TAMBANG, July 23, 2012 | 04.42
A General’s Focus-Based Business Acumen


By: Subkhan Agung Sulistyo
(Subkhan@tambang.co.id)

He wore no military attributes when entering into the glitzy meeting room at the Ritz Carlton Hotel in Jakarta, recently. He was present in a white shirt and dark-colored trousers. A company logo was seen above the pocket, with inscription of “Toba Sejahtra” on one of the sleeves. He was beaming among many other well-known faces who were present in the important meeting that afternoon.
Among thepopular figures in attendance whose faces are routinely seen on TV were Marzuki Ali, Chair of House of Representatives; Joko Widodo, An incumbent mayor of the city of Solo who is currently in the running for the city of Jakarta’s leadership; and Aziz Armand, a mining executive who is the Director of Finance at PT Indika Energi.
“I am invited by Bang (Brother) Luhut. As a friend I would not want to miss the chance to attend to his invitation. As an envoy, I would want to see as many people as possible buying this coal company’s shares. This is a very good company,” said Marzuki Alie. Meanwhile Jokowi, the nickname of Joko Widodo, said that he was there to ‘just look around’. “I’m here as invitee,” he said.
The host of the all important event was (Ret.) General Luhut Binsar Pandjaitan. The 65 years-old gentleman was born in Simargala, Huta Namora, Toba Samosir Regency in North Sumatera. At that moment, the General was not providing any lectures on the military, the field where he made his nameat. He stood before his guests to give explanation on the company that he had established and developed, namely PT Toba Bara Sejahtra (hereinafter referred to as TOBA), where he assumes the position of President Commissioner. The company is planned to be going public soon.
PT. Toba Bara Sejahtra is one of the subsidiary companies owned by General Pandjaitan, established on 6 August 2004. In merely eight years’ time, the company has shown a meteoric rise in its performance. The company whose core business is in coal mining has successfully expanded its business through the establishment of other subsidiary companies dealing with a variety of fields.In a short time, TOBA has entered into some business fields as varied as oil and gas, private electricity power plants, plantation and forestry.
According to the General, he currently owns as many as 15 companies as a result of TOBA’s business expansion. However, at the moment it is only TOBA which is prepared for public offering. The remaining companies are currently in some preparation stages (see article: “The Ever Blossoming Toba Sejahtra”).
At the initial public offering event it was planned to be released as many as 317,966,500 shares, or approximately 15 percent of the issued and fully-paid capital. The nominal value was at 200 rupiahsper share, with the offering price of 1,850 to 2,400 rupiahs per share.
The public offering took place on 27 – 29 June 2012. The company’s shares were registered at the Indonesia Stock Exchange (BEI in its Indonesian abbreviation) on 5 July 2012. In order to further announce the plan, the company had performed a roadshow in several cities, namely Jakarta, Medan, Balikpapan, as well as in Singapore and Hongkong.
One of the busiest persons during the preparation of the company’s IPO is Pandu Putra Sjahrir. The Boston-bornexecutive is the son of the late economist Dr. Sjahrir and his wife, Kartini Sjahrir, currently appointed as Indonesia’s Ambassador to Argentina and happens to be General Pandjaitan’s sister. The younger Sjahrir is a graduate of Chicago University and he earned his master’s degree from Stanford University, CA.
Prior to his taking office at TOBA, he was an investment professional at Matlin Patterson, a global investment agency in New York. He continued as an executive at the investment consultancy agency Byun & Co., and then at the financial corporation Lehman Brothers, before joining TOBA three years ago.
Mr. Sjahrir shared to TAMBANG Magazine the story of his arrival at TOBA. He claimed that he has never received any special treatments, and similar to the treatment received by others in the company, he has sometimes been subjected to the critical views of the company’s owner, who happens to be his own uncle.
“Bapak (the reference to General Pandjaitan within the company) is never discriminating, everyone is equal in his eyes. We are all here trained like Kopassus (Indonesian Army Special Forces), with high discipline and responsibility in running the company,” he stated.
As part of the discipline, for instance, everyday at 06:00 in the morning and 07:00 in the evening, the General would ring his staff members for daily updates, particularly the development of specific tasks being given. “We always have internal meetings on Monday and Friday. Just as in the military, we always excercise discipline in every single task. The same goes when Bapak is on the mining site. He brings in his military firmness: very disciplined in all aspects,” said Mr. Sjahrir.
However, Gen. Pandjaitan is also said to be a listener of inputs from his staff. “He always affirms that not all of the owner’s words must be deliberately realized,” he added. The General has always looked for inputs from his staff. “Bapak always gives opportunity to his employees to provide inputs and take them into consideration in every decision he makes. He always says that it is important to consider views from others,”.
The company has initially planned to hold the IPO in December 2011. Due to the then market situation which was not deemed conducive for investment, the plan was postponed to June 2012. According to General Pandjaitan, his company is financially in a really good shape. “My company is very healthy: we currently do not have debts,” he said.
The company has appointedPT Mandiri Sekuritas, PT Morgan Stanley Asia Indonesia, and PT CLSA Indonesia as guarantors. It is expected that 15% of the gain from the IPO will be used to settle the company’sobligation payable to BNP Paribas.Another 50% will be used to fund the company’s mining activities, and the remaining 35% is planned to be used for acquisition of mining concessions or forworking capital and exploration purposes.

At the outset, Gen. Pandjaitan knew that his business acumen would always be questioned. However, that was not getting in his way when he decided to become a businessman in the mining sector. The former Commander of the Anti Terror Detachment – 81 of the Kopassus laid his choice to focus on the fields of energy, agriculture and oil and gas.
“I want to focus on the fields that I am having some knowledges of. Just as in the military, if we want to attack, we must carefully choose a focus as the target point so that the army will move in harmony and easily support each other. If the very first line fails, there will be next in line supporting from behind. Prospecting on too many target points at once will only result in the difficulty of concentrating your strengths. I guess thanks to my experience with the Kopassus, I am very much trained to focus (on targets),” said Gen. Pandjaitan.
The focus-based strategy has so far been showing some fruitition. In 2011, the company produced a total of 5.22 million tons of coal with a net profit of 1.04 trillion rupiahs, a double figure of that of the year 2010 which was recorded at 518.76 billion rupiahs. The company’s concession is as big as 7,087 hectares in Kutai Kartanegara, East Kalimantan. He expected that in 2012 his company could reach a total production of 7.6 million tons. So far his company has utilized only 52 percent of the total concession area for exploitation.
From the huge revenue, Gen. Pandjaitan stated that he has always paid the taxes appropriately. He admitted that there were offers to manipulate some numbers so that he would have to pay less taxes. “I simply refused it. I think I will not become less richer if I pay taxes accordingly, which falls at hundreds of billion (rupiahs) annually,” affirmed the General to our reporters.
The former Trade and Industry Minister during the Abdurahman Wahid presidency then shared with us on his principles that pertain to taxes in his broad and cozy office at the Wisma Bakrie II, Jalan Rasuna Said, Jakarta. He took the seat at the end of a meeting table, just in front of a white board. That afternoon, he received some important guests. Some of them were known as formely holders of certain key positions in the country.
On the table, in his right hand side there was Dr. Djusman Sjafii Djamal, the aero-technical expert and former Transportation Minister in the Indonesia Unite cabinet part I. He currently holds several positions, among other as a commissioner for the air transportation company, Mandala Air. Meanwhile Profesor Kusmayanto Kadiman, former rector of Bandung Institute of Technology (ITB) and former Minister for Research and Technology, was seated on the General’s left hand side. Further to their sides, there were some former military figures namely former Chief of Staff of the Indonesian Military (ret.) Lt. Gen. Suaidi Marasabessy, former Vice-Chair of TNI (ret.) Gen. Fachrul Razi, and former Head of Indonesia Intelligence, (ret.) Gen. Syamsir Siregar.
On the sidetalk, (Ret.) Gen. Fachrul Razi shared with us that General Pandjaitan has been known as a nationalist. He shared that General Pandjaitan was once confronted by an Australian partner of his who pointed at some human rights record in Indonesia. His response then was a firm one, pointing back at the partner’s country’s own record with the Aborigines. The partner later on hurriedly apologized to the General.

General Pandjaitan established TOBA when he was 58 years old. Seen as quite a late age to start up a business. As a comparison, he was older than another former military man transformed into as a successful businessman, namely (Ret.) Colonel Ahmad Hamami, who became known when in 1971 at the age of 40 year old with PT Tiara Marga Trakindo, the supplier of Caterpillar heavy machines. General Pandjaitan was however younger than the late Colonel Sanders who started his Kentucky Fried Chicken empire at the ripe age of 67 years old.
Nevertheless, according to General Pandjaitan at his age failure should not have to happen anymore. Therefore Extra cautious measures are therefore very necessary in running the business. Aside of self reliance, he also have in his side credible persons for inputs and advices (see article: “Being Famous Is Not Enough).

Herman Afif Kusumo, the Chair of the Indonesian Mining Society (MPI in its Indonesian abbreviation) informed us that he has befriended General Pandjaitan since Senior High era. The friendship was abruptly halted upon graduation from school until they were in contact again when Mr. Pandjaitan was a Liutenant Colonel at the Kopassus.
“He is a dynamic and expressive gentlemen, quite blunt in expressing his opinion. He is also quick thinking, smart, outgoing and having a strong will to learn. He’s a very smart as a military man,” stated Mr. Kusumo.
Both Mr. Kusumo and General Pandjaitan have shared the same passion in skydiving. The two gentlemen were once actively involved together in the national organization for the sport. “He was actively involved in many organizational activities, until he became involved in the business, including the mining sector. He is much luckier than me who actually came earlier into the sector,” explained Mr. Kusumo between his laughter.
He added that the General’s decision to become actively involved in the country’s mining business was a good one, considering the huge opportunity on hand. “I guess his military background has provided him with the ability to take quick decisions and to act accordingly when he chose to come to the mining business,” added Mr. Kusumo.
Another opinion was given by Lalu Mara, spokesman of the Bakrie Group of Business. He informed that he has known General Pandjaitan since he was a captain. “Pak Ical (A reference to businessman turns politician Aburizal Bakrie) has always regarded him as smart, firm, yet friendly,” he said.
When asked whether there is a backing from Aburizal Bakrie to General Luhut Pandjaitan when the latter was about to come into the coal mining business, Mr. Mara stated that considering the intimate acquaintance between the two, it has become really normal to provide help to each other. “That’s part of the friendship,” affirmed Mr. Mara.
The friendship is indeed necessary, including in business.