Successfully Combining Family and Professional Elements

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HIS vast experience in developing a business from zero has formed Andianto Setiabudi, CEO of PT Cipaganti Cipta Graha, into a solid businessman. The constantly fluctuating economy has also made him understand that building a company does not always go according to plan.  

Andi, as he is intimately called, first became involved in business during his high school days in Bandung, West Java, when he helped his parents develop their snack business. However, due to the family’s tight finances he did not get the opportunity to continue his studies at St. Aloysius high school but instead became fully involved in the business. “What I was most concerned about back then was that the business had to run profitably for the benefit of my family,” reminisced Andi.  

Slowly but surely, in his hands, the snack business grew in profitability and so did the production volume. “I even owned a cracker factory and rented land from a farmer on which to dry the raw material,” he said.  

He also owned several vans for the distribution of his products. To renew his fleet he sold the old trucks and replaced them with new ones. “During the selling and buying phase I learned that the transportation business was far more profitable than my cracker business,” he explained.  

In 1985, Andi decided to try his luck at dealing in secondhand vehicles. Starting with only five vehicles, the business grew rapidly. Eventually he bought a showroom on Jl. Cipaganti, Bandung, and set up his company, CV Cipaganti Motor. He appeared to be on a winning streak for a number of years and started a car rental company, and then businesses in property, heavy equipment and energy, especially coal.

However, not everything went as planned. During the heyday of his automotive business the government abruptly introduced its tight monetary policy, which caused the prices of secondhand cars to drop. Similarly, the rupiah nose-dived during the Asian financial crisis. “Prices of many items tripled, while the rental rate could not be increased by that much,” he said.  

However, the bitter experiences formed a more solid Andi. He always says that whatever the obstruction there is always a solution. One thing is strange and fortunate, he said, that during a period of trial he always finds new opportunities. “The key in such a situation is to stay focused and never give up,” emphasized Andi.  

As an example, he explained that during the tight monetary policy he switched from car sales to rentals. When the government introduced new regulations for the mining business, his company had hundreds of units of heavy equipment ready to rent out to mining companies. Andi, who was born in Banjarmasin, South Kalimantan, in 1962, then focused on plantations, which were on the rise. “Our latest activity is as a contractor and producer of coal,” he said with a smile.  

“In every step we take we always encounter some kind of problem. But, believe me when I say there is always a way out. Once we overcome a problem we will certainly grow further,” said Andi. “What moves a person is the difficulties he encounters. However, he or she has to have a positive attitude to solve the problem,” he said.  

Today the Cipaganti Group has grown large and Andi acknowledges that controlling such a large organization is becoming more complicated. Hence, he has opted for a more professional organization, while business is focused on three main lines — transportation, property and heavy equipment. He admits that the management is yet to become completely professional like other companies of this size. Andi is still the central figure in the entire group.

However, he has gradually started to hand over responsibilities to dependable professionals from within the group and recruited. “Almost all directors are professionals who have no family ties to me, as are the branch managers. But a number of relatives still supervise certain branches,” he said.  

For today’s situation, he said, this is the most suitable management arrangement as for the time being he cannot fully hand over control to pure professionals. Still, the professionals in his company have the freedom to make decisions and act on them. “So, currently it is a combination of a family and professional corporation,” he said.  

The father of two said that the development of human resources is one of the most vital keys to the success of his business. He also referred to the 1,200 strong workforce, saying it allowed for successful growth. He gives them training, both internally and externally. The training is, of course, based on the company’s vision and mission, which are elaborated during the training sessions. “The employees have to be aware of the company’s vision and mission for better coordination,” he said.  

Andi often provides direct motivation to the employees, especially those at the level of supervisor and above. “The motivation I give is not always in a formal way, but often through sms,” he said.  

For the future, he said that the company would focus on the current business lines, and while strengthening them he would also develop related businesses. For example, the Cipaganti Group is a major player in land transportation, but in the future, he said, the business may spread its wings to other sectors such as sea and air transportation.  

Andi said the Cipaganti Group could grow much faster if it received a capital injection from an investor, and with this in mind he hopes to eventually list the Cipaganti Group on the stock exchange. “I would very much like that to happen as soon as possible. Our current strategy is directed toward that target,” he explained. “The opportunities ahead are fantastic, so we only have to carry out our strategies,” he concluded. (T. Hidayat)  

The Jakarta Post, August 06, 2008

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