SD Darmono has a vision to develop 100 top tourism sites around the country, starting with Borobudur in East Java and Tanjung Lesong in West Java. If he succeeds, he will reshape the tourism industry and expand his company beyond anyone’s dream.
Dream big seems to be the motto for SD Darmono. The entrepreneur and property tycoon admits that his adrenalin starts pumping when it comes to thinking up large-scale property projects that go beyond just boosting bottom line. This is why he says “I take on jobs no one else wants to do.”
One such job is taking on the position of chairman of PT Taman Wisata Candi, Borobudur, Prambanan and Ratu Boko, the state-owned company which is in charge of managing the land around the famous heritage sites in East Java. Since assuming the post in November 2008, he has replaced the board of commissioners and the board of directors to freshen things up.
Born in Magalang, a small town not far from Borobudur, Darmono has always had an emotional attachment to the region and in fact dreamed of building a city near the site.
“For 12 years before I took over, there had been no change,” he tells GlobeAsia at his Jababeka office in central Jakarta. “Today the company has a turnover of Rp100 billion and a profit of Rp40 billion per annum.”
Recently he invited Hollywood star Richard Gere to visit Borobudur as part of his strategy to raise global awareness of the Borobudur temple. Although a Christian, Darmono admits that Borobudur is Indonesia’s only national monument that can unite people of all faiths.
“We want to use Borobudur as the icon of Indonesia to promote the spiritual wealth of the nation,” he says. “Once people visit Borobudur on a large scale, Indonesia will be seen as a tolerant nation and this in turn will promote investments.”
He terms this form of promotion as “spiritual tourism” and it is no surprise that he is also chairman of the Indonesian chapter of the Pacific Asia Travel Association (PATA). His goal is to create 100 such destinations across the country so as to attract 20 million visitors a year by 2020.
“As the chairman of PATA, I am supporting the government and the Ministry of Tourism,” he notes. “This could be called a public-private partnership to raise the industry and revenue for the government.” Part of this program is also to make Jakarta the gateway for tourism in the country, which is why he has also taken on a job no one else has wanted for a long time – to head the redevelopment of Kota (Jakarta Old Town).
The re-birth of Tanjung Lesong
Darmono, of course, is better known as the founder and president director of listed property company PT Jababeka, the developer of the largest industrial estate in Indonesia in Cikarang, West Java. The township, which covers 5,600 hectares or 10% of Jakarta, has expanded over the years to include residential homes, a university, 10 hospitals, a botanic garden, golf course, movie land and a dry port. The company recently announced it would allocate $30 million to finish its power plant and another $10 million to expand its power plant.
According to Darmono, Jababeka’s net asset value currently stands at Rp9.7 trillion ($1.14 billion) and its profit for the first half of this year reached Rp51.6 billion, compared with Rp47.9 billion for the same period last year.
“We have had two good years and the industrial property market is just beginning to come back,” Darmono says. “There is god growth but at the same time it is also important for us to have recurring income from our power plant in Cikarang this year.” The 130 megwatt power plant will be completed this year end and will start selling electricity to state-owner power supplier PLN next year. The power plant will contribute $85 million to total revenue.
Darmono’s eye, however, is firmly fixed on tourism for long-term growth and in particular eco-tourism for which he sees enormous potential. It is for this reason that he has acquired 1,340 hectares for Rp1.5 trillion in Tanjung Lesung, West Java. Located next to the Ujong Kulong National Park, Tanjung Lesung has long been the seaside playground for Jakartans seeking some sun and sea.
“My vision is to build townships around the country and in Tanjung Lesong, I am building a township that is similar to Sentosa in Singapore,” says Darmono.
“It will have a golf course, a marina, hotels and resorts as well as major tourist attractions.”
The government has committed to build a toll road from Jakarta at a cost of Rp30 trillion and an international airport so as to help develop Tanjung Lesung as a major tourist destination in the country. Jakartans, however, will be the first target market.
Jababeka is the sole developer of the site, which has been earmarked as a special economic zone but the acquisition has yet to be approved by Bapepam-LK, the capital market supervisory agency. Darmono is confident the approval will be granted by both Bapepam and shareholders in late September.
“If we get the approval, we can start work next year,” he says. The move to resort development is both strategic and will expand and diversify Jababeka’s portfolio. More importantly, it will contribute significantly to the company’s revenue and profit.
“Industrial estates have a ceiling price of around $100 per sq meter but for resort land, the price can be much higher,” says Darmono. To develop the area faster, he says he hopes to sell 200 hectares each to a number of large property developers, the project can be completed much faster.
“Its near Jakarta, it has a beautiful environment and it will be eco-friendly,” he says. “Its all about collaboration and networking as I can help to provide the necessary licenses, management and facilities for the others.”
The going, however, will be not be smooth sailing given Indonesia’s infamous bureaucracy and redtape. Local governments have proven to be difficult business partners, prone to changing their minds and introducing new requirements midstream.
The toll road, for example, has not even started and the airport may take years to build. Entrepreneurs, however, are not so easily put off by such hurdles and Darmono intends to push on with his plan. He in fact started developing Tanjung Lesung in 1994 but was forced to sell it during the 1998 financial crisis. “I have an emotional attachment to the area and to me Tanjung Lesong is a jewel and is critical to the economic development of south Java.”
If he is successful in developing Tanjung Lesong into a world-class destination, the model can be replicated elsewhere in the country. Although the dream is his, Darmono is adamant that it not be his alone.