Billionaire The Ning King Emerges on Indonesian Property

Not many finance professionals who cover Indonesia’s biggest property companies have heard of The Ning King, the 82-year-old founder of closely held Indonesian conglomerate Argo Manunggal Group.

The -- pronounced Tay -- owns half of PT Alam Sutera Realty (ASRI), which developed for almost two decades a town west of Jakarta comprised of 30 residential clusters, each with as many as 500 houses. The company’s shares have doubled since October.

He also owns 64 percent of PT Bekasi Fajar Industrial Estate (BEST), which controls the largest industrial land bank among its publicly traded peers in Indonesia. Bekasi Fajar has partnered with Japanese companies to develop industrial parks and is up 37 percent year-to-date.

The surging stocks have made The a billionaire. He has amassed a fortune of at least $1.8 billion, according to the Bloomberg Billionaires Index, and has never appeared on an international wealth ranking.

“I’m sorry, I don’t talk much,” he said, speaking Bahasa, in a 40-minute interview at his headquarters in Jakarta’s central business district. He confirmed his publicly traded holdings and declined to comment on his net worth. “I just do my work.”

The billionaire, who also controls interests in textiles, metals, poultry and insurance, has staged a comeback since the Asian financial crisis forced him to reorganize his textile business’s debt and close a bank that he once controlled.

Photographer: Dimas Ardian/Bloomberg

The Ning King, chairman of Argo Manunggal Group, speaks during an interview at his office in Jakarta. Close

The Ning King, chairman of Argo Manunggal Group, speaks during an interview at his office in Jakarta.

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Photographer: Dimas Ardian/Bloomberg

The Ning King, chairman of Argo Manunggal Group, speaks during an interview at his office in Jakarta.

Indonesia’s Economy

His businesses have benefited as Southeast Asia’s largest economy grew more than 6 percent for 10 straight quarters, boosted by record-low interest rates and foreign investment. Property prices at Alam Sutera, the first town The developed, have increased more than fivefold since 2008, Jakarta-based PT Indo Premier Securities said in a report on Feb. 25. Prices of industrial land in the capital city have more than doubled since late 2010, PT Kim Eng Securities said in a report on Jan. 22.

“He is very low profile,” said Soni Wibowo, a director at Jakarta-based PT Bahana TCW Investment Management, which manages $2.3 billion in assets. “Nobody talks about him anymore. Now, people are talking more about Alam Sutera and Bekasi Fajar.”

Argo Manunggal, which controls more than 30 companies, holds its stakes in the two property developers through holding companies. PT Tangerang Fajar Industrial Estate, PT Manunggal Prime Development and PT Argo Manungggal Land Development are among the biggest shareholders of Alam Sutera, according to its 2012 annual report.

Source: PT Alam Sutera Realty

A residential cluster stands around a lake in the Alam Sutera development in Serpong, Tangerang, Indonesia. Close

A residential cluster stands around a lake in the Alam Sutera development in Serpong,... Read More

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Source: PT Alam Sutera Realty

A residential cluster stands around a lake in the Alam Sutera development in Serpong, Tangerang, Indonesia.

The family-owned conglomerate owns its stake in Bekasi Fajar through Argo Manunggal Land Development, according to the industrial property builder’s latest annual report.

Start in Textiles

The was born in Bandung, in Indonesia’s West Java province in 1931, more than a decade after his father emigrated from China’s Fujian province. At age 17, The moved to Jakarta, where his father opened a shop selling textiles.

GRAPHIC: Bloomberg Visual Data

GRAPHIC: Bloomberg Visual Data

After learning the business from his father, The set up his first textile factory in Salatiga, in the country’s Central Java province, in 1961. He added more factories in Java, handling the entire textile production chain, from yarn to finished fabric for clothing, sleeping bags and tents. In 1977, The set up PT Argo Pantes (ARGO), which makes yarn and fabric from cotton and cotton-polyester, and listed it in Indonesia 14 years later.

The expanded into real estate, industrial construction, steelmaking, insurance, galvanized zinc manufacturing and poultry, he said, declining to provide details on how he acquired those assets or the financial performance of his closely held companies. He said the conglomerate employs about 25,000 people in the world’s fourth-most populous nation.

Photographer: Dimas Ardian/Bloomberg

The Ning King, chairman of Argo Manunggal Group. Close

The Ning King, chairman of Argo Manunggal Group.

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Photographer: Dimas Ardian/Bloomberg

The Ning King, chairman of Argo Manunggal Group.

Financial Crisis

In December 1997, when the financial turmoil had spread south from debt-ridden Thailand, then-Indonesian president Suharto met business leaders in Jakarta, urging them to join government efforts to overcome the country’s economic crisis. The was one of three Indonesian businessmen who led a task force set up to create better coordination between the government and private sector, the Associated Press reported then.

The efforts failed to stem the Indonesian rupiah’s 85 percent plunge against the dollar from July 1997 to June 1998. Suharto, who ruled Indonesia for three decades, was forced to step down in 1998 under popular pressure for reform.

Loaded with debt borrowed in U.S. dollars, hundreds of Indonesian companies, including more than a dozen banks, became insolvent. The was a shareholder of Bank Danahutama, which was closed by the government in 1999. He was one of the country’s bank owners who received a combined 144.5 trillion rupiah ($14.8 billion) from the central bank to help their institutions stay afloat during the crisis, the Jakarta Post reported in 2004.

Debt-Free Status

In 2004, the Indonesian Bank Restructuring Agency -- which had the mandate to revive the nation’s banks in the aftermath of the crisis -- granted The debt-free status when he settled his obligations, according to the Jakarta Post at the time.

Argo Pantes was also one of the top 20 debtors of the bank rescue agency, which took over impaired corporate debt from banks to prevent a collapse of the financial system, according to a list published by the Indonesian Bank Restructuring Agency in 1999. While the billionaire declined to comment on how the Asian financial crisis affected his holdings, he said it influenced the way he ran his empire.

“Moving forward, we must be more cautious and more careful,” he said.

Recovery and Investment

The bounced back as interest rates fell and the country’s currency and stock prices rose after the crisis. Fitch Ratings and Moody’s Investors Service restored Indonesia to investment grade more than a year ago for the first time since 1997, attracting companies to invest in the country. Foreign direct investment rose 27 percent in the first quarter to a record 65.5 trillion rupiah, according to the government. Toyota Motor Corp., Asia’s biggest carmaker, said in November it will build a new engine factory in Indonesia to more than double capacity in the Southeast Asian country.

“He used to be one of the big players during the Suharto era,” said Bahana TCW’s Wibowo. “Slowly but surely, the group recovered from the impact of the crisis and has come up again with Alam Sutera and Bekasi Fajar.”

Alam Sutera is developing its second town in Tangerang, a satellite city to the west of Jakarta where residential complexes have sprung up alongside industrial growth.

The developer has more than 2,000 hectares of undeveloped land, said Tri Ramadi, president director of Alam Sutera, sitting with The in his Jakarta office. The company opened a mall last year, and plans to build two office towers in Jakarta’s central business district.

Multiple Projects

“Two years ago we were a single-project company,” Tri Ramadi said. “Now we have a few projects contributing to the revenue of the company.”

Bekasi Fajar’s share price closed on May 8 at its highest level since the company’s trading debut in April last year. MM2100, the industrial town the operation developed with Japanese trading company Marubeni Corp. (8002), has the best access to Jakarta’s central business district, the international airport and seaport compared to neighboring industrial properties, according to a Jan. 17 report by Indo Premier Securities.

Daiwa House Industry, Japan’s biggest home builder, agreed in November to buy a 10 percent stake in the company from Argo Manunggal Land Development. Daiwa House plans to attract more Japanese companies to Indonesia, Hungkang Sutedja, president director of Bekasi Fajar, said in the interview.

The octogenarian has given operational control of his assets to his seven children and professional managers. He still comes to the office from 10 a.m. to 5 p.m. daily to supervise the group. He first takes a 30-minute walk around his house.

“My principle in life is that we must fulfill our promises,” The, wearing a gray suit, said, as he leaned back on a brown leather sofa. “Everything must be planned well.”

To contact the reporter on this story: Netty Ismail in Singapore at nismail3@bloomberg.net

To contact the editor responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net

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