The Asian financial crisis in 1997 has affected numerous banks and large corporations throughout the ASEAN region, some of which even going bankrupt, or at least losing a large part of their business ventures.
This was almost the case for Sukanto Tanoto and the RGE Group during the financial crisis. While going through a very difficult phase, Mr. Tanoto managed to get his business through the crisis and gain significant recognition for his careful efforts and sound reasoning.
A Financial Crisis Can Affect Everyone
According to Sukanto Tanoto, as he had stated at his lecture on dealing with a financial crisis at the Wharton Global Modular Course in Singapore, a significant financial crisis can affect everyone – from the most established international corporations to the poorest individuals living in countries like Indonesia.
As a result, he showed how without a cautious approach to business that is essential for any investor or producer, and without a secure strategy for dealing with a potential crisis, even a large group of corporations like the RGE can – and has – run the risk of losing everything.
Sukanto Tanoto’s Approach and Insight
During the 2008 financial crisis, Mr. Tanoto was facing a difficult situation to secure funding for RGE projects and his unsuccessful negotiations with domestic banks made him risked losing everything he had built over the past 30 years, basically overnight.
Fortunately, with the invaluable support of his family and through a carefully thought out strategy, involving the sale of one of his most valuable assets in China and asking for more time and assistance from the banks, he managed to gain the momentum he needed to increase production and cash flow, essentially taking his company out of crisis by 2002,
As Mr. Tanoto concluded, a safety net is extremely important even when business seems to go very well. This is exemplified by the fact that his successful efforts in dealing with the Asian financial crisis has paid off in recent years, business partners, banks and investors having been far more willing to work together with the RGE and its subsidiaries.