Jakarta Globe | Insight

Lippo Founder Shares Insight in Group’s DNA

Jakarta. About 23 kilometer west of the congested capital city of Jakarta, “satellite city” Lippo Village offers a stark contrast with its orderly streets and well-planned, modern buildings.

Previously known as Lippo Karawaci, the township in Karawaci, Banten, is one of Lippo Group’s flagship “one-stop living” projects, providing a wide range of services from housing to hospitals, malls and the prestigious Pelita Harapan University.

Lippo Group’s services meanwhile literally run from cradle to grave, with investment in health care and hospitals, real estates, department stores, retail stores, financial services, telecommunications, hospitality, news media, IT services and memorial parks and funeral homes.

The Jakarta Globe recently had the opportunity to interview Mochtar Riady, the group’s founder and chairman, at a building called the Mochtar Riady Institute for Nanotechnology where the veteran businessman detailed the group’s DNA, vision and mission.

Cradle to Grave Services

“Lippo Group’s businesses, in principle, are in the service sector. We don’t touch the [manufacturing] industry. We focus on four different categories in this sector — land resource development, financial development, telecommunication infrastructure and digital technology,” Mochtar said.

Mochtar is ranked 13th in GlobeAsia’s 2017 Rich List with an estimated net worth of $2.1 billion from his dealings with Lippo Group. The renowned businessman has experiences in various sectors throughout his career, though he spent most of it in banking where he worked for a total of 47 years.

(JG Photo/Yudhi Sukma Wijaya)

The tycoon was dubbed “the magic man of bank marketing” in 1987 when he managed to boost the assets of minor lender Bank Perniagaan Indonesia by 1,500 percent.

Before that, his “magic marketing” hands were also one of the major factors behind Bank Central Asia’s (BCA) boom in assets which began in the mid-1970s.

At BCA, Mochtar became the right hand man of tycoon Liem Sioe Liong, or Sudono Salim, one of the richest men in Indonesia and a close friend of strongman ruler President Suharto.

After he left BCA in 1990, Mochtar established his own Lippo Bank, which grew quickly into a medium-sized lender.

The group’s businesses were not spared by the 1997-1998 Asian financial crisis, during which the Riady family was forced to sell their majority stake in Lippo Bank in order to save it.

Since then, the conglomerate has been turning its attention more and more to property development. Its Indonesia-listed Lippo Karawaci has had great success selling the novel concept of taking care of customers at every stage of life: building hospitals, schools, universities, high-end housing complexes, retail stores and the San Diego Hills memorial park and funeral homes in Cikarang, West Java.

“We have one business philosophy for all of our businesses, they must prioritize the ‘social aspects.’ We have to be able to give benefits to the greater community. We can’t just talk about making profits and not benefit the public,” said Mochtar, whose Lippo Group earlier this year introduced Meikarta, a 500-hectare state-of-the-art megacity located in Cikarang, West Java, 34 kilometers to the east of Jakarta.

Central Park in Meikarta, Cikarang, Bekasi. (Photo courtesy of Meikarta)

Meikarta is managed by Lippo Group’s urban developer arm Lippo Cikarang that controls a 3,000-hectare stretch of land where hundreds of light manufacturing companies have their workshops and factories.

The Lippo Cikarang township is surrounded by various industrial zones where millions of motorcycles, cars, fridges and televisions are produced every year.

Lippo Group will pour a total of Rp 278 trillion into the Meikarta mega project to set a new standard of living in a modern city and redefine urban life in Southeast Asia.

The new satellite city is set to accommodate 1 million people and will help ease the country’s staggering housing backlog of 11.4 million units.

Serving Not Only the Rich

The sharp-thinking 88-year-old illustrated Lippo Group’s principle of benefiting society with their decision to enter healthcare through Siloam International Hospitals. The private hospital emphasizes that it treats all patients, especially those covered by the government’s universal health care insurance, BPJS Kesehatan.

“There [at Siloam], we show that we don’t only serve serve the rich. We also provide services for those less fortunate,” he said.

The Jakarta-listed hospital operator has opened 26 hospitals and 16 clinics in 19 cities across Indonesia. It has more than 5,300 beds available for in-patients and is supported by more than 2,400 specialists and general practitioners and over 8,600 nurses and supporting staff.

The company is a repeat winner of the “Frost & Sullivan, Indonesia’s Health Care Service Provider of the Year.”

Siloam treats all patients, especially those covered by the government’s universal health care insurance, BPJS Kesehatan. (Investor Daily Photo/Emral)

Nanotechnology

The veteran businessman’s latest obsession is the esoteric-sounding “nanotechnology.” The Mochtar Riady Institute for Nanotechnology is a non-profit organization that runs a laboratory and a research center to improve medical science’s understanding and control of cancer cells using nanotechnology — a promising new technological breakthrough.

“Nanotechnology can be applied to life science, or material science. It can also be applied to management science,” Mochtar said.

“Everything starts from the smallest part. In the human body, life starts at the level of cells and the DNA. Now we have available a technology that can measure the smallest material not visible to the eyes, material that can only be measured in nanometer. That’s nanotechnology. The same principle can be applied in the management of a company. To create a healthy company, we have to understand each of its smallest parts,” he said.

Singular Vision

(GA Photo/Suhadi)

Though Mochtar now increasingly trusts the group’s leadership in the hands of his heirs, his singular vision remains apparent in many of the conglomerate’s billion-dollar business expansions, not just in Indonesia but also in Asia.

Just last month, the group agreed to a $1 billion deal with state-owned Chinese conglomerate China Merchant Group to build a range of health facilities in the world’s second-largest economy.

The deal is part of Lippo’s plan to expand its hospital business in Asia. Lippo now has one hospital and 10 clinics in China, 12 hospitals in Japan, four hospitals in Myanmar and a total of 100 clinics in Singapore and Vietnam.

The group has also built up a major presence in Hong Kong, China and Singapore.

With its expertise in technology and media services, the conglomerate is putting hundreds of million dollars into Mataharimall.com to try to dominate e-commerce in Indonesia.

In concert with its venture into e-commerce, Lippo also has OVO, its own digital payment service, standing ready for a more digitalized world when people will use less cash and rely more on e-money.

Meanwhile, its retailers Hypermart and Matahari Department Store, Cinemaxx theater chain, Maxx Coffee shops and many more of its businesses also continue to spread wings all over the country.

As Mochtar himself repeatedly said, Lippo Group’s core value is service. That is why it will continue to evolve and innovate their businesses so long as they also give benefits to the public.

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