Sukanto Tanoto Leadership

Written by Bi Yajun of Chinese Businessman’s Strategy

Diligence establishes the demeanor of a great person through several decades’ cultivation.

“President Sukanto Tanoto is farsighted and good at practicing. He can put the foresight into practicing ……”
“President Sukanto Tanoto is a person who can create miracle ……”
“President Sukanto Tanoto has willpower and firm faith ……”
“President Sukanto Tanoto is very close to the staff, and care for the staff ……”

To speak of Sukanto Tanoto, several old officials who have already followed him for nearly 20 years have endless words to talk. Sukanto Tanoto interposed a remark often, which makes the atmosphere very active. Some staff said President Sukanto Tanoto was full of energy and others couldn’t catch up with, Sukanto Tanoto asked with a smile ” why can’t you surpass me?” When some staff said they never see that President Sukanto Tanoto was tired, Sukanto Tanoto added:” Why am I not tired, that’s because you didn’t see. ” To the statement of having daring and resolution, Sukanto Tanoto corrected and said:” Daring and resolution, do you calculate it, I have calculated very clearly. ” What the staff said are verified by pieces of facts.

“When the factory was built in 1988, an Englishman was responsible for capital construction. When I get to the site for check at 11 o’clock one Sunday and found there was something wrong, I required him to rush to do well the project. I asked him what he needed. He said: I want to sleep. “Sukanto Tanoto said.
Sukanto Tanoto established the paper pulp factory from zero directly to 1 million tons. It is only one of its kind in the whole world.

“The design consultant invited from foreign countries looks down upon us, even withdrew later. The staff all took to heart, I encouraged them not to be angry, but try to make a good showing. A few years later, the atomic bomb exploded. ” Sukanto Tanoto and all the staff of RGM took great pride in the miracle of the world paper pulp industry created by himself.

“Have no experience does not equal to I can not do. Chinese people are so. There is no atomic bomb, they can make one. There are no satellites, they can make one too relying on their own efforts. But don’t be crude and impetuous. Before we do, we spent two years studying from others, investigate and study more. Use more talents. Those who do not understand don’t pretend to know. Think carefully before action. Once you make the decision, you should stick to.”

Those who do not understand don’t pretend to know. During the interview, Sukanto Tanoto emphasized several times: “I like observing and studying, draw experience from practice. When I do something each time, I would consult the most successful person in the trade and also look for the person who failed. Everybody said that this person has failed, why do you look for him? We should consult his advice, but don’t repeat his mistake. The positive and negative should be combined together. This is Chairman Mao’s contradiction theory. ”
Sukanto Tanoto summarized his reasons for success as 3. One is friend, the second is idea, and the third is diligence. When he was asked how to arrange time after work, he referred to studying two times: reading, when I have time, I will read books.”

Sukanto Tanoto reads all-embracing books, both in Chinese and in English. He liked reading ” talking about protracted war ” and “contradiction theory “of Chairman Mao since childhood and learns much history and intelligence of China. “Later I also read books of the west and of the Chinese Mainland, Hong Kong, Macao and Taiwan. Some books of Taiwan about management were good. I taught myself English, mainly through buying the magazine, and I had courage to speak, I could read English books two or three years later. “

He said: “If we want to do things well all the time, and are promoting ourselves constantly, you can get repayment naturally after a longer time. “Till now, Sukanto Tanoto takes three weeks to study in the world-famous universities every year, participates in some short-term training courses of economy and management.
Because of these, Sukanto Tanoto can always look far and plan completely.

“20 years ago, President Sukanto Tanoto said after 2000, the three-ply board factories of Indonesia could not maintain because trees of Indonesia are limited. When he said so, these factories were all making a lot of money, now things are really like this. At that time he said that we must plant trees because in the future resources would get the upper hand. Everything is confirmed.” An employee on the senior level of RGM said.
Speaking of resources, Sukanto Tanoto said: “We enjoy three kinds of resources, abundant natural resources, advanced technological resources and outstanding talent resources. “

“Take talents as the foundation and rely mainly on working. ” is Sukanto Tanoto’s principle of choosing the right person. He said: “China uses talents, I use them to work. There are a lot of talents, but they must work. It needs efforts to build up enterprises. ” At the same time he said with sincerity:” The biggest challenge lies in talents while developing. “

For this reason, RGM allocates the world-class equipment, offers the world-class chance, and enlists the most outstanding talents from the whole world. RGM is like the United Nations, the staff are not only from China Mainland, Hong Kong, Taiwan, but also from U.S.A., Britain, Canada, India, Singapore, etc. These talents of different nationalities and cultural backgrounds gather in RGM. They are innovative and do solid work and are the most valuable resource in the fast development of RGM.

“I administer personnel. People are the most complicated. Chinese call it management. If you pay no attention to them, serious problems will arise; also it is impossible if you use them without arrangement or arrange them without administration. Both administration and coordination are needed. Chinese words are really extensive and profound. “He said.

Sukanto Tanoto, who realized two great improvements at the two time’s great economic depressions of oil crisis and financial crisis, has his own deep experience in the crisis. He said: “There are also good opportunities in the crisis. Whether you could transfer crises to opportunity lies in your solid foundation. You should do things steadily and surely, just like a tall tree needs a profound root; a tall building needs firm ground. Furthermore, at the critical moment, you should be clearheaded, have faith and be confident. When the dark is end, the brightness is sure to come. When you are in the brightness, don’t be proud, otherwise dark will come. Not only confidence is needed, you must see through what will happen next, and have the ability to cope well and get hold of.”

egg basket

” Don’t put eggs at one basket “ is Sukanto Tanoto’s another strategy. What is valuable is that he never puts the egg in a basket that has nothing to do with his core advantage. In these decades, he has been carrying on long-term, sustainable strategic investment around resources. In the words of staff of his company: President Sukanto Tanoto knows forever what he can do, and what he can’t do.

Sukanto Tanoto’ s own view of this is: When enterprises reach a certain scale, they do not make money, but make an industry. Undertaking should be made interesting and meaningful, deserve pride, and should be useful to society.

“When you do business, you buy at 10 yuan, and sell it at 12, you only know you make two yuan, this is very simple. It is different for a factory. How to run it? Can it run? Whether it is like you have money to buy automobile, but have not money to buy petrol? The risk was higher in plantation, in which only a few years later can you know whether it is good or not. We are engaging in the oil gas now. The business concerning energy is more complicated. It has relations with the political background, and involves international monopoly groups and the vested interests. It is different from others. “

To benefit the society, RGM builds true quality with three “benefits”.

“Now when I do anything and engage in any trade, I will consider ‘ three benefits ‘, that is benefit to government, to local people, and then to enterprise. Pursue harmonious development of people, enterprise and nature in continuous development. If only you can get benefits, and the people and government can’t, your enterprise will not last long. If what the enterprises do is useful to ordinary people and local government, you can survive for a long time and can make money. Though a lot of things are solved through the government, if you have not become one with ordinary people, it is very difficult for you to survive when getting in turmoil period. ‘ It can be said the three benefits ‘is the magic weapon that an enterprise strives for victory in commercial struggle. “Sukanto Tanoto said.

RGM’s community development plan in Indonesia is the best illustration of the power of “three benefits”.
“When the factory was founded, we considered that we should assist peasant’s production. Natural fertilizer should be used in lands there, then we raised oxen first, and the fertilizer can be utilized. Without practical investigation you cannot think out this plan. Who can expect when you want to expand an enterprise, you teach people how to raise oxen first. ” Wherever Sukanto Tanoto builds a factory, he will regard the affluences of common people as an important content of enterprise’s development.

In order to help local common people to get rich, RGM set up the training center at the community where the factory is situated to train nearby peasants free and teach them advanced production technology. At the same time multiple help plans are made and implemented, including comprehensive system of agro-farming, scheme of community plantation, support scheme for small and medium-sized enterprises, job training and educations support and help. It also undertakes the responsibility for helping to build such community infrastructure as road and bridge, electricity, water, medical treatment and culture, etc. In addition, he constructs the school building in the locality, offers the teaching material and teaching equipment, provides subsidies to rural teachers and establishes scholarship to let children of the poor family receive an education. Now more than 12000 students are benefited. Now, the successful mode of sustainable development found out by Sukanto Tanoto was extensively used by companies under command of RGM, and is implemented as its long-term development strategy mode in China.

If “three benefits” are for enterprise’s better management, Sukanto Tanoto’s unselfish participation in public service reflects the sincere heart for his repayment for the society.
He donated 3 million dollars to the Olympic Games; 30 million yuan for fighting against SARS; 14 million yuan to ” the love project of overseas Chinese “; 5 million yuan to support the development of western regions, ……Only in recent years, except the donation of nearly 20 million dollars in Indonesia and Singapore, Sukanto Tanoto donated over a hundred million yuan for supporting the social public service in China. He said:
“A successful person needs opportunities. There are a lot of wise men in the world, but they cannot succeed without opportunity. So after we succeed, we should take out some money to do something meaningful to society and repay the society. “

Sukanto Tanoto Expansion Strategy

Written by Bi Yajun of Chinese Businessman’s Strategy

To expand RGM, where are the foundation, advantages and opportunities?

After careful enumeration, analysis and test marketing, Sukanto Tanoto made the decision of making the enterprise stronger, greater and wider based on resource, and combine resources effectively. A brand-new integrative mode of chemical industry -“Forest-Pulp-Paper Integration ” was designed.

Sukanto Tanoto chose to plant fast growing trees on a large scale at a meagerly populated small town of Riau and built the related factory. In less than ten years, he built up the biggest paper pulp factory of the world and a world-class paper mill, developed a huge industrialized park, a community with a scale of 60,000 people. And the key industrial group of the RGM was established – -Asian-Pacific Resource Group.

At this time Sukanto Tanoto was under the most difficult situation in life, but accomplished the most brilliant achievement. Back then the 1997 financial storm was spreading, and Indonesia was in the center of the storm.
“The Company was faced with domestic and foreign troubles. The director in charge of the project left. I have invested all my 700 million dollars in this project worthy of more than 2 billion dollars, and the left depended on the bank loan. But the bank had no money to lend at this moment. Those who have promised and signed went back on their words completely. The society was in turmoil. From the independence of Indonesia in 1945 to the year 1997, there were only 2 presidents in these 52 years. From 1997 to 2004, there were 5 presidents in these 7 years. There was confusion too in the localities, just like the situation of China at the beginning of the 20th century, when there were separatism warlord regimes after the 1911 Revolution.”

At that time, it was very difficult to preserve strength, let alone accelerated the development.
“A factory of mine made 70 million – 80 million dollars in one year. A provincial governor and military commandant wanted to extort 5 million dollars. I resolutely refused to give. Because I have more than 30 big and small companies there, so long as the first was given, never will there be days of peace. I am such a person. If the things are within the principle, no matter how difficult, I will persevere and prop up. Later on he asked for 20% of the shares, certainly I refused. Refusing to budge for 5 years, and my factory was closed for 5 years. Without operation for five years, but the salary of staff was issued as before. You can imagine that abominable environment.”

But in the abominable environment, in the failing of numerous financial groups one after another, Sukanto Tanoto sailed against the current and made vigorous efforts to turn the tide.
“Later on I told everybody that it was a good thing. Everybody said I had gone mad. How could this be a good thing? First of all, from the global point of view, although there was the political turbulence in the country, our market is abroad. So long as product export could be guaranteed, we can get U.S. dollars. Second, with the devaluation of national currency, our cost was reduced, and the profit would be higher. So long as you become one with the masses within an area of more than 100 square kilometers, let them protect you and guarantee your normal production, there is nothing that can not be done. “

Under protection of masses, Sukanto Tanoto’s factory stood firm on troubled times. The scope of the enterprise was expanded by 2 times, and profits were increased by 4 times. At present, the paper pulp factory that RGM set up there has reached an annual production capacity of 2 million tons of paper pulp and 400,000 tons of paper in the office. After expansion the annual output of paper pulp can reach 2,300,000 tons.
After establishing this foundation, Sukanto Tanoto continued to move about freely and quickly in the field of resource with the integrated mode to realize diversified expansion. His business became larger and larger and the field involved was wider and wider.

Soon after setting up paper pulp factory and the paper mill, he marched into another trade related to tree – – Viscose rayon industry. He made an investment in Brazil, Finland and China and built up the leading integrated viscose rayon and dissolved pulp production firm in the world – Sateri International Co. After fully combination of ground resources related to planting trees, he led RGM’s road of resource utilization to the underground. The two large-scale energy companies-the Pacific Ocean Oil Gas Company and the East Asia Power Corporation were established.
With the success of Sukanto Tanoto’s series of strategic breakthrough, RGM developed rapidly into a large-scale enterprise with an asset of 6 billion dollars. It set foot in such a lot of trades as the plantation-paper, viscose rayon, palm oil processing and energy development, etc. The subordinate enterprises and companies spread all over Singapore, Indonesia, China, Philippine, Malaysia, Finland, Brazil and other places. It has become the famous comprehensive industrial group of Asia.

Waiting for chance during accumulation, RGM decides to enter China with 6 billion dollars’ investment.

The reform and opening-up of China attract businessmen in the whole world, Sukanto Tanoto, who has likened China to ” own father” is not an exception. But the time that he and RGM entered China is not long. Until 1994 there was the first sum of investment in China.

“I like following the prescribed order when doing things, and divide the order of importance and emergency. A solid foundation in Southeast Asia was laid first, including the preparation of such respects as the technology, manpower, etc. I studied the Chinese market at the same time and considered what kind of trade was competitive. Until everything is ready and the condition is ripe, will I take action. “

All strength accumulated for so long and after so careful preparation broke out. Once getting to China, Sukanto Tanoto took active actions. Enormous investment is made in paper pulp, papermaking, viscose rayon and energy trade.

In 2004, Sukanto Tanoto and RGM’s four major groups: Asian-Pacific Resource Group Asia Implant, Sateri International Co. the Pacific Oil Company declared in Beijing that in the coming 5 to 10 years, they would invest 6 billion dollars in China.

This means Sukanto Tanoto will make another RGM group in China. In answering the question that why he had so much confidence, he said: “China has more than ten hundred million people, the economy is developing continuously, and the market potential is enormous. Besides, we Chinese do things at our own country; we have more friends and feel more cordial. “

Behind the great ambition is his original view on the Chinese market: China not only needs fund, talent and technology but also natural resources, and he has central competition advantages on resources. So, Sukanto Tanoto had very clear development mode when he came to China: “Bring abundant natural resources in Southeast Asia to China for process, set up the world competitive large-scale factory and pollution-free production base, the products produced not only can supply China, but also can export to all parts of the world. Just like Chinese said, “ attack when advancing, and defend when retreating. “

According to the estimation by related departments, by 2010, because of the lack in forest reserves and the shortage of the wood pulp, China will be short of more than 20 million tons of wood pulp annually. Sukanto Tanoto was certain about the chance and determined to set up a paper pulp factory in China with an equal scale to Indonesia. Not only import will be reduced to alleviate the situation of China’s short supply of paper pulp, the wood pulp can also be exported to Japan and Korea S, and other markets of east Asia to serve China’s economic development.

For this reason, when learning the Senbo Paper Pulp Factory of Rizhao, Shandong province planned to enter into partnership with a foreign corporation to expand production, but came to a deadlock because the foreign side rose harsh conditions, Sukanto Tanoto, who wholeheartedly wanted to realize its paper pulp industry dreams in the country of ancestral home, and who had already invested to build in Suzhou the paper product processing factories and the top-grade stationary paper project at Xinhui of Guangdong, finished purchasing 90% of the stock rights of Senbo Paper Pulp Factory on August 19 , 2005 resolutely with an sincerity of ” I will agree all conditions that foreign company didn’t agree”, and the Asia Pacific Resources International Holdings Ltd. was established.

On October 18, 2005, member of the Standing Committee of the Political Bureau of the CPC Central Committee, and national chairman of CPPCC Jia Qinglin visited Asia Pacific Resources International Holdings Ltd., and has raised the hope for Sukanto Tanoto: “Make a model project in the domestic pulp & paper industry.”
Sukanto Tanoto planned to bring the productivity of Asia Pacific Resources International Holdings Ltd. from 220,000 tons and 170,000 tons separately up to 300,000 tons and 180,000 tons through technological transformation. A bleach sulphate wood pulp production line with an annual production capacity of 1 million will be built and it would become one of the world’s largest single pulp production lines.

Besides making large scale investment in the paper pulp industry, relying on the integrated energy industry’s operation mode which contains high-tier (make an investment in Indonesia to develop natural gas resource and set up a natural gas liquefaction factory), middle-tier (liquefied natural gas export and transportation), low-tier (build accepting station, natural gas power plant gas line network), Sukanto Tanoto marched into the energy market of China. Through cooperation with such strategic cooperative partners as the Chinese Petroleum, Guoxin Group of Jiangsu Province, etc. he has developed and run 3 large-scale energy projects in China.

So far, RGM’s every business abroad has already been introduced to China. The investment projects under preparation include: the pulp & paper project in Rizhao of Shandong (1,630 million dollars of gross investment, the first stage is 430 million dollars, and the second is 1,200 million dollars.) Rudong liquefied natural gas accepting station in Jiangsu (The gross investment is 720 million dollars) and project of power plant of liquefied natural gas (The gross investment is 1,080 million dollars), project of Xiamen power plant of liquefied natural gas in Fujian (The gross investment is 700 million dollars), Changshu viscose rayon project of Jiangsu (The gross investment is 200 million dollars) and the palm oil project (The gross investment is 162 million dollars) of Nanjing in Jiangsu; The projects under construction is Xinhui top-grade stationary paper project in Guangdong (with 1,980 million of gross investment, the first stage is 680 million dollars, and the second is 1,300 million dollars); Suzhou paper product processing factory (with a gross investment of 50 million dollars) and chemical fiber project of Sateri in Jiangxi (The gross investment is 215 million dollars ) have already been put into operation.

Sukanto Tanoto orientated RGM China’s goal as “building up to a Chinese trans-corporation.” He said: “The 21st century is the era of the Chinese revival of nationhood, we can participate in. It is not only a chance but also an honor. ”
During interview, numerous senior level persons of RGM got together. They expected that according to this speed, the original investment plan of 6 billion dollars of RGM China is sure to exceed greatly in 5 to 10 years, and it is hopeful to reach 10 billion dollars. Mr. Sukanto Tanoto waved and said at once after listening:
“No, don’t shout slogans now. Work more and talk less. “

Based on resource, RGM is establishing a model of sustainable development through integration.

Resources are the powerful backing of RGM all the time. To integrate and make good use of so many resources and achieve sustainable development is definitely not an easy thing. For this, Sukanto Tanoto has his unique method.
His method is: “Give full play to the competitive advantage based on resource, fully utilize the key ability of low tier industry in order to expand the integrated palm oil industry, forest-pulp-paper integration industry, integrated development of clean energy and integrated viscose rayon and dissolving pulp production. ”
In RGM, integration is ubiquitous.

In the paper pulp factory, they develop recycled economy, develop and popularize resources saving, substitution and circulated utilization technology, not only environmental protection has been accomplished but also good effect is achieved.
“In order to prevent pollution, we have adopted three biggest recovery boilers in the world, the investment of each is 250 million dollars. The three boilers can generate electricity by burning the discarded materials, and the electricity generated can meet the need of production. It probably needs 1000 degrees of electricity to make a ton of paper pulps, one degree costs 4 cents, then the production of each ton of pulp can save 40 dollars. With the output of 2 million tons every year, 80 million dollars can be saved. The total investment of 750 million dollars in these three boilers can be regained in 8 years. “

Sukanto Tanoto said: “Environmental protection is not an input, but an investment. Plan should be made carefully at the beginning. If you mend after going wrong, your loss will be more than gain. We plan in an all-round way at the beginning and solve the problems completely. In addition, we accumulate and innovate from practice. Today is better than yesterday, tomorrow will be even better, and things will get better day-by-day. ”
For the development of forest resources, the RGM takes the sustainable integrated forestry management method of planting while cutting down. So far, the RGM enjoys artificial recycled forest reserves of more than 17 million mu in Indonesia and Brazil by the way of directly owned or a joint venture. And the key factor for Sukanto Tanoto’s success in entering the Chinese energy market is: His integrated clean energy development mode agrees with China’s current energy policy and environmental protection policy.

Except the integration of the industry from high to low tiers, the overall arrangement of different departments of RGM are managed orderly by Sukanto Tanoto, and the best in each other was brought out. In the world, there are 2 other factories whose productivity is close to the paper pulp factories of RGM. But they have spent 30 years to reach this scale, but RGM only used 10 years. The reason is that it constructed by Sukanto Tanoto’s own PEC-Tech Group. From engineering design, equipment purchase, building construction, operation maintenance to marketing and logistics management, Sukanto Tanoto finished this world-class project of high quality with the cost as low as possible relying on decades of practical experience in engineering design and construction field according to the unique management and project execution pattern – -” PEC mode “.

Sukanto Tanoto performed the integration more thoroughly on the viscose rayon. Through purchasing a dissolved pulp factory that with a land area of 2.5 mu and which can produce all dissolved pulp products from ordinary standard pulp to top-grade one with special use in Brazil, a viscose rayon factory that has more than 60 years’ experience in viscose rayon production and rich research and development capability in Finland, and the setting up of the related operation of the first wholly foreign-owned viscose rayon factory of China in Jiangxi, a global development strategy of viscose rayon that integrate the world wide sources(Brazil ) , technology (Finland ) , market and production capacity (China ) is established.

The integrated, rational and high-efficient industrial arrangement not only let RGM be very rich but also let it become the model of sustainable development. When many papermaking enterprises fell into the crisis because of issue on environmental protection, the United Nations Development Programme (UNDP) and the British world news information television channel (World Television) made a special event of the Asian-Pacific resource group (APRIL) of RGM’s successful experience in pursuing sustainable development strategy in RIAU of Indonesia and the benign interactivity with the local communities and people in the TV serial programs ” developing enterprises ” which shows for the first time on CNBC European.

History of Sukanto Tanoto

Written by Bi Yajun of Chinese Businessman’s Strategy

Starting from scratch, he becomes a 20-year-old multimillionaire.
Sukanto Tanoto, who was born in Indonesia, is of the same age as new China. Maybe that’s the reason why he knows more about Chinese culture and intelligence comparing with other overseas Chinese.
Before he was born, his father Sukanto Tanoto Jinrong left his hometown Putian of Fujian Province and went to Medan of Indonesia. He opened a small shop and led a hard life by selling the accessories and petrol. Sukanto Tanoto is the eldest one at home, with 8 younger sisters and brothers. While studying until 17 years old in the local overseas Chinese’s middle school, the weak and sickly father was unable to continue managing housework due to overwork. As the eldest son, Sukanto Tanoto had no choice. He came out to work without completing his study and undertook the task of supporting the family.
Although his father had not created wealth, he left much experience in doing business to Sukanto Tanoto and led him to enter a trade that he was familiar with: Becoming a supplier of spare parts of locomotive for the oil company. At the beginning of starting the undertaking, Sukanto Tanoto had only 3 staff. Because he was diligent, inquiring and hardworking, his business expanded gradually. The single locomotive part supplier became a comprehensive management trade company. Finally, it became a contract builder to do projects for some oil companies. While making money, he has learned more knowledge in doing business and behaving himself.
In 1967, Sukanto Tanoto formally established his own company-RGM company. Its business began to change and rely mainly on contracting the petroleum project. The year 1967 was exactly an important milestone of Indonesian economic development. At that time Indonesian president Suharto has taken up the official post for two years. Just from that year Indonesia began to accept the foreign aid and introduce foreign capital in a large amount, and gradually stepped into the speedway of economic development.
Nearly each self-made person experiences the crucial moment of life and death. During project contracting, a natural gas pipeline mainly constructed by Sukanto Tanoto was in serious difficulty because of the engineer’s mistake in computation. If fail, the efforts of many years may be in vain at once. In this dilemma, Sukanto Tanoto, who had lost much money, chose to insist on. He spent a lot of money in inviting experts to participate in the project. At the same time he established confidence of staff and the owner. Success means one should not give up easily the things that he is certain about. Sukanto Tanoto finished this project and the most important thing is he gained the respect and trust of the staff and customers.
That experience still remains fresh in Sukanto Tanoto’s memory. He says with deep feeling: “There are many setbacks in the course of starting an undertaking. I am not afraid of doing wrong, but afraid of making the same mistake each time. So long as one makes a decision to face, he can find a solution and finally hold out through. ”
The global oil crisis disturbance began from 1972 let Sukanto Tanoto earn first barrel of money. At that time, global business of oil companies kept on growing. Indonesia, which was under the strategic background that President Suharto energetically developed petroleum resources, was especially so. Nearly all oil companies were in extensive enlargement. Sukanto Tanoto’s equipment and the project business increased accordingly, within a short time he earned several million dollars.
From the first sum of money that he earned under the suddenly changing economic situation, Sukanto Tanoto realized the importance of doing business according to the era and political situation. He said: “The political situation was in turmoil at that time. The regime was controlled by the army. 70% income of the country came from the foreign currency of selling petroleum. I found out about the situation in this respect and public relations during the process of doing business, learned to grasp business opportunities existed in the political situation.” At that time, he was only less than 25 years old.

Entering resources industry, the young rising star showed himself in the forest planting.

The young rich man didn’t come to a halt when he made so brilliant an achievement in such a few years, or was at a loss in front of the wealth that suddenly came. If one day, the oil company can’t offer the market and profit, the management of the company and the support of the staff would become a serious problem. Sukanto Tanoto thought about these daily and nightly.
A phenomenon aroused his attention: Logs are exported at forest trade. Some logs are exported to Japan, S. Korea, Singapore and other places. After being processed into splint, the logs are exported back to Indonesia. After this procedure the producer still can gain generous profits. Why not process the splint directly in Indonesia? If so, not only the added value for process can be kept at home to support the development of national economy, but also employment opportunities and profits are created. Why not do it?
While applying for the permission certificate, Sukanto Tanoto’s idea aroused both interest and doubt of minister of industry, who was also a lieutenant general: “A lot of people who come to take the permission certificates said they would build the factory, but they didn’t succeed in the end. You are so young, how can you succeed?” Sukanto Tanoto won support with sincerity. The minister not only let his subordinate help him to get the certificate but also ask when he could build up. Sukanto Tanoto said generally it took two years; but he would use 14 months. In fact he only spent 12 months to build up a factory with an investment of ten million U.S. dollars, and which can recruit 2,000 people. When he reported the progress, the doubting minister made an investigation first, and then gave him a pleasant surprise: “I will report to the president and let him cut the ribbon.”
On August 7th, 1975, the President came to Sukanto Tanoto’s factory with the accompany of 7 Ministers. Sukanto Tanoto’s ability wins the appreciation of the president. He recalled: “The President asked me many questions, for example: Why I enter this trade, how much does the splint cost, how much is the selling price, how much profit can be gained and how many working opportunity can be offered. He also took out a paper and let me write them down. While calculating with me, he said: ‘oh! If things are like this, Indonesia should make more splints. In the future log export should be banned to increase the chance of employment and make more foreign currency. ‘ ”
As expected, from that time, Indonesian government changed the policy of the forest trade gradually. 3 years later no more log was exported.
In 1979, Sukanto Tanoto entered the palm planting. “I did not understand the business at that time and can only plant 300 hectares in two years.” Two years later, he decided to sell the plantation. A businessman who did the automobile business planned to take over. It was this automobile trader who had no experience but dare to take over strengthened Sukanto Tanoto’s self-confidence that he could make too. He decided to retry and went to Malaysia to find the best talents to join his team. One year later, the cultivated area reached 2,000 hectares of scale.
“The most important thing of Southeast Asian Chinese is to cooperate. Only through this can they make greater undertakings and the status of Chinese can be promoted. “The reason that Sukanto Tanoto can make such great achievement of today is that he is good at cooperating with others.
By 1983, the assets of RGM had reached 100 million dollars. At this moment, Sukanto Tanoto had an optimistic view of the palm oil project. He hoped to expand it. But his capability, especially the strength was not enough. Then he decided to cooperate with Lin Shoaliang, the richest person of Indonesia at that time, who was also a foreign citizen of Chinese origin.
“I found him through with the help of some relationships. Mr. Lin asked what I wanted. I said that I had money, technology and people. Then Mr. Lin asked what I wanted. I said this would involve every aspect. If we meet trouble outside, you help to solve it. Mr. Lin promised and said, OK, OK, OK, it is all right for me. ”
In the cooperation of going halves this time, Sukanto Tanoto did the palm oil project very well and created the miracle of Indonesia’s planting. The profit rolled in too. He made more than 1 billion dollars in five or six years.
“Last year when I wished Happy New Year to Mr. Lin, he said: “Sukanto, what chances you have? Let’s Cooperate. ”
More importantly, through cooperation with Lin Shaoliang, Sukanto Tanoto observed and accumulated a lot of management style and tactics for expanding an enterprise and strengthened his resolution to expand RGM.

Successful operation created a leading enterprise within 30 years’ efforts.

Sukanto Tanoto

Written by Bi Yajun of Chinese Businessman’s Strategy – Feb 2006

He spends 39 years to develop a small shop into one of the most important comprehensive industrial groups of Asian-Pacific area and becomes a generally acknowledged “commercial talent”.
He has the most extensive paper pulp factory of the world, world-class paper mills and the largest reforestation zone project among the world forestry organizations. He is good at developing and reusing resources, especially the construction of the integrated intact industry chain under the new-type industrialized situation. He is the forerunner and practitioner of the sustainable development strategy.
He has read a lot of Chairman Mao Zedong’s books, and is greatly influenced by Mao Zedong Thought. During struggling of 39 years, he has been advancing centering on an unshakable principle: To benefit people, benefit the nation and benefit the industry.

My Principle to Do Business:
To Benefit People, Benefit the Nation and Benefit the Industry!
-An interview of Sukanto Tanoto, president of Singapore RGM International Group

In April of 2003, an overseas Chinese businessman donated 3 million dollars to Beijing BOCOG, becoming the first person among overseas Chinese, Hong Kong and Macao compatriots to donate for Olympic Games.
Later within one month, he contributed 30 million yuan to support Chinese people’s fighting against SARS. This is the largest sum of contribution from overseas Chinese that China Government received in its fighting against SARS epidemic situation.
One year later, he announced in Beijing that he would invest over 6 billion dollars totally in China in the coming 5 to 10 years, causing uproar within industry.
A large-scale transnational enterprise that had run in a low-key attitude in China for more than 10 years began to emerge in China. An overseas Chinese leading businessman who has donated a hundred million yuan totally was gradually known by the public of China.
This enterprise is Singapore RGM International Group with assets of more than 6 billion dollars. The compatriot who owns this enterprise is Mr. Sukanto Tanoto.

Sukanto Tanoto


Sukanto Tanoto is the Founder and Chairman of RGE, a global resources-based manufacturing group of companies with corporate offices in Singapore, Hong Kong, Jakarta, Beijing and Nanjing. Mr. Tanoto started his first business more than 40 years ago supplying spare parts to the oil and construction industries. An entrepreneur and visionary, Mr. Tanoto entered the plywood business in 1967. Following this success, he ventured into other resources-based industries such as oil palm, forestry, pulp and paper, and power generation.

Today, RGE is a global group with assets exceeding US$$15 billion, a workforce of 50,000 people and manufacturing operations in China, Indonesia and Brazil and sales offices worldwide. The business encompasses four key operational areas: pulp and paper (APRIL – Asia Pacific Resources International Holding Ltd and Asia Symbol), palm oil (Asian Agri and Apical), rayon and specialty pulp (Sateri International) and energy (Pacific Oil & Gas).

Mr. Tanoto strongly believes that a company can only be successful if it is a responsible corporate citizen. Guided by his principle that all business should be conducted in a manner that is good for the people, good for the country and good for the company, Mr. Tanoto ensures that each of his businesses undertakes responsible environmental and social stewardship by embracing and integrating the concept of corporate social responsibility (CSR) into its business. CSR programs include integrated farming training schemes which have changed thousands of subsistence villagers into self-sufficient and sustainable farmers. Other community development activities include small and medium enterprise programs to help establish businesses, vocational training, community fiber farms and social infrastructure support.

With a strong intellectual curiosity and a firm belief in continuous learning, Mr. Tanoto has not only continued his own education by undertaking management courses at leading business schools, such as INSEAD, Harvard and Wharton, but has also committed to providing educational assistance, in particular to rural communities.

In 1981, he and his family formed the Tanoto Foundation to help reduce poverty and advance human achievement. Working in the areas of education, health care and disaster relief, the Foundation provides scholarships to students, honorariums to teachers, builds schools, distributes equipment and books. It also provides health care in remote areas and rapid-response assistance in earthquakes and other natural calamities.

Mr. Tanoto is a member of the INSEAD International Council, the Wharton Board of Overseers, the Wharton Executive Board for Asia, and various other educational, community and industry bodies. He is a recipient of the Wharton School Dean’s Medal Award, which recognizes individuals for their contributions to the enlargement of the global economy and to the improvement of lives worldwide. Past recipients of the award include Chiefs of State, Nobel Prize winners, and Chairmen and CEOs of companies.