Indonesia Billionaires 11

http://www.forbes.com/global/2011/1205/indonesia-billionaires-11-djoko-susanto-alfamart-lestari.html
Indonesia Billionaires 11
Indonesia's Newest Billionaire
Pudji Lestari, 11.23.11, 06:00 PM EST
Forbes Asia Magazine dated December 05, 2011
An early partnership with one of Indonesia's best-known businessmen helped jump-start Djoko's own path to riches.


At age 17 Djoko Susanto started managing his parents' modest 560-foot stall inside Pasar Arjuna, a traditional market in Jakarta. The stall, called Sumber Bahagia ("source of happiness"), sold groceries at the time, but soon Djoko decided there was a bigger opportunity peddling cigarettes. Business was brisk as not only smokers but also small wholesalers and retailers became frequent customers.

His gamble on smokers paid off in a bigger way than the enterprising shopkeeper could have imagined, attracting notice from Putera Sampoerna (No. 9 on our list of Indonesia's richest), whose own company was then one of the nation's largest makers of clove and tobacco cigarettes. The two met in the early 1980s and agreed in 1985 to build 15 similar stalls in several areas of Jakarta. The venture was successful and inspired the two to open a discount supermarket store named Alfa Toko Gudang Rabat. That same year Djoko became the sales and distribution director at Sampoerna's much bigger and more established firm.

The pair opened their first Alfa Minimart (the name was later changed to Alfamart) in 1994 to appeal to Indonesia's lower- to middle-class customers in search of cheap prices and convenience. "I thought about naming it Sampoerna Mart, but I used Alfa, a known and tested brand," says Djoko.

The partnership lasted until 2005, when Sampoerna sold his tobacco business, along with its subsidiaries (including his firm's 70% stake in Alfamart), to Philip Morris International for slightly more than $5 billion.

With no interest in retail, Philip Morris gladly sold the Alfamart stake to Djoko and private equity investor Northstar. Last year Djoko bought out Northstar, leaving him with 65% of the company. It was a smart move: Shares of the thinly traded retailer have doubled in the past 12 months (and quadrupled over the past two years), catapulting him into the ranks of the world's billionaires. He makes his debut at No. 25 among Indonesia's richest, with a net worth of $1.04 billion.

Djoko, who sold the supermarket business a few years ago, is still bullish on his convenient and affordable minimarts. The sector is growing an average 15% to 20% a year in terms of sales. Alfamart, whose 5,500 stores serve more than 2 million customers daily and employ more than 57,000, is leading the transition from roadside wooden shacks selling dubious goods to modern minimarts with reliable items at prices that are the same or better. It is looking to open another 800 outlets in 2012.

"The minimarket is always accused of hampering the traditional markets. What they do is encourage the traditional market to improve their services," says Djoko.

Adapted from FORBES INDONESIA.