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Djarum's business empire-from cigarettes, banks, to hotels-is booming, with cigarettes as the mainstay.
AFTER a tug-of-war lasting more than a year, the Djarum business group finally succeeded in taking over Hotel Indonesia and Hotel Inna Wisata (formerly known as Hotel Wisata). State Minister for State-Owned Enterprises, Laksamana Sukardi, confirmed Djarum's move to own the Hotel Indonesia complex in mid-March. "Officially, renovations can begin any time," said A.M. Suseto, President Director of PT Hotel Indonesia Natour, which oversees state-owned hotels.
Although the negotiating process was tough, the final agreement between Djarum-which flew the PT Cipta Karya Bumi Indah flag-and Hotel Indonesia Natour was as previously reported. Cipta Karya as the investor, must expend Rp1.2 trillion to restore the two hotels to their former glory. In return, it has the right to manage them for 30 years. During the build-operate-transfer (BOT) period, 49 percent of Hotel Indonesia and Hotel Wisata's revenues will go to the government, with Cipta Karya retaining the balance.
Hotel Indonesia and Hotel Wisata will be Djarum's third largest investment in the past two years. In 2002, Djarum, as represented by Alaerka Investment, embraced Farallon Capital to take over 51 percent of Bank Central Asia's shares auctioned by the Indonesian Bank Restructuring Agency (IBRA) and valued at Rp5.3 trillion. In the same year, Djarum, also using the Cipta Karya company, launched the World Trade Center trade complex in Mangga Dua, Jakarta. The project's value, according to property consultant Pro Lease, is estimated at Rp600 billion.
The Indonesian Business Data Center (PDBI) mentioned last year that Djarum owns 65 business units scattered throughout 13 industrial sectors. Amazingly, 19 of the units were established after 1997, when most Indonesian conglomerates were hit by the monetary crisis. A source in Djarum said some time ago, that there were approximately 50 Djarum subsidiaries.