Sudhamek turns peanuts into gold<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Like King Midas, businessman Sudhamek Agung Waspodo Sunjoto has
\nturned the humdrum business of peanut selling in this country
\ninto a lucrative industry worth trillions of rupiah annually.<\/p>\n
As the chief executive officer (CEO) of the family-run
\nGarudafood Group, Sudhamek has succeeded in expanding the group
\nsuch that it controls about 70 percent of the country's peanut
\nsnack industry, and has expanded its businesses abroad.<\/p>\n
Last year, Garudafood had consolidated sales revenue of about
\nRp 1.4 trillion (US$155 million), with a workforce totaling some
\n15,600 people.<\/p>\n
Driven by his creativity, determination, hard work and, more
\nimportantly, an obligation to keep the family business going,
\nSudhamek has taken the peanut business to a higher level.<\/p>\n
"Peanuts are not just a lowly commodity sold only on carts by
\nmobile street vendors, as they were seen 10 years ago. They are
\nnow sold as a snack at supermarkets in a variety of types and
\nflavors," said Sudhamek in an interview with The Jakarta Post.<\/p>\n
He decided to become an entrepreneur in the peanut business
\nafter working full-time in the family-owned company in 1994.<\/p>\n
The decision was made after Sudhamek gained valuable knowledge
\nof how to run a company from publicly listed cigarette producer
\nPT Gudang Garam -- where he worked from 1983 to 1992 -- and from
\nthe Djuhar Group -- from 1992 to 1994.<\/p>\n
"I have decided to help restore my family's business, which
\nhas been developed with the toil and sweat of my family. That is
\nwhy I am very prudent in managing Garudafood and don't want to
\nlose it," said Sudhamek.<\/p>\n
Garudafood started in 1979 with a small, family-run tapioca
\nproducer PT Tudung Putrajaya in Pati, Central Java.<\/p>\n
In 1987, due to the decline in its tapioca business, the firm
\ndecided to diversify by producing roasted peanut snacks under the
\nbrand name Kacang Garing Garuda, known later as Kacang Garuda.<\/p>\n
"Our failure in the tapioca business gave us a valuable
\nlesson. Leaders will face grave danger if they are not sensitive
\nabout the market and able to anticipate future changes and
\nopportunities," said Sudhamek, the youngest of 11 children in his
\nfamily.<\/p>\n
However, the growth of the new business remained slow at that
\nperiod because local consumers were still unaccustomed to buying
\nprocessed peanuts, preferring to buy them boiled from street
\nvendors instead.<\/p>\n
Sudhamek started to change perceptions about peanut
\nconsumption in 1994 by improving the distribution of the product
\nin a bid to ensure its availability on the market and create
\nproduct awareness for consumers.<\/p>\n
"The first step I took after becoming fully involved in the
\nfamily business was to improve the distribution chain from
\nscratch because none of the well-known distributors was willing
\nto accept our products as we were a new player," said Sudhamek.<\/p>\n
After traveling from one distributor to another in Greater
\nJakarta, only one in Bekasi agreed to work with Sudhamek.
\nEventually, more distributors and agencies agreed to cooperate
\nafter seeing the company's outstanding sales record in the area.<\/p>\n
Apart from distribution, Sudhamek also faced difficulties in
\nmarketing the products because very few media outlets were
\nwilling to advertise peanuts, even though Sudhamek was willing to
\npay higher rates.<\/p>\n
"I remember that there was a private television station in the
\nmid-1990s that refused our proposal to sponsor one of their
\nprograms because they were afraid that the image of the program
\ncould be tainted by association with peanuts," said Sudhamek.<\/p>\n
"We are a nation with an inferiority complex, and our own
\npeople often underestimate our own products in favor of those
\nfrom outside. If that is the case, we will never come up with
\nproduct creativity," he said.<\/p>\n
However, the obstacles have not discouraged Sudhamek from his
\nefforts, as he offered a joint-venture scheme to the distributors
\nby buying some of their stake. He formed PT Sinar Niaga Sejahtera
\nin 1994 to deal specifically with distribution.<\/p>\n
With the distribution sufficiently under control, Garudafood
\nhad more ability to control the sale of its products and focus on
\nbuilding its brand image.<\/p>\n
The group then set up PT Garudafood Putra Putri Jaya in 1995
\nto focus on making coated peanuts, and plantation firm PT Bumi
\nMekar Tani a year later, in order to secure the raw material
\nsupplies for the peanut plants.<\/p>\n
With all of the group's peanut businesses in place, Sudhamek
\nthen expanded his operation by setting up PT Garudafood Jaya in
\n1997 for producing biscuits, and PT Triteguh Manunggal Sejati to
\nproduce jelly in 1998.<\/p>\n
In a bid to create efficiency in his business operation,
\nSudhamek later merged Tudung Putrajaya and Garudafood Jaya into
\nGarudafood Putra Putri Jaya.<\/p>\n
At present, Garudafood products are sold in 22 countries,
\nincluding China, Vietnam and South Africa, with a possibility of
\nsetting up plants in those three countries later this year or
\nnext year.<\/p>\n
With all of it in place, Sudhamek is planning to sell a
\nproportion of the company's shares via an initial public offering
\nin 2007 or 2008 in a bid to improve the company's performance and
\nraise funds for expansion.<\/p>\n
It is due to his strong efforts in developing the country's
\npeanut industry with creativity and determination that Ernst &
\nYoung granted Sudhamek an Entrepreneur of the Year Award last
\nyear.<\/p>\n
"Nothing in this world is impossible. Anything is possible. To
\nbecome a great entrepreneur, you just have to be able to look
\ninto the future to seek new opportunities," said Sudhamek, who is
\nalso chairman of the Indonesian Buddhist Society Union (MBI).<\/p>",
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