The Tale of the Conglomerates (Series 3): Petrochemical Boss Prajogo Pangestu, from Driver to Filthy Rich

JAKARTA – His name may not be as famous as the Hartono Brothers, but Prajogo Pangestu has remained one of the richest people in Indonesia over the last few years. Currently, he is listed as the third richest person across the country.

Launching the Forbes on Monday, April 26, 2021, Prajogo Pangestu has a total wealth of US$6.5 billion or equivalent to Rp94.25 trillion. Globally, he is placed in the 404th position of the richest people in the world.

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His current position is higher than the 538th position in 2020. In Indonesia, the value of his wealth is side by side with Sri Prakash Lohia in the fourth position.

In fact, Prakash has a similar business to Prajogo in the petrochemical and textile sector by building the company PT Indo-Rama Synthetics Tbk (INDR). However, Projogo succeeded in maintaining his position as the third richest person in Indonesia for three consecutive years.

Prajogo is the son of Phang Siu On, a rubber tapper. Unlike Hartono, Prajogo’s biggest source of wealth comes from the mining and petrochemical business through the two companies he owns, namely PT Barito Pacific Tbk (BRPT) and PT Chandra Asri Petrochemical Tbk (TPIA).

From Driver to Filthy Rich

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Prajogo was born and raised in Sambas City, West Kalimantan, with the real name Phang Djoem Phen. Young Prajogo was only able to study up to Junior High School (SMP). He was also working as a public transport driver at his hometown.

In the 60s, Prajogo met a Malaysian timber entrepreneur named Burhan Uray and decided to work with Burhan Uray at the PT Djajanti Group. Seven years later, Prajogo was trusted to be the General Manager of the Plywood Nusantara factory in Gresik.

However, he was reluctant to prolong his job. Prajogo decided to leave the company after one year serving as general manager at a subsidiary factory of the Djajanti Group.

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Armed with the existing experience, he ventured to borrow business funds from PT Bank Rakyat Indonesia Tbk (Bank BRI) and buy CV Pacific Lumber Coy. This company was the embryo of PT Barito Pacific Lumber.

In 1993, the company managed to become a public company after being listed on the stock exchange. In 2007, the Barito Group acquired a petrochemical company Chandra Asri and PT Tri Polyta Indonesia Tbk a year later. He is reported to have owned a number of shares in PT Bank Central Asia Tbk (BBCA) belonging to the Djarum Group.

Prajogo received the Main Service Star award from President Joko Widodo in August 2019. This award is given to national figures who have contributed to the progress, welfare and prosperity of the nation and state.

Giant Issuer

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Based on shareholder data of all local issuers above 5% released by PT Kustodian Sentral Efek Indonesia (KSEI) as of April 23, 2021, Prajogo has 66,907,265,970 shares of BRPT. This figure is equivalent to 71.64% of BRPT’s share ownership.

The majority of this share ownership made him lined up as President Commissioner of Barito Pacific. Referring to the price of BRPT’s shares at the close of trading on Monday, April 26, 2021 at the level of Rp910 per share, Prajogo’s total wealth from BRPT’s share ownership reached Rp60.89 trillion. Meanwhile, BRPT’s market capitalization was Rp84.98 trillion.

In PT Chandra Asri Petrochemical Tbk (TPIA), Prajogo personally pocketed 2,686,147,795 TPIA shares or equivalent to 15.06% ownership portion. With this score, the value is estimated at Rp27.13 trillion at TPIA’s share price at Rp10,100 per share.

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This figure does not include BRPT’s total share ownership in TPIA of 7,469,417,600 shares, or the equivalent of 41.88%. The total investment value of BRPT in this subsidiary is currently Rp75.44 trillion. While the TPIA market capitalization has touched Rp180.12 trillion.

Not only that, Prajogo is also listed as one of the main shareholders of the issuer of crude palm oil producer PT Gozco Plantations Tbk (GZCO).

Gozco Plantations was founded on October 1, 2001 and started commercial operations in 2007. Prajogo has approximately 470,418,000 shares of GZCO with a share ownership of 7.84%.

Launching RTI Business data, GZCO’s shares were stagnant at the price level of Rp50 per share. Thus, there are around Rp23.52 billion of Prajogo’s total assets deposited in the shares of the CPO company.

This wealth value is limited to Prajogo securities that have been registered with the Indonesian stock exchange authority. This obviously does not include his other unrecorded assets, including property, vehicles, cash and so on.

This article is a series of special reports that will be continued in the next issue entitled “The Tale of the Conglomerates.”

The Tale of the Conglomerates (Serial 1): Michael Bambang Hartono, from Fireworks Factory to the Richest
The Tale of the Conglomerates (Serial 2): Sri Prakash Lohia, Selling Threads to Abundant Money

Writer: Drean Muhyil Ihsan
Editor: Sukirno