TEMPO.CO, Jakarta-
Although the economy has yet to fully recover, many companies brace themselves to hold initial public offerings (IPO) in order to reap more funds. One of these companies is Saratoga Investama Sedaya, established by Sandiaga Uno and Edwin Soerjadjaya in 1998. At that time, the company managed US$3 billion. Throughout its development, Saratoga Investama managed to garner new funds amounting to US$400 million.
It was these new funds that Saratoga used to acquire companies such as Adaro Energy, Bonecom, Global Kalimantan Makmur, Iforte, and Tower Bersama Group. At the end of 2011, Saratoga partnered with International Finance Corporation to take over 51 percent stake in energy company Medco Power Indonesia. Saratoga also collaborated with Tiger Airways Singapore to acquire Mandala Airlines.
Tempo grabbed the opportunity to interview Saratoga Investama Sedaya's President Director, Sandiaga Salahudin Uno, last month. The 44-year-old man answered all questions thrown at him by reporters Gustidha Budiartie, Dewi Rina, and Retno Sulistyowati during an interview that lasted for almost an hour. Excerpts:
Can you explain the background of Saratoga Investama’s IPO and the company’s progress so far?
We are an investment company actively engaged in three main sectors including natural resources, infrastructure, as well as consumer products and services. Even if our investors pull away, we believe that Indonesia has a comparative and competitive advantages based on the rapid growth of these three sectors.
How did Saratoga begin to establish its business?
Fifteen years ago it was difficult to convince both stakeholders and the market that Indonesian companies are well-managed and can yield great dividends. Out of 10 arranged meetings, we probably had to fly to Hong Kong for one or two in order to convince [the stakeholders and the market]. Now, we have 10 meetings per week because people want to invest here.
How to convince foreign investors following the global crisis?
It is actually more difficult to convince local investors. So far, showing them our past records is enough. They see that Indonesia’s macro economy is good. However, there are still many micro challenges such as human resources, bureaucracy, and the reformation that has stunted various sectors.
Why did you choose to go public this year?
Unlike factories or commodity industries, the prospects of investment companies lie in capital and business opportunities. We see that business opportunities have grown and require substantial capital and a high level of flexibility.
We raised funds through banking networks and the capital market aimed at bonds. At one point, we had to introduce the products to the stock market. After a three-year analysis, we decided this is the right year.
Isn’t his a hot year what with the upcoming general elections?
We cannot predict the market but we predicted an opportunity. This is a challenge. We must prepare ourselves from now if we want to face Asia’s market challenges in 2015.
Many investors seem to be concerned and opted to wait and see this year.
For us, it is better that many investors are on a wait-and-see stance. It means that there are many opportunities. For us, Indonesia does not lack opportunities. We just need to be able to read the market condition in order to determine the right time to invest.
What are your strategies following the IPO?
We will continue to run our business, maintain discipline and perform an in-depth analysis every time we see an opportunity to develop the company in those three sectors. We will continue to be active and selective with our investments.
As for the coal sector that has also become a focus, has the company received any complaints from stakeholders so far?
We are still extremely optimistic despite the fact that the coal sector is going through a difficult period due to the declining price of the commodity. But the demand is still high.
What about Bank Bukopin? And what other sectors is the company targeting?
I cannot comment about Bukopin. But the banking sector is one of the sectors I mentioned as a sub-segment in the consumer product and service sector.
Has Saratoga also entered the energy sector?
We are also eyeing the renewable energy sector. Saratoga Group has shares in Medco Power (51 percent). There is another one, geothermal in East Java and mini hydros in 10 locations. As for the investment in Medco Power, we invested more than US$112 million in it.
What about the infrastructure sector?
Our future investment will be in the Cikampek-Palimanan toll road. This is Saratoga’s commitment to build and we have made commitments to the government. Since 2007 until last February, the project had encountered land issues. Many criticized it and wanted it to stop.
Thank goodness the land issue had been resolved by one hundred percent in February 2013. We have already started construction.
How much is the total value of assets managed by Saratoga?
This year, we may surpass the Rp30-trillion mark. At the moment, 70 percent of the funds we manage are derived from institutions and the remaining 30 percent comes from retail.
