthusiastic on pursuing more education. He makes a frequent visit to management courses at top universities, such as Harvard, Stanford, Kellogg, Wharton, Carnegie Mellon, etc., which he calls it a 'management holiday'.[2]

In the mid 1990s, Tanoto and his family relocated to Singapore and is having its base operation there. The Indonesian press speculated over this move that Tanoto was trying to seek safe place as a financial fugitive. Tanoto denies the allegation and is arguing that the relocation is merely for the effectiveness to meet with his international clients.[2] He claims that he is still holding Indonesian passport and citizenship.

Business activities

Pulp industry

In 1989, Sukanto Tanoto started a pulp mill under the name of PT Inti Indorayon Utama, which was built at a small village Porsea nearby Lake Toba of North Sumatra. The mill however did not run smoothly with the local people, who argued that it had polluted the area, performed major deforestation and injustice land grabbing. From the beginning, the Indonesia's first pulp mill was full of conflict history. The initial permit released contained land disputes, the quality of air and water around Asahan River degraded drastically, which was said to be responsible to certain skin diseases, reducing corp production and water contamination,[6] was responsible for some landslide disasters in the area and released toxic chlorine gas during the 1993 boiler explosion.[7] However during the Suharto administration, Indorayon enjoyed freedom of its activities due to the close ties between its owner with Suharto. Demonstrations and legal action to the governmental agencies, that had started since 1986, failed to stop the factory's activities which in turn was answered by detentions, arrests, beatings, raids and violent acts by the local security forces.[7]

Following the downfall of Suharto in 1998, public pressure began to grow, but it was always answered with violence and terrors by police officers hired by the company. Clashes between local residents, staffs and members of security forces were unavoidable and resulted six deaths and hundreds of injuries in 1999.[8] As a result, President Habibie temporarily put the mill on halt on 19 March 1999. Although lobbies were conducted by Indorayon's supporters, including the-then ministry of trade Jusuf Kalla, the factory was closed down permanently by President Wahid after fierce oppositions from local people and environmental activists followed by more fatal demonstrations.[9]

Raja Garuda Mas International

With Raja Garuda Mas International (RGM International) holding company, Sukanto Tanoto controls his business empire. The company holds the Pacific Oil & Gas (a private energy resource company who runs in Indonesia, Singapore, China and Hong Kong),[10] Asia Pacific Resources International Holdings Limited (or APRIL, a producer of fibre, pulp and fine paper),[11] Asian Agri (an agrobusiness industry which owns 20,000 hectares of oil palm, rubber and cocoa plantations in Indonesia, Philippines, Malaysia and Thailand),[12] PEC-Tech (a construction and logistic service company),[13] and Sateri International (a producer of viscose fibre and dissolving pulp, headquartered in Shanghai).[14]

Note: RGM International has changed its name to RGE PTE LTD as of August 2009. In addition, RGE does NOT hold its operating companies but act as a management company representing the major shareholder.

News

1. “From rags to US$2.8b fortune”. The Business Times. 7 April 2007. http://www.sukantotanoto.net/index.php/from-rags-to-us-28b-fortune Laurel Teo from The Business Times caught up with Sukanto Tanoto in Singapore, where he has been based for more than 10 years.


2.“A tycoon’s view”. FinanceAsia. June 2006. http://www.sukantotanoto.net/a-tycoons-view Recognising the merits of conservation and sustainable development, Sukanto Tanoto talked about his various businesses and his environmental philosophy with Jackie Horne from FinanceAsia.


3.“Indonesia's Corporate Clean-up - REPUTATION MANAGEMENT”. Financial Times. 21 February 2006. http://www.sukantotanoto.net/index.php/indonesias-corporate-clean-up- Sukanto Tanoto told Joe Leahy from Financial Times about the business need for his group's companies to rebuild their tarnished image.


Corporate responsibilities and philanthropic activities

Having learned hard experience with Indorayon, Tanoto began to establish a corporate social responsibility (CSR) along with his other pulp business in Riau province.[2] Through Riau Andalan Pulp & Paper (RAPP), Tanoto built schools, established a farming system to teach villagers an alternative cultivation than the slash-and-burn technique and made regular sustainable reports to NGOs, such as the World Wildlife Fund after the organization concerns over the conservation of forests in Riau province.[15]

Sukanto Tanoto also set up The Tanoto Foundation, which awards Tanoto Foundation Professorship Award. In 2007, the award worth USD 130,000 was granted to two Indonesian academic scientists which have given their efforts to enable technological research programs for the society.[16]

Controversies

In May 2007, Indonesian officials hunted down the main players of Asian Agri Group, including Sukanto Tanoto, for tax embezzlement.[17] It was estimated that the state of Indonesia had lost of a minimum of 786.3 billion rupiahs from this case. However, the group published a statement that the materials for the tax evasion case were obtained from a former Asian Agri employee, who was on the run after embezzling more than US$ 3 million from the company.[2]

References

  1. ^ a b http://www.forbeschina.com/list/988
  2. ^ a b c d e f g h i j k l m Laurel Teo (2007-04-07). "From rags to US$2.8b fortune". Business Times Singapore. Archived from the original on 2007-07-05. http://web.archive.org/web/20070705183323/http://www.rgmi.com/index.php/component/option,com_docman/Itemid,/task,doc_download/gid,8/. Retrieved 2007-10-15. 
  3. ^ "Five Indonesians on 'Forbes' rich list". The Jakarta Post. 2008-03-08. http://www.thejakartapost.com/news/2008/03/07/five-indonesians-039forbes039-rich-list.html. Retrieved 2008-03-13. 
  4. ^ "Sukanto Tanoto and family". Forbes. 2006-08-06. http://www.forbes.com/lists/2006/80/06indonesia_Sukanto-Tanoto-family_USK7.html. Retrieved 2007-10-15. 
  5. ^ During the inspection, Suharto did asked a lot of questions to Tanoto, including the cost calculation, profits, labour and the reason why building a factory instead of exporting (see Teo 2007).
  6. ^ "Thousands protest reopening of Indorayon pulp plant". Down to Earth. February 2003. http://dte.gn.apc.org/56tpl.htm. Retrieved 2007-10-15. 
  7. ^ a b "Indonesian Heroes of the Earth from Toba Samosir". WALHI. 2003-04-23. http://www.eng.walhi.or.id/kampanye/cemar/industri/hero_earth_cs/. Retrieved 2007-10-16. 
  8. ^ "Violence escalates at Indorayon pulp plant". Down to Earth. May 1999. http://dte.gn.apc.org/41p&p.htm. Retrieved 2007-10-15. 
  9. ^ Frances Carr (2001). "Indorayon's Last Gasp?". Inside Indonesia (65). Archived from the original on 2007-07-17. http://web.archive.org/web/20070717232310/http://www.insideindonesia.org/edit65/dte.htm. Retrieved 2007-10-16. 
  10. ^ "Energy Resource Development". RGM International. Archived from the original on 2007-10-11. http://web.archive.org/web/20071011005451/http://rgmi.com/index.php/content/view/21/34/. Retrieved 2007-10-15. 
  11. ^ "Fibre, Pulp & Paper". RGM International. Archived from the original on 2007-10-11. http://web.archive.org/web/20071011005314/http://rgmi.com/index.php/content/view/18/30/. Retrieved 2007-10-15. 
  12. ^ "Agro Industry". RGM International. Archived from the original on 2007-10-11. http://web.archive.org/web/20071011005429/http://rgmi.com/index.php/content/view/19/32/. Retrieved 2007-10-15. 
  13. ^ "EPC and Logistic Services". RGM International. Archived from the original on 2007-10-11. http://web.archive.org/web/20071011005457/http://rgmi.com/index.php/content/view/22/35/. Retrieved 2007-10-15. 
  14. ^ "Rayon and Speciality Pulp". RGM International. Archived from the original on 2007-10-11. http://web.archive.org/web/20071011005436/http://rgmi.com/index.php/content/view/20/33/. Retrieved 2007-10-15. 
  15. ^ "Pulp mills put heavy pressure on forests: Study". The Jakarta Post. 2002-02-09. Archived from the original on 2007-11-17. http://web.archive.org/web/20071117043333/http://www.thejakartapost.com/yesterdaydetail.asp?fileid=20020209.J04. Retrieved 2007-10-15. 
  16. ^ "RI not giving enough toward research and development". The Jakarta Post. 2007-09-08. http://www.thejakartapost.com/news/2007/08/09/ri-not-giving-enough-toward-research-and-development.html-0. Retrieved 2007-03-13. 
  17. ^ "Tax Officials to Hunt Down Sukanto Tanoto". Tempo. 2007-05-26. http://www.tempointeraktif.com/hg/nasional/2007/05/16/brk,20070516-100106,uk.html. Retrieved 2007-10-15. 

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