The Salim Family — Transcript

Are you familiar with Indofood, Indomaret, Indocement, or Indosiar? If you do, they all have one thing in common. All of these businesses are owned by the Salim family. Now, we’re going to talk about them.

This is a discussion of the history of the family, and a closer look at their family tree using a web based program called Entitree. Entitree uses wikidata to generate family trees of famous or well known people.

Sudono

Let’s start with Sudono Salim, also known as Liem Sioe Liong. Sudono was a Chinese-born Indonesian businessman who, at one point in his life, was the richest man in the country. He was the founder and chairman of the conglomerate Salim Group. According to Forbes magazine in 2004, Sudono was one of Southeast Asia’s richest men, and the 25th wealthiest person in the world at an estimated worth of six hundred and fifty five million American dollars. (US$655) million. Sudono died in 2012 at a hospital in Singapore. He was 95.

Sudono Salim was born in Fuqing, then moved to Medan, Indonesia, following his brother’s footsteps. 
In Kudus, the capital of Central Java, Sudono’s business grew. There, he also met his wife Lilani, the daughter of a successful clove businessman. The name Sudono was personally given by Indonesia’s former dictator, Suharto. It means ‘Good Money’ — “Su”, meaning good, and “Dono”, meaning money in Javanese. The Liem family adopted “Salim” as their Indonesian surname.

Sudono’s marriage to Lilani officially merged him to one of the country’s most lucrative clove businesses, and enabled him to start his own ventures. This marriage produced four children: Albert, Andree, Anthoni, and Mira Salim. His third son, Anthoni Salim, is currently in charge of the Salim Group and all of its subsidiaries.

1998

Suharto association/ Reformation Era. Sources: WP, WSJ 
In the 1960s, Suharto was laying down the foundations of his financial empire. He allied himself with two conglomerates, the Salim Group and the Nusamba Group. One of their first big projects was the Bogasari flour mills, owned by the Salims. These mills processed wheat from the U.S Food for Peace program. Suharto and Sudono’s partnership was mutually beneficial, as Suharto was later able to produce more conglomerate businesses for his six children, and Sudono cashed profit from his flour mills.

Suharto’s government allowed for contracts that promote economic monopolies. The Bogasari Flour Mills, under these conditions, became the world’s biggest flour-milling operation. Not only that, Sudono’s Indofood company was also the world’s largest instant-noodle producer. If you think all of this would be enough to thicken the Salim’s pockets, you are mistaken. The Salim Group also expanded to palm oil and timber plantations, and with the assistance of government tax breaks, he converted numerous lush islands into oil farms. This, of course, has numerous environmental repercussions which we’ll discuss later. Indocement, one of the company’s subsidiaries, is the country’s biggest cement producer.

The Salim family was publicly known as one of Suharto’s strongest allies, and this was mostly a good thing for them during the former dictator’s 31-year-rule. But when the regime fell apart in 1998, this association backfired. Anthoni and his family were on the wrong side of the Indonesian Reformation Era, and had to flee the country for survival. Their house was set on fire, and after a three-hours trip to the airport, Anthoni allegedly had to bribe each checkpoints Rp. 10- 15 million to get through.

More about this can be read on the Liem Sioe Liong’s Salim Group website

1997–1999 Asian Financial Crisis Bailout

The late 90’s just wasn’t a good time for the Salims. Shortly after Suharto stepped down, the value of Rupiah plunged in the Asian Financial crisis, and Anthoni Salim’s Group struggled to pay up its enormous debts. The International Monetary Fund (IMF) at that time was willing to help Indonesia with a $43 billion bailout, in return demanding to end cronyism in the country — cronyism; meaning “the appointment of friends and associates to positions of authority, without regards to qualifications”. This was seen as a direct attack to conglomerates like Salim. 38

In August of 1998, Anthoni Salim met the bankers from Lehman Brothers, J.P. Morgan, and the Indonesian government. He refused to entertain IMF’s demands. According to the Wall Street Journal, he said to the bankers, “If you want to kill us off, fine. But you’ll lose 100,000 jobs.” The IMF later decided that the Salim Group was too big to fail, and the Indonesian Bank Restructuring Agency then wrote off Anthoni’s $7 billion bank debt.

Anthoni Salim still had to sell major shares of his company, though. For example, most of its shares of BCA had to be sold to Djarum.Then-president Habibie struck a deal to give Anthoni a four-year repayment window in 1998 and an opportunity to recover some of the 104 companies at stake. Anthoni had to work hard to recover from this downfall, expanding his business to California and Netherlands — and not without difficulties — to survive in the market.

Well, he certainly did better than just survive. Now, with the company’s estimated worth of $5.5 billion, Anthoni Salim is Indonesia’s fifth richest man.

Family tree

Now let’s have a look at Sudono Salim’s family. As mentioned before, Anthoni is now in charge of the business, but let’s not forget about his other siblings.

Sudono’s first son, Albert Salim, is not his most successful child. Albert had a business of selling Volvo cars to the government and army, who ended up not paying their dues.

His brother Andre Salim is the vice-chairman of the Singaporean bread maker company QAF Ltd. Andree’s son, Lin Kejian, is involved as a director for the company.

Anthoni’s youngest sister, Mira Salim, is married to Franciscus Welirang. Franciscus is the CEO of Bogasari Flour Mills, a part of Indofood which processes flour, the essential ingredient for our beloved, world-famous Indomie. Mira and Franciscus had two daughters, of which one unfortunately passed in an accident in Singapore. 
Closer family tree
Anthoni Salim, now the 5th richest Indonesian, has three children with his wife Margaret.

Similar to her low-key father, Astrid Salim has had little media coverage over the years. Little is known about
her, except that she holds a position in KMP Private Limited with her brother Axton.

Axton Salim, born 1979, studied business in Colorado. He first started as a brand manager for Indofood Fritolay, and became a director for Indofood in 2009. He is very involved in the marketing aspect of the company, and if you are one of the Indomie-flavored-potato-chips enthusiasts, you may thank him for the campaign. Axton is the Executive Director of Salim Group, and is working with various partners like Block 71 Indonesia.

Alston Stephanus is Anthoni’s youngest son, born in 1987. He is a fashion designer and a cosplayer. Alston is not involved in any of the Salim businesses, and he is not even using Salim as his last name. He married Eren Schifferling, who is a transgender. They refer to each other as “White Rabbit’’ and “Feline”. How cute! In 2019, they uploaded a photo of their wedding preparations on Instagram, but there is little media trace of this event. Despite the influence of Alston’s family, and the non-traditional nature of the wedding, the press was generally quiet and respectful of their privacy.

Family Businesses & Ventures

Sudono Salim is succeeded mostly by his son Anthoni and grandson Axton. The Salim Group’s business is vast; from the food manufacturing industry (Indofood INDF/ ICBP), franchise restaurants (KFC), the automobile industry (IMJS), agriculture (Salim Ivomas Pratama/ SIMP, PP London Sumatera/ LSIP), to finance (Bank Ina) and infrastructure (Nusantara Infrastructure/ META).

The most lucrative of these businesses is, of course, the palm oil industry. A big chunk of Indofood’s revenue comes from the sale of palm oil and its derivatives, like cooking oil, margarine, and shortening. Anthoni Salim is one of, if not the most, powerful palm oil king in Indonesia — the world’s largest palm oil producer. Some of their palm-related companies include Perusahaan Perkebunan London Sumatra Indonesia Tbk (LSIP) and PT Salim Ivomas Pratama Tbk (SIMP). (8:38- Slide IndoAgri)

Indofood-caused Environmental Damages

The immense success enjoyed by the Salims is not without cost. In 2018, the Rainforest Action Network, in partnership with the Rainforest Foundation Norway, found concerning reports on two palm oil plantation companies operating in Borneo’s Sintang District. One plantation, PT Duta Rendra Mulya, is mostly owned by Anthoni Salim. The other one, PT Sawit Khatulistiwa Lestari, is associated with Anthoni Salim through various business partnerships.

A lot of palm oil companies are responsible for the environmental degradation caused by reckless practices. Though only a couple of these companies are directly linked to Anthoni, the same environmental report said that Anthoni owns a lot of shares in other palm companies, “often concealed through several layers of ownership”. In other words, Anthoni would often use “shadow companies” to cover his group’s not-so-pleasant tracks.

Reports from the Rainforest Foundation show that the Salim plantations have cleared and drained multiple forbidden areas despite local regulations. To be precise, Anthoni is indirectly related to the extermination of a rainforest nearly the size of 10,000 rugby fields. The Ketungau peat swap, which was the only large peat swamp forest in Sintang, was cleared out to make way for oil farms. Scientists point out that this would cause irreversible damage and contribute significantly to global warming, since peatlands act as natural “carbon sinks”. Not to forget the loss of habitat for the countless wildlife in Borneo.

It’s not like there aren’t any local laws prohibiting these practices either. Despite regulations that clearly forbid the clearing of peatlands, companies associated with Anthoni Salim continue to go on with their dangerous practice. After all, the stakes are high for the Salim Group. Thanks to their palm plantations, they were able to build a powerful clientele that includes PepsiCo, Unilever, Nestle, Colgate Palmolive, Nissin Foods, and more. Business is so lucrative for the Salims that they are expanding to Papua. Meanwhile, non-governmental organizations from all over the world are increasingly worried that all this money is coming at a cost too high to bear.

Human rights violations

The Salim Group has also been accused of violating the rights of its palm workers. Reports by the Rainforest Action Network documented recurring labor exploitation — this includes inhumanely low wages, dangerous working conditions, and the employment of child labor. 
 
In 2017, a paper from Chain Reaction Research revealed that nearly half of the land used by IndoAgri was used as a resulted in environmental degradation, conflicts with communities, and other issues. In total, Anthoni’s landbank is approximately 550,000 hectares in size. 
 
But IndoAgri, a subsidiary of Salim’s palm companies, said to Palm Scribe in 2019 that they “categorically deny these false allegations, regarding human rights and labor practices.”

Conclusion

The Future for the Salim Group/ Family 
The Salim Group seem to have it all. Massive generational wealth. An impressive clientele. An unmistakable political presence. It is no doubt that when it comes to doing business, the Salims know best. But, outside of Indonesia, it is at times bogged down by external pressures to reform its business practices. For example, the allegations regarding human rights abuses and deforestation made against the Salim Group, has brought the conglomerate business trouble in the past. 
 
In early 2019, the Roundtable on Sustainable Palm Oil (RSPO) suspended several of IndoAgri subsidiaries for non-compliance with both the Indonesian and RSPO standards. As a result, the Salim Group lost some of its valuable investors, including Citigroup’s $140 million funding. It only took a few months until the company officially withdrew from RSPO. 
 
The Salim family will know how to navigate through these rough waters, though. Right now, it is choosing to focus on the Indonesian Sustainable Palm Oil (ISPO) standard, which is more “relaxed” than the RSPO requirements. It seems like the Salim Group has no clear intentions to remedy their exploitative practices, nor will it realistically damage them internally. Of course, having a long history working with the government won’t hurt either. 
 
Anthoni Salim, along with his son and family members, are now expanding their horizons to the tech market. They are starting to investing in massive companies like Google Cloud, and only time will tell how much bigger their wealth would be in the future. 
 
Thank you for listening and please feel free ask questions in the comment section below. Feel free to suggest any new video from us. And check out entitree.com to look at other business families. Bye.

Comments:

Eren Schifferling engaged with Alston in 2020: https://www.instagram.com/
p/B6vCMljhjO6/

https://www.instagram.com/axtonsalim/

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