An hour’s drive west of Jakarta the congested metropolis gives way to ordered streets lined with greenery. This is the Lippo Karawaci township, a flagship project for the Lippo Group, one of Indonesia’s most powerful conglomerates. It also owns the hospitals, malls and coffee shops scattered around the urban development.
“I started from what we called sandang, pangan, papan, jalan, which respectively means clothing, food, housing, roads,” explains Lippo Group’s founder and chairman, Mochtar Riady, who has built a cradle-to-grave business empire that permeates every corner of life in Indonesia.
A middle-class Indonesian could be born in one of 4,800 beds in Lippo’s Siloam Hospitals, live in one of the group’s apartments, study at the University of Pelita Harapan that Mr Riady founded and buried in the upmarket San Diego Hills Memorial Park burial ground that cost $1.1bn to develop.
With a mix of listed and private entities both at home and abroad, Mr Riady’s empire is difficult to value but the patriarch dismisses local media reports that put the group’s assets at $11bn as an underestimate.
In a carefully pressed batik shirt and with his hair combed neatly into a side-parting, the 86-year-old is one of a generation of powerful Chinese-Indonesian entrepreneurs that has led business for decades in Southeast Asia’s largest economy — a posse that includes the founders of the powerful Salim Group and the palm oil-to-paper Sinar Mas conglomerate.
Having faced riots and pogroms, many ethnic Chinese businessmen — like Mr Riady — keep a low profile and go by their Indonesian names.
Born in East Java as Lie Mo Tie, the soft-spoken octogenarian says he thinks of his life in 20-year phases. “The first 20 years was a very, very hard time for me because I was facing four different wars,” he says, speaking in his office, where the shelves are lined with books about the late Singaporean leader Lee Kuan Yew, and China’s power and relations with Indonesia.
From coping with sparring warlords and the civil war between Mao Zedong’s Communists and Chiang Kai-shek’s Nationalists in China, to the Japanese occupation and the independence movement in Indonesia, Mr Riady’s early life was hardened by conflict as he moved between the two countries.
It was in his second 20-year phase that Mr Riady entered the Indonesian business community in earnest. Having started out running a bicycle shop in East Java, he went on to make his name in banking after being hired by Liem Sioe Liong, founder of the Salim Group, to turn round Bank Central Asia, the country’s largest privately held bank
.
Although Lippo is now better known for its real estate investments than for banking, the centre of Mr Riady’s interests was once Lippo Bank, which was sold to the investment arm of the Malaysian government.“I got into the property business by chance,” he says. “In 1990, Indonesia was facing recession, many of our customers were facing financial problems and some didn’t have capability to pay back their loans . . . so we were forced to accept this land.”
Last year, many economists were looking back at the 1997-98 Asian financial crisis amid growing concerns about Indonesia’s fast depreciating currency and a sharp economic slowdown.
Mr Riady acknowledges that business did slow for many local entrepreneurs but points out that most are in far better shape than two decades ago, when corporate governance was markedly weaker.
“I believe that most Indonesian corporates, they have a very strong financial base,” he says.Most recently, Lippo has made headlines less from expanding its portfolio of malls and more from what goes in them. Mr Riady points to his Hypermart chain, which has ousted France’s Carrefour from prime sites in Indonesia.
Where Cinema 21 once had a stranglehold on the local industry, Lippo plans to build 1,000 new cinema screens in the next five years through its Cinemaxx unit. And in recent months, Lippo’s Maxx Coffee stores have been springing up across Jakarta, with a circular green logo and modern interiors that bear a striking resemblance to a certain US brand.
Mr Riady talks about how he has guided Lippo through a period of rapid globalisation. From buying the US Bank Tower in Los Angeles to partnering with Japan’s Mitsubishi for the Orange County development in eastern Jakarta more recently, Mr Riady has long harboured global ambitions and has decades of experience in working with international investors. American investors are more short term, he says.
“But the Japanese [relationship] is different: when we make friends it is very difficult, it takes a long time but when we have already made friends it’s very solid.”
“In the past 200 years, all economics related to [the] motor dynamo but today everything is related to digital,” he says.
The patriarch claims to be driven by devout Christian values, providing services for the public. But Lippo’s reputation in business circles seems murky.
The Jakarta Globe newspaper, which published its last print edition in 2015, for example, was known for its heavy coverage of other Lippo businesses. Mr Riady’s son James received an $8.6m fine from the US Department of Justice in 2001 after admitting to breaching federal election laws by contributing to family friend Bill Clinton’s run for the White House.
As in much of Asia, where large businesses are often family-run and the younger generation are frequently schooled abroad, analysts are watching succession planning at Lippo. Alongside Mr Riady’s sons James and Singapore-based Stephen, his grandson John Riady is heavily involved in day-to-day operations. A Wharton alumnus, he is well-liked in Jakarta business circles.
Jean-Pierre Felenbok, managing partner at Bain in Jakarta, sums up the question many in the region ask about family businesses: “How do you professionalise a company, putting some systems in place without losing those founders’ values? Often the second or third generation is at the crux of that tension.”
Yet, even with able offspring tugging at the reins, the octogenarian Mr Riady spends 12 hours a day in the office.
Strolling around the modern buildings of the Mochtar Riady Institute for Nanotechnology — one of the chairman’s many attempts to segue into the modern world — Mr Riady points to a striking statue of a naked man with what looks like a yo-yo, but is in fact an apple in a Salvador Dalí tribute to Isaac Newton.
“Old men are always talking about the past but I’m young, so I’m talking about the future,” he says, with a smile.
No comments:
Post a Comment