Remaking Bosowa
    Category: Indonesia 50 Richest By : Ulisari Eslita Read : 76609 Date : Monday, December 07, 2015 - 07:26:20

    Courtesy of Bosowa Group

    For 70-year-old business tycoon Aksa Mahmud, these days are most essential ever in his long career. “I am preparing the third generation now,” says Aksa, founder and owner of Makassar-based Bosowa Corporindo. For Aksa, a self-made businessman who started his business from scratch 42 years back, Bosowa’s business sustainability is very important. “I hired a Hong Kong-based family business consultant for Bosowa, because I see family businesses are always grappling with the generation gap,” says Aksa.

    As a father of five with 12 grandchildren, Aksa was concerned about the third generation taking over the family business, as research has proven the old adage of shirt sleeves to shirt sleeves in three generations—only about 30% of family business survive into the second generation, 12% are still viable into the third generation, and only about 3% of all family business operate into the fourth generation and beyond.

    From childhood, Aksa embedded the importance of family unity among his children, Erwin, Sadikin, Melinda, Atira and Subhan. “I myself still can supervise the second generation directly. God knows what will happen after my grandchildren take over Bosowa, as there could be many interventions from the in-laws,” says Aksa.

    One of the ways to keep the company’s sustainability is by strengthening the relations between his children. The Aksa family holds a meeting once every three months, to talk about business and personal issues. He has also encouraged the second generation to take Bosowa public before the third generation start to get involved in the business.

    Aksa has already been out of active management for nearly a decade. He stepped down as chief executive in 2007 and handed over the business to his eldest son, Erwin Aksa, 40. In the middle of this year, Aksa’s second born, Sadikin Aksa, 38, officially took the helm of Bosowa Corporindo, while Erwin serves as the president commissioner.

    As the new chief executive, Sadikin wants to do a fundamental reorganization of Bosowa Corporindo, which is the holding company for all the group’s businesses. “The times have changed. The economy changes every five years, while a few years back, it changed every 10 years. It changes faster now and we have to adjust,” says Sadikin, in a rare interview. Sadikin’s vision is to transform Bosowa Corporindo into a global player, as his brother already brought the company from a local player in South Sulawesi to a national player. Now he wants to take the group to the next level.

    One of early results of Sadikin’s reorganization is setting up Bosowa’s businesses into clearly defined business lines. As of this year, Bosowa Corporindo has eight of them: agriculture, automotive, cement, financial services, property, energy and mining, education and sports, and finally, other investments. For now, Bosowa’s cement manufacturer, Bosowa Semen, is still the largest business, contributing about 65% of the group’s revenue. In the future, Sadikin plans to have Bosowa Semen contribute 30% to the holding company by enhancing the other business sectors.

    This year, Bosowa Semen produced 3.8 million tonnes of cement, while next year, Sadikin forecasts Bosowa Semen to produce five million tonnes, with 7.2 million tonnes of installed capacity. “We aim for Bosowa Semen to control 10% of the national cement market in the next two years,” says Sadikin, adding that Bosowa Semen now controls 8%. To reach the goal, Bosowa Semen will do some major upgrades, such as increasing its cement plant capacity in Batam, from 1.2 tonnes to 1.8 tonnes and further utilizing its plant in Banyuwangi.

    The company is now focusing on completing four cement-packing plants in eastern Indonesia to anticipate rapid construction growth in the region in the future. The plants represent Rp 400 billion of investment and are located in Pontianak, Samarinda, North Sulawesi and Kupang.

    While its cement business is still going strong, Bosowa’s automotive business is facing hard times as the economy remains in slowdown mode. Consequently, Sadikin is pushing automotive support businesses, such as spare parts for cars, car rental, and taxis under Bosowa Taxi. Led by Aksa’s youngest son, Subhan Aksa, Bosowa Taxi is the country’s third largest taxi company with 1,000 taxis, after Blue Bird and Express. It started in 1987 in Makassar and expanded to Surabaya in 1993 by acquiring a taxi company called Merpati Indah. Bosowa taxis are a common sight on the streets of Makassar.

    “Automotive was our original business,” notes Sadikin. Aksa Mahmud started his first business in 1973 under CV Moneter, an official car dealership for Japan’s Datsun in South Sulawesi with a Rp 5 million loan from BNI. A few years later, the company was appointed by Mitsubishi Motors to be its dealership for the eastern part of Indonesia and changed its name to Bosowa Berlian Motor. Until today, Bosowa distributes Mitsubishi cars and Fuso trucks.