(The Insider Stories) - Muhammad Aksa Mahmud, the founder of Bosowa Corporation, a Makassar-based conglomerate with diversified businesses, has shown his entrepreneur spirit since he was a little boy. Since he was in elementary school, Aksa, who comes from a farmer family, already learned to sharpen his business intuition.

“I used to sell candies, traditional cakes at that time. Also, during Ramadhan, I used to sell ice blocks and dates,” the businessman who was born in Barru, South Sulawesi, told a group of journalists, including The Insider Stories in Makassar, the capital city of South Sulawesi province, in early March.

The businessman with Cancer zodiac (born on July 16 1945) remembered that it his difficult live in his childhood that taught him to be a tough and persistence businessman.

Aksa remembered that he had to help out to do a job in loading and unloading some goods to trucks just to get a free ride home from school.

“Why I turned into an artful person? It was because of my previous sufferings,” said the man, whose family business now has registered more than $1 billion worth of assets.

Bosowa’s businesses now span into 10 various sectors: automotive, cement, logistics & transportation, mining, property, finance, infrastructure, energy, media and multi-businesses.

Early Business Aksa’s family business empire began with automotive trading. On Feb. 22, 1973 he established a company called CV Moneter in Makassar, the capital city of South Sulawesi.

In 1978, the company secured exclusive rights as a dealer for Japanese car Datsun in Indonesia’s eastern territory. In the same year, the company changed name into PT Moneter Motor.

In October 1980, Moneter Motor was trusted by another Japanese car maker Mitsubishi Motor to be a dealer to sell Mitsubishi cars, also in the nation’s eastern part. At the same time, the company also renamed into PT Bosowa Berlian Motor, which Aksa remembered was a significant milestone for Bosowa’s business journey. Bosowa is an acronym of Bone, Sopeng and Wajo, three ancient kingdoms in South Sulawesi.

”I found my fortune off other dealer who did not do the job right. There was a Mitsubishi dealer here. The owner made delivery orders and sell the cars in Jakarta,” said Aksa, whose Bosowa just recently celebrated its 40th anniversary.

“The cars did not come here. When Mitsubishi guys came here, they found their cars were not here. Of course they were not happy. That was a reason for them to look for another distributor. Then, there I was, I jumped into that business,” he said.

Aksa said he always respects honesty, a principle that he stands on until now, which he believed has delivered his success.

“I sold the cars here [in Makassar]. Mitsubishi was happy. It is a good business anyway. The profit is huge at that time.

For example, if you buy one and sell it, you can buy two, it multiplies like that,” he said.

Mitsubishi slowly reduced orders for the dishonest dealer in Makassar and gradually enlarge the quota for Aksa. It did the same for other eastern regions, such as in Manado (The capital city for North Sulawesi province), Palu (the capital city for Central Sulawesi), Ambon (part of Maluku island) and East Nusa Tenggara province. Aksa’s Bosowa Berlian managed to fly its flag high in the region and became well known.

Cement Business, From Dream Into Reality

The 68 year-old businessman also shared his story how he started his cement business. “At that time, I was working on a construction work to build a dam. I experienced a time when cement was scarce at that time.

When it came to the market, the price was so expensive, I was so angry, I told the distributor, I am going to make a cement factory,” said Aksa.

He admitted that at that time he did not have any knowledge about cement business. However, he met a cement expert from ABB, a Zurich-based technology company that has a giant power and automation technology in the world.

Aksa remembered it was his persistence in lobbying the Siwtzerland executive to help him setting out cement business that led to the establishment of PT Semen Bosowa Maros.

“I remembered once, in a meeting with him he told me, I meet you because I feel pity for you. You want to make a cement factory, but don’t know anything about cement,” said Aksa, with a big laugh. Cement is now the biggest revenue generator for Bosowa’s business empire.

It contributed to more than 60 percent of the conglomerate’s revenue. The business is set to lead the group’s expansion with demand from all over the nation remains growing strong, supported by the fast rising property sector as well as the government’s increased efforts to push infrastructure development. Bosowa runs two cement manufacturers, PT Semen Bosowa Maros in Makassar and PT Semen Bosowa Indonesia, which based in Batam.

Cement output from both firms currently stands at 3.2 million metric tons, with the bigger proportion remains coming from Semen Bosowa Maros. Under the leadership of his eldest son, Erwin Aksa, who was appointed as the chief executive officer of Bosowa Corporation, Semen Bosowa Maros plans to enlarge its output to 12 million metric tons in 2014 or at the latest in 2015.

The conglomerate is ready to pour Rp 6.5 trillion as investment in the business within the next three years. Surviving the ‘98 Crisis An extremely difficult situation struck Bosowa’s business, as it was also felt by other conglomerates in 1997-1998.

Aksa saw his $202 million bank loans it took out in 1996, bubbled after the rupiah devaluated, reaching the worst level when it lost up to 85 percent of its value against the US dollar in 1998. Bosowa was in the middle of building a cement plant with a production capacity of 2.5 million tons per year. Aksa’s Bosowa could not repay the debt. However, he refused to be taken over by the Indonesian Banking Restructuring Agency (IBRA), which was tasked to restructure companies with a large amount of bad loans.

“I told them I was not giving up yet. Later, the government issued a policy that allow struggling companies to restructure their debt by extending the maturities,” said the Makassar businessman, who was an activist during his young age. “It was enough to give us a breath.

Bosowa’s debt was extended. As long as we can cover the operational costs, even tough with a pressing margin, I believed we could survive,” said Aksa.

After the crisis gradually recovered and Indonesia’s economy back into a good shape, Bosowa’s cement business flew faster.

Aksa’s Bosowa is one out of a handful conglomerates that made it through the crisis without letting go their core businesses.

Aksa can have a big smile now, especially after the conglomerate announced a significant milestone on its debt history on Dec. 2.

Bosowa said it paid off Rp 1.3 trillion worth of debt, the remaining legacy of the 1998 crisis to three state banks. The faster was made faster than the schedule as Bosowa felt it had enough cash to repay the loans.

Regeneration of Success

Aksa, a businessman with easygoing personality, who was also active in politics during 2004-2009, said he had learned from mistakes of 21 Makassar entrepreneurs that ruled the economy at the region in 1980s.

“Once I wondered why I found that the age of the business of these high profile entrepreneurs was only as old as the founder,” he said.

Aksa said he learned that the 21 entrepreneurs did not prepare their descendants well. The former deputy speaker of Indonesia’s House of Representatives recalled a story when children of a Makassar businessman fought for the fortune of their father when the father died. He told the group of journalists that he did not want to see a Chinese proverb – which says the founder works hard to build a family business empire, the second generation enjoys the wealth and the third destroy the business -- to happen in his family.

Aksa said he has been nurturing his children to feel a rough life, so that when they deal with problems, difficult situations, they turned into a tough and smart solution maker.

“Many kids from the rich family, when they meet a problem, they tend to deal with it stupidly. It was because they have been poured with wealth, money and fancy live,” said the father of five children. Aksa admitted he learnt a lot from Hadji Kalla, the founder of Kalla Group and the father of former Vice President Jusuf Kalla (2004-2009).

He said Hadji Kalla had prepared the generation change well and it enabled the business to keep flying up until now.

The Kalla group is Bosowa’s direct competitor in automotive trading as they distribute Toyota cars from the Astra Group.

The Kalla group is, however, part of Aksa’s family now as he married Jusuf Kalla’s sister, Ramlah Kalla. As part of his efforts to shape his kid’s mentality into a strong character, Aksa sent four of his five children out of home to study. Erwin, the eldest son of whom Aksa had prepared to become the crown prince of his business empire, was sent to to Bandung, West Java, since he was in junior high school.

Aksa said he did not transfer a fancy amount of money for Erwin to teach him how to live as common people with limited income. His other children, Sadikin, Melinda and Subhan were also sent outside Makassar when they were teenagers. Atira was the only one who enjoyed a high school in her born city, but later Aksa send her to the United States for her university degree.

Brotherhood Matter Above All

With now, Bosowa’s businesses have been taken over to his children, Aksa wanted to ensure the groom to keep the harmony within the family.

Erwin is leading the team, Sadikin handles Bosowa’s finance sector businesses and Subhan supervises the operations. Melinda was given the role to run Bosowa’s social aspect via Bosowa Foundation.

Meanwhile, Atira oversees a so called “the family fund”, which is the funds saved from Bosowa’s earnings to ensure that even the third generation of Aksa can equally enjoy good education.

Aksa, who has 11 grand-children now from his four children, said he told Erwin to ensure the groom to have strong bounds and can work together to bring Bosowa into “five times” bigger as it was when he handed over the business. He said, his advice to the groom was “money you can always search at anywhere, but brotherhoods, once it is cracking, you can’t find it elsewhere.” Erwin, who have been leading billions dollar of expansion of Bosowa’s business in various sectors, especially cement and energy, has told the media that he intended to grow Bosowa’s total assets to Rp 15 trillion ($1.54 billion) by 2014 or the latest Rp 2015 from around $1 billion now. (Awr) (($1 = 9,711).