Salim Group
Table of Contents Executive Summary 1 1. History of the Salim Group 2 1.1 Phase One: Introduction of a Conglomerate 2 1.2 Phase Two: Transition to the Second Generation 4 1.3 Phase Three: Financial Crisis and Reform 5 2. Competitive Environment 6 3. Features 7 3.1 Ownership and Organizational Structure 7 3.2 Leadership and Decision Making 9 3.3 Connections and Relationships 10 3.4 Social Capital 11 3.4.1 Public Perception Related to Corruption 12 3.4.2 Reputation as a Source of Financing 12 3.4.3 Leveraging Relationships with Western MNCs 13 4. Future Strategy 14 5. Future Challenges and Opportunities 15 5.1 Changes in the Institutional Environment 15 5.2 Succession Planning 16 5.3 Centralization of Control 17 5.4 Axis of Prosperity 18 6. Conclusion 20 Appendices 21 References: 27
Executive Summary
The Indonesian-based conglomerate Salim Group was founded by Liem Sioe Liong prior to World War Two. The Salim Group began as a small trading company and received favourable attention from Indonesia’s nationalist government. The focus of the Salim Group’s operations adapted to Indonesia’s economic policies and shifted from trading to manufacturing, and ultimately diversified into a series of unrelated sectors. Following the fall of Suharto and the 1997 Asian financial crisis, the Salim Group has continued to internationalize its portfolio with Liem’s son, Anthony Salim, as the group’s chief executive.
Currently, the Salim Group’s main holdings are in food, media, automotive, property and telecom with aggregated revenues estimated at 14 billion USD in 2012. The biggest companies in the portfolio include First Pacific Ltd., Indofood and Indomobil. The competitive landscape consists of other multinational companies and Indonesian conglomerates on a group level, and industry specific competitors in each distinct business field. Although certain elements of the Salim Group are comparable to the traditional Chinese
Executive Summary
The Indonesian-based conglomerate Salim Group was founded by Liem Sioe Liong prior to World War Two. The Salim Group began as a small trading company and received favourable attention from Indonesia’s nationalist government. The focus of the Salim Group’s operations adapted to Indonesia’s economic policies and shifted from trading to manufacturing, and ultimately diversified into a series of unrelated sectors. Following the fall of Suharto and the 1997 Asian financial crisis, the Salim Group has continued to internationalize its portfolio with Liem’s son, Anthony Salim, as the group’s chief executive.
Currently, the Salim Group’s main holdings are in food, media, automotive, property and telecom with aggregated revenues estimated at 14 billion USD in 2012. The biggest companies in the portfolio include First Pacific Ltd., Indofood and Indomobil. The competitive landscape consists of other multinational companies and Indonesian conglomerates on a group level, and industry specific competitors in each distinct business field. Although certain elements of the Salim Group are comparable to the traditional Chinese
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