How Indonesia's Hartono brothers turned a family business into a $47B global empire

The family is the 17th richest globally and one of two from Southeast Asia featured in Bloomberg's ranking of the 25 wealthiest families last week.

Michael, 85, and Robert, 83, have also been Indonesia’s richest billionaires for over a decade, according to Forbes magazine.

Billionaire tobacco tycoon Michael Bambang Hartono speaks at a press conference at the Jakarta International Expo in Jakarta on Aug. 22, 2018. Photo by AFP

Their fortune grew by $2.3 billion this year, thanks to rising shares of Bank Central Asia (BCA), where they are the largest shareholders.

BCA, Indonesia’s biggest bank, generated revenues of 99.7 trillion rupiah (US$6.5 billion) last year and reported impressive loan growth during the nine months ending in September.

While BCA is currently their primary source of wealth, the Hartonos’ fortune traces its origins to their late father Oei Wie Gwan's kretek cigarette manufacturer, Djarum.

Oei set up Djarum's first kretek workshop in Indonesia’s Central Java province in 1951, nine months after acquiring the brand, according to the company’s website.

Djarum, named after the needle of a gramophone, started as a modest operation with only 10 workers as the production process was simple and required minimal equipment.

Oei would roll kretek on the workshop floor himself when he was not out promoting and selling Djarum products on the streets.

The brothers took over the business following their father’s passing in 1963.

Though the local market for kretek, a popular product among low-income workers in Indonesia, was vast, the brothers chose to export their products to tobacco retailers worldwide, with top markets including the U.K. and Australia, The Business Times reported.

The duo’s fortune ballooned over the years as Djarum diversified into various sectors, including electronics, banking, and real estate.

In 1975, they founded Polytron, a widely popular brand in Indonesia known for its consumer electronics.

When the Asian financial crisis severely impacted Indonesia in 1997-1998, the brothers swiftly acted to expand their investments, joining a consortium that bought BCA. They spent 5.3 trillion rupiah to acquire a majority stake of 51% in the bank.

The Hartonos are also influential figures in the country's real estate market with a portfolio of prime real estate in Jakarta, including Grand Indonesia, one of the capital city’s largest malls.

They established venture capital firm GDP Venture in 2010 with an initial funding of around $100 million. The firm has been pivotal in driving digital innovation across the Djarum Group’s portfolio. It secured a majority stake in Tiket.com, a leading Indonesian online travel agency, in 2017.

The siblings expanded into the online retail sector with e-commerce giant Blibli. Its parent company, Global Digital Niaga, was listed on the Indonesia Stock Exchange in 2022, raising 8 trillion rupiah in the country's second-largest initial public offering that year.

The brothers have also contributed to society through their Djarum Foundation, which supports a range of causes, including sports, the environment, education, culture, and social initiatives, according to Tattler Asia.

The non-profit, established in 1986, helps discover talented badminton players across Indonesia, many of whom have gone on to compete in the Olympics and tournaments like the Thomas Cup.

Outside of business, Robert is reportedly modest and prefers to keep a low profile, rarely making public appearances or granting interviews.

During Bank Indonesia’s annual banker meeting in 2013, he told The Jakarta Post that he dislikes golf, a sport often linked to the wealthy and corrupt officials, preferring instead to stay fit by using the treadmill.

He attended the event without a secretary, assistant, or bodyguard, and carried an early-model Blackberry and wore basic, locally-made shoes.

When asked about the key to success, Robert stressed the importance of hard work and, perhaps most essential, maintaining trust.

"Never break someone’s trust. Once you do, nobody wants to do business with you," he said.

Michael, on the other hand, is more often in the media spotlight than his younger brother.

He represented Indonesia at the 2018 Asian Games (Asiad) in bridge and helped his team secure a bronze medal in the Supermixed team event, making him the oldest Indonesian to win an Asian Games medal, as reported by AFP.

He has been playing bridge since the age of six and enjoys the challenge the card game presents. However, he admitted that it is not his top priority and that he has other hobbies, such as music and tai chi, a Chinese martial art.

"Number one priority is of course family. Number two is business," he said.

As for his view on doing business, the Indonesian tycoon likens it to the game of bridge.

"First you get the data, the information. You analyze the information, and then you make a decision. So business, real life and bridge are the same. Decision-making is the same," he explained.

"You must be coordinated, you must be careful, there are things you don't expect. You must know what's possible, yet sometimes impossible become possible."