Palm oil production is a vital pillar of the Indonesian economy, and its versatility has made it an indispensable ingredient in many consumer products ranging from chocolates to lipsticks. In...
This is the second of two Inside RGE posts covering RGE Founder and Chairman Sukanto Tanoto’s keynote address to a visiting group of MBA students from the Wharton School of the University of Pennsylvania on May 25, 2015. He candidly shared his experiences, struggles and how he overcame various challenges. The previous post may be found here. The common threads of lifelong learning and overcoming adversity run deeply in the career and life of Sukanto Tanoto. He faced one of the sternest tests in the 1997 Asian Financial Crisis.
Having enjoyed a period of growth, the Asian Financial Crisis struck. Sukanto Tanoto called it a “scary moment”. At that point in time, he had USD 2 billion dollars worth of projects in Indonesia and China that he had to see through.
Mr Tanoto raised the example of 危机 (wei ji), which refers to crisis in Chinese. For him, in a crisis, there is danger 危险 (wei xian) as well as opportunity 机会 (ji hui). With perseverance, grit and a good support network of colleagues and family, he weathered the storm. He outlined an important principle that he and his businesses hold strongly – having the integrity and resolve to honour the agreement they have with the banks and repaying all loan principles and interests.
Overcoming the Crisis and Diversifying
In those trying times, the late-40 year-old Sukanto Tanoto sought strength and inspiration in his family. He took about three to four years to overcome the crisis and wasted no time on business growth and expansion. He looked to China and Brazil and ventured into the specialty cellulose and viscose staple fibre industry. He focused his diversification on the upstream without losing sight on expanding to occupy strategic nodes on the value-chain. His business emphasis is not about volume, but quality, sustainability and positive impact to other businesses and communities. In his experiences in China, he shared:
China cannot forever burn coal to produce electricity… China eventually needs (to use clean energy)… And we joint-ventured with Petrol China.
Life-Long Learning Journey
Mr Tanoto shared personal experiences from his continuous learning journey. With a voracious appetite for self-improvement and the pursuit of knowledge, he allocates time every year to attend courses in business and economics. Never one to rest on his laurels, he believes “Complacency is cancer.”
Philosophy Having examined the growing interconnectedness of business, communities, nations around the world, a post-Financial Crisis Sukanto Tanoto focused his businesses on the 3 Cs – Doing what is good for the Community, Country and Company. This plays off the business operating principle People, Planet and Profit, and is a fundamental principle entrenched in all of RGE’s companies. The complete “Sukanto Tanoto – An Entrepreneur’s Journey” playlist may be found here.
(Also see SMU students’ blog post)