Hendra Adidarma is one of the country’s most successful businessmen. He is a serial entrepreneur who has built five companies over nearly four decades. In recognition of his achievements, last year he won the prestigious EY Indonesia Entrepreneur of the Year award. At 79, he is still hard at work, and is actively involved in building his Propan Raya Group Holding. He started his flagship PT Propan Raya Industrial Coating and Chemicals from scratch in 1979 (at age 42) with 10 staff and turned it into the largest wood-finishing producer in the country with a 70% market share, and it claims to be the largest in Southeast Asia in terms of wood finishing products.
Today Propan Raya produces at least 70,000 tonnes of paint every year with 15,000 outlets all over Indonesia and Southeast Asia. Adi continues to push the company forward, sending faxes to top management every morning with ideas. “This morning I sent a memo regarding boat paints. Yesterday I met a customer from Surabaya who needed a particular kind of paint for his boat,” he says in an interview at his office. For this client, they discussed what kind of wood paints could be applied on different parts of the boats. Adi then went directly to his lab to develop the paints. “For the marine industry, the paints are more competitive, so I have to know what the customer needs,” he explains.
For Adi, making paints and wood finishes is a long and deep passion. He spent 13 years studying chemistry, getting a doctorate in textile chemistry from the University of Stuttgart in Germany. “Research and development is at the heart of Propan Raya. To manufacture innovative products, we have to have a broad knowledge and be creative,” says Adi. Every year, he updates his knowledge by spending two weeks at a chemical laboratory in Germany learning about the latest developments in paint making. “Propan Raya is not merely a paint company. We offer a wood finishing system. Starting from wood filler, coloring and finally to the top coating,” says Adi.
His paint business continues to grow. Propan has three plants in Indonesia, and will have a fourth by year’s end. Outside the country, Propan has plants in Malaysia and Vietnam. For Propan, he has developed an integrated approach to paints and wood finishing. For 27 years, Propan has had a subsidiary, PT Alkindo Mitra Raya, that produces the raw material to supply the plants. Established in 1989, Alkindo makes polymers for the coating, printing ink industries and wood lacquer. Alkindo initially supplied only for Propan’s needs. Over time, Alkindo began to sell its products to third parties and now exports about 30% of its output to African and ASEAN countries, as well as to China, Germany, India, Israel, Japan, Turkey and the U.K.
Moreover, to further support production, in 1993 Adi set up PT Platindo Cipta Raya, a company that designs and makes industrial machinery, such as storage tanks and mixing equipment, used in paint production. “Many years back, I ordered a paint mixer machine from a nearby workshop. After three days, it broke. From that moment, I decided to make my own equipment by myself. It is also very expensive to import the necessary machinery,” says Adi. Initially, Platindo worked only on Propan’s production facilities. As it grew bigger, Platindo now helps outside firms as well.
The Propan group companies are all privately held by Adi and his family. Last year the group had Rp 2.3 trillion in combined sales. Based on similar firms listed in Asian emerging markets, Forbes Indonesia estimates that the group has at least 5% margins, giving it a minimum of Rp 115 billion in profits. Using 12 times earnings, the group could possibly be worth at least Rp 1.4 billion if publicly traded.