Michael Bambang Hartono (born 2 October 1939) is an Indonesian billionaire heir and businessman.
Michael and his brother Robert Budi are the owners of kretek (clove cigarette) manufacturer Djarum, which they inherited from their father Oei Wie Gwan upon his death in 1963. Growing the business to a large conglomerate including Bank Central Asia, electronics, plantations and various properties, they became the richest in the country with Michael himself having a net worth in excess of $10 billion.
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 49% stake in PT Dwimuria Investama Andalan. His brother owns the balance.
Through the holding company he has 28% of publicly traded Bank Central Asia, Indonesia’s biggest bank by market capitalization, according to its Feb. 3, 2023 stock exchange filing. He owns 29% of telecommunications tower operator Sarana Menara Nusantara through closely held PT Sapta Adhikari Investama, according to a Feb. 8, 2023 filing. He also owns 37% 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 cigarette maker that discloses limited 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
Early life
Michael Hartono was born on 2 October 1939, in the town of Kudus, in Central Java.His father, Oei Wie Gwan, had purchased a small Kretek cigarette factory called Djarum Gramophon (lit: Gramophone needle) in April 1951, and renamed it to just Djarum. In 1963, however, the factory burned down and shortly thereafter Oie Wie died, leaving Michael and his younger brother Robert Budi Hartono to inherit the factory.
After completing his highschool in Kudus, Michael studied in the faculty of economics and business at Diponegoro University starting 1959, but returned to Kudus upon his father’s death.
Career
The cigarette company grew under the two brothers, making its first export in 1972 and introducing new products. Today, the cigarette brand is one of the largest in Indonesia, with a 19 percent market share in 2012. As the cigarette business continued to grow, the group began expanding to other fields, founding an electronics brand Polytron in 1975. The group also expanded into businesses like palm oil, papermaking and communication towers.
Starting their entry into the banking business through Haga Bank and Hagakita Bank, the brothers under the Mauritius-registered corporation FarIndo Investments in a consortium with Farallon Capital took over 51.15% of Bank Central Asia in 2002, defeating other bidders despite making a lower offer. While initially only holding less than 10% stake in the consortium, Djarum held a 92.18% stake in the consortium by 2006, though the Haga and Hagakita Banks were sold to Rabobank. After a Rp 3.45 trillion deal with UBS in 2010, the brothers controlled a majority of the company’s shares.
The shares were transferred to an Indonesian holding company PT Dwimuria Investama Andalan in 2016 during a tax amnesty program. As of September 2017, the company was jointly held by Michael and Robert, and possessed a 54.94% stake in BCA.
Aside from the aforementioned businesses, the Djarum group also controls several shopping malls and buildings in Jakarta, including Grand Indonesia, Hotel Indonesia and BCA Tower.
According to Forbes, Hartono has a net worth of $18.5 billion, as of September 2019, making him the 56th richest person in the world. He and his brother – who was also listed slightly under him at 69th – were named as the richest Indonesians in 2017, the 9th year in a row they were listed as such.
His company is also active in internet ventures, controlling e-commerce website Blibli.com and one of Indonesia’s largest online communities Kaskus.
Milestones
- 1951 Father Oei Wie Gwan sets up Djarum kretek factory.
- 1963 Fire destroys most of the factory.
- 1963 Brothers take over Djarum when father dies.
- 1972 Begins exporting Djarum cigarettes.
- 1981 Starts selling the machine-rolled Djarum Super.
- 1986 Sets up Djarum Foundation.
- 2004 Wins tender to redevelop hotel complex.
- 2007 Brothers become biggest shareholder of Bank Central Asia.
- 2009 Djarum clove cigarettes banned in the U.S.
- 2010 Sarana Menara Nusantara sells shares.
