Robert Budi Hartono (born 1941) is an Indonesian tobacco billionaire with a 2018 net worth of US$12.6 billion. He owns and runs the privately held Djarum, the world’s third largest maker of clove cigarettes. Djarum has reportedly recently grabbed shares from the number two cigarette firm, Sampoerna. Budi Hartono also has a stake with his brother, Michael Bambang Hartono in one of Indonesia’s biggest banks, Bank Central Asia, formerly controlled by billionaire Liem Sioe Liong. As of August 2023, according to American business magazine, Forbes, Budi Hartono’s net worth reportedly reached US$24.2 billion and he was noted as the second richest Indonesian and 61st richest person in the world.
Hartono’s fortune is derived from businesses inherited from his father and controlled through two closely held Indonesian holding companies. His most valuable asset is held through a 51% stake in PT Dwimuria Investama Andalan. His brother owns the balance.
Through the holding company he has 29% of publicly traded Bank Central. He owns 30% of telecommunications tower operator Sarana Menara Nusantara through closely held PT Sapta Adhikari Investama, according to its Feb. 8, 2023 filing. He also owns 38% of Global Digital Niaga, a Jakarta-based company operating e-commerce platform Blibli, according to its Feb. 9, 2023 filing.
The brothers also inherited Djarum, a closely held cigarette maker that discloses little public information. The analysis attributes a 50% stake to each sibling, in line with their stakes in the holding companies.
Djarum produced about 14% of the cigarettes sold in Indonesia in 2021, according to Euromonitor data. Revenue is estimated to be about $3.6 billion, based on the market share-to-revenue ratio of its closest competitor, Gudang Garam. Its valued using the average enterprise value-to-Ebitda and price-to-earnings multiple of Gudang Garam.
A liability is included to reflect the net value of Hartono’s cash investments after deducting for asset purchases. Dividends, taxes, market performance and charitable giving are also applied.
Mutiara Asmara, a spokeswoman for Djarum, declined to comment on Hartono’s net worth.
Biography
Father Oei Wie Gwan started cigarette maker Djarum from a workshop in Kudus, Central Java, Indonesia, where he mixed tobacco with a clove spice native to the country. When not promoting and selling Djarum on the streets of Kudus, Oei would be rolling the cigarettes — known as kretek for the crackling sound made by the burning scented spice — on the workshop floor.
Fire almost destroyed the company’s cigarette factory in 1963. Robert Budi Hartono and Michael Bambang Hartono took over the business after their father died that same year. They rebuilt and modernized Djarum, setting up a research and development center to create new kretek blends, including a cigarillo as well as a cherry-flavored variety. The brothers began exporting their cigarettes in 1972. Today, about 60,000 workers at their factories in Kudus manually roll Djarum’s kretek cigarettes, which are sold mostly to lower-income earners.The brothers created their first machine-made kretek, the Djarum Filter, in 1976. They introduced the machine-rolled Djarum Super, now one of the most popular brands in Indonesia, five years later. Tobacco products are the No. 3 item in Indonesian food-related household spending after processed food and rice, according to government statistics. The world’s fifth-largest tobacco market by number of cigarettes sold, Indonesia is the only nation in Asia that hasn’t signed the World Health Organization’s Framework Convention on Tobacco Control.
The brothers partnered with Farallon Capital, a San Francisco-based hedge fund, to buy 51 percent of publicly traded Bank Central Asia, Indonesia’s biggest financial services firm by market value, for about $860 million in 2002. The stake was purchased through holding vehicle Farindo Investment. Farallon sold its remaining stake in the bank to the Hartonos in 2009.The brothers also expanded into property and in 2004 won the right to redevelop Hotel Indonesia and Hotel Wisata, which were located in the same central Jakarta complex. They transformed the property into a shopping mall, offices, a luxury hotel and apartments, and called it Grand Indonesia.
Career
Starting from Mr. Oei Wie Gwan bought a small business in the field named Djarum clove gramophone. In 1951 it changed its name to Djarum. Oei began marketing cigarettes under the brand “Djarum” which turned out to be successful in the market. After a fire nearly gutted the company in 1963 (Oei died shortly afterward), Djarum back up and modernize their equipment in the factory. In 1972 Djarum began to export their product abroad. Three years later the brand Djarum Djarum Filter was introduced, the first brand to be produced by machines, followed by the brand Djarum Super, introduced in 1981.
Together with his brother, Michael Hartono, at the age of 22 Robert inherited one of the leading cigarette company today, Djarum. Djarum was previously a small business called Djarum gramophone which was later purchased by his father, Oei Wie Gwan, in 1951 and changed its name to Djarum. Robert and his brother inherited Djarum after his father died. At that time, Djarum’s factory burned down and suffered an unstable condition. But in the hands of the two Hartono brothers, Djarum could grow into giants.
In a September 2019 billionaires’ personal information, Budi Hartono and his brother Michael Hartono were reported by Forbes magazine as the richest men in Indonesia in 2019 with a combined wealth of $US 35 billion. Budi Hartono was listed by Forbes as being worth $US 18.6 billion,while in 2012 was $US 6.5 billion
Personal life
Early life
Robert Budi Hartono was born in 1941 (as Oei Hwi Tjhong) in the city of Semarang, Central Java, Dutch East Indies. and was the 2nd child of Oei Wie Gwan and Goei Tjo Nio. His brother, Michael Bambang Hartono was born in 1939.
Present life
He is married with three children and lives in Kudus, Indonesia.
Milestones
- 1951 Father Oei Wie Gwan sets up Djarum kretek workshop.
- 1963 Fire destroys most of the factory.
- 1963 Brothers take over cigarette factory when father dies.
- 1972 Starts exporting Djarum cigarettes.
- 1976 Introduces their first machine-made kretek.
- 1986 Sets up Djarum Foundation.
- 2002 Partners with Farallon to invest in Bank Central Asia.
- 2004 Wins tender to redevelop hotel complex.
- 2009 Djarum clove cigarettes banned in the U.S.
- 2010 Sarana Menara Nusantara sells shares.
