Gadjah Tunggal Group trumpets property
Gadjah Tunggal Group trumpets property
HONG KONG (Reuter): Indonesian conglomerate Gadjah Tunggal Group is trumpeting the property and retail sectors as a way to capitalize on the country's growing wealth, said Jack Garrity, the group's executive vice president.
"There are two areas that we are counting on very strongly: property and retail," Garrity told Reuters in an interview.
"Indonesia has a growing per capita income and a rising middle class and we want to be well positioned to take advantage of this," he said.
Gadjah Tunggal, which means "Supreme Elephant," began as a family-owned bicycle tire manufacturing business in 1951 and now includes several listed companies involved in manufacturing, finance, natural resources, property, and retail and trading.
The company still is best known as a tire-maker. Listed company Gadjah Tunggal is the largest tire manufacturer in Indonesia and Southeast Asia and exports tires to more than 70 countries.
Other key listed companies are tire cord manufacturer Andayani Megah, cable producer Kabelmetal Indonesia and financial flagship Bank Dagang Nasional Indonesia.
With 32 percent of the domestic tire market, the company now is making a big export push. But it also is looking closer to home to develop investments in property, retail and natural resources.
"In the past, the focus was on manufacturing tires and upstream activities in polymers and chemicals, as well as in financial services," said Garrity.
"We are still paying a lot of attention to the core industries but we also see a lot of expansion in other areas."
As part of the restructuring of its property business, Gadjah Tunggal recently upgraded a minority stake in Omatreco Reality to a majority shareholding.
"In the future, we will use this as a publicly listed vehicle to develop our property business," Garrity said.
The company also recently recruited Patrick Yeoh, former president of Development Bank of Singapore and chairman and chief executive officer of DBS Land, to head up its property division, Garrity noted.
Gadjah Tunggal's property portfolio includes a considerable land bank in Jakarta, commercial office buildings, industrial estates, residential developments and resort properties. It is building a new 62-story office development in downtown Jakarta designed by noted architect I.M. Pei that will house the company's headquarters.
A hotel project also is in the works and the company is contemplating a large mixed-use commercial development that could include a convention center.
In the natural resources sector, Gadjah Tunggal has interests in shrimp farming and palmoil and it is developing other agribusinesses and expanding its mining activities.
"In Indonesia, there is abundant land, lack of typhoons, good growing weather, mineral resources and the brackish water needed for shrimp farming," Garitty said.
The company's shrimp farm operation in Southern Sumatra, the world's largest fully integrated facility at 16,000 hectares, will be listed in 1997, he said, adding that there are plans to expand the farm significantly.