The power of collaboration

By webadmin on 12:03 pm Aug 06, 2012
Category Archive

Albertus Weldison Nonto

Capitalizing on his wide-ranging networks and ties to an array of large local business groups, Hery Susanto is on track to grow his businesses.

As entrepreneur Hery Susanto sees it, the key to business success in Indonesia lies in thinking big and partnering with the best in each field. “We can learn a lot from them about how to grow a business,” he says of large local conglomerates and groups. “At the same time, big groups also need local business people to bolster their business at the regional level,” he adds.

Some three years ago, he put this philosophy into practice, partnering with Ganda Sitorus, the elder brother of Wilmar International founder Martua Sitorus, in a plantation business to capitalize on the group’s strength in CPO trading, and later in plantations. The 50-50 collaboration controls and manages around 17,000 hectares in Kalimantan. This is set to grow to 200,000 hectares in the next 10 years.

Using the same partnership method, Hery, known as Abun to friends, also developed forestry and wood enterprise First Resources Group with Marthias’ Surya Dumai Industry.

This is in addition to his interests in the coal industry, where he holds a minority 13% stake in PT International Prima Coal – with tycoon Peter Sondakh’s Rajawali Group and the government’s PT Bukit Asam controlling the remainder with 36% and 51% respectively. Today the medium-sized company produces more than 1.5 million tons of coal a year and is looking to boost that figure to 3 million tons this year.

Abun’s reputation in regional business circles also paved the way for his company to join in a land-clearing business in the Djarum Group’s industrial forest concession and the Japanese company Mitsui. His extensive fleet of heavy equipment and experience in the forest construction business also helped to make this opportunity a reality. “I have seen big business face difficulties in expanding at the regional level due to lack of knowledge and local connections, and we can help in this area,” he notes.

On setting up a business with a number of large groups, and what he has learnt over the years, he says: “Trust is the key factor.” It is also a matter of finding the sweet spot for share ownership, depending on who he works with and the situation at the conglomerate in question. “With a large group, for example, we usually take on a minority shareholder position, since they are often the ones who supply the money,” he states.

Entrepreneurial from early on

Abun had to join the workforce at an early age to help pay for his school fees, but says that this hardship shaped his outlook on life and boosted his knack for developing relationships with others. After graduating from high school in Jakarta, he started from the bottom of the ladder at a Surabaya shipping company as a tallyman.

Working in the port zone taught him to spot business opportunities and appreciate people, regardless of their social status. While still in that job, he started a small-time vegetable trading business, sending produce from Java to Kalimantan.

At 21, he set up a billiard business, his first. That closed because of a myriad of problems, before he opened an automotive workshop with credit from a national bank. The business remains, and is today managed by a family member.

Along the way, Abun also clinched a forest concession (HPH) on some 50,000 hectares of land, a result of a relationship developed with the Indonesian Army foundation. Despite the current volatility in this area, Abun says he is not worried about the ups and down of the pulp and wood business, and believes that each business has to go through difficult situations at some point in time.

This collection of experiences ultimately set Abun on the route to setting up his own shipping business. Today, PT Armada Kaltim Jaya has 13 ships transporting coal from and throughout Kalimantan. The company is supported by a dockyard subsidiary, which takes care of ship repairs.

In the property business, Abun has recently been focusing on giving back to his hometown, Samarinda in East Kalimantan. Abun initiated Samarinda Baru, a project to move the old city to a newer, larger space. But this plan has recently come under scrutiny from local social and political observers, as the first phase of development is believed to have caused serious flooding early this year.

Ever the determined optimist, Abun believes that this challenge can be overcome and the project can be brought to fruition. The plan is to move the Samarinda regency office to the new 2,000-hectare city. “We welcome parties who wish to collaborate with us in this new project,” says Abun, whose property interests in his hometown also extend to several hotels.

In Jakarta, Abun is betting on the growth of industrial estates, with a 5,700-hectare site in Purwakarta slated for development for business groups.

Lessons learned

His is clearly a varied portfolio, and Abun says he has learned a lot from dabbling in a range of industries – acting as a broker in many cases has sharpened his ability to spot business opportunities which may have otherwise gone unnoticed.

Citing the property business as an example, he notes that the attractiveness of the opportunity relies on having wide-ranging relationships with different parties including those in the government sector. “With input from those working in the government, you can get a better understanding of which cities and regions will be developed next,” he says.

Each business deal must be handled with a different approach, he adds. The plantation business, for example, requires a focus on public relations efforts because it deals with a range of partners and stakeholders.

And while operating a business may be easy, sustaining it is another challenge altogether, he muses. Abun counts his networks, partnerships and alliances as key tools for staying on top of his interests and forging new ones.

With more than 72,000 workers on his payroll organization-wide, Abun remains hands-on and in touch through workers’ cooperatives and social organizations. Maintaining close ties helps productivity, and empower his ability to manage difficult situations should they arise. GA