By S.K. Zainuddin
Plantation king Eka Tjipta Widjaja, the patriarch of the Sinar Mas Group, has replaced Budi Hartono as the richest man in the country, according to Globe Asia’s 2011 150 Richest Indonesians list.
The 88-year-old tycoon is worth $12 billion, tripling his fortune from $4 billion last year, while Budi Hartono of clove cigarette-giant Djarum was pushed to second place with a net worth of $11.5 billion.
Eka Tjipta claimed the No. 1 spot this year primarily because of Sinar Mas’s massive expansion in palm oil. Globe Asia, in it’s latest edition to come out this week, estimates that the company has over one million hectares of palm oil estates either under production or in early stages of preparation. These alone are worth $8 billion. When Eka’s property assets, banking, pulp and paper and coal mining operations are factored in, his total net worth has increased by a staggering $8 billion.
Indonesia’s rich natural resources and fast growing consumer market have been the backbone of one of the sharpest spikes in the net worth of Indonesia’s super rich since the magazine started compiling the rich list in 2007.
In the past year, record-high global commodity prices have translated into record earnings for those tycoons who have coal mines and vast palm oil plantations. Just about any businessperson of stature these days is eyeing a coal mine if they do not have one already, or are looking to expand production. Of the 21 billionaires on this year’s list, nine have built their fortunes through ownership of coal mines.
Between June 2010 and June 2011, the total net worth of Indonesia’s top 150 tycoons rose by nearly 75 percent to $107.9 billion. In addition, of the 20 richest Indonesians, 14 have made their money from coal mining or palm oil plantations, or both.
And with the Jakarta Composite Index rising 39 percent over the past 12 months, many owners of businesses listed on the Indonesia Stock Exchange (IDX) saw their net worth soar together with share prices of their companies.
Two of the new entrants to this year’s list, Samin Tan, who owns Borneo Lumbung Energi and Metal, and Agus Lasmono, majority shareholder of Indika Energy, both rose to fame and fortune by acquiring coal mines. This trend applies to many other rich-listers, who have used the new global and domestic environment to dramatically increase their wealth.
“Indonesia’s wealth is directly tied into commodities and the rise in commodity prices in the past year, driven by money printing and growing demand from emerging markets, particularly China and India, has seen a material improvement in Indonesia’s overall wealth,” said Nick Cashmore, head of securities at broker CLSA Indonesia.
With an economy growing at a robust 6 percent, Indonesia’s domestic sector has also proven favorable for entrepreneurs such as Anthony Salim of the Salim Group and William Katuari of the Wings Group, who are going head-to-head in wooing consumers with their food and household goods product lines.