How the Lohias Built a Polyester Empire in Indonesia
Sri Prakash Lohia, the fourth richest Indonesian person, and his son Amit own one of the largest polyester businesses in the world, besides petrochemical plants in Africa.
When Sri Prakash Lohia, born in Kolkata and educated in Delhi University, went to Indonesia with his father, ML Lohia, in 1975 to set up a business with dreams of making it big, he perhaps did not know the huge success he would attain by the age of 65. Today, the Indian family-owned Indorama Corporation, headquartered in Singapore, is the largest producer of polyolefins in the entire western Africa region, spanning 18 countries.
Lohia is currently the fourth richest man in Indonesia, where he started his business Indorama Synthetics with his father. He was named the 288th richest man globally with $5.4 billion to his name in Forbes’ list of richest billionaires in 2017. Since the list was published, he has increased his wealth and has a net worth of $6.1 billion, according to Forbes’ real time data.
All in the Family
Lohia and steel tycoon Lakshmi Mittal, both from Kolkata, started their journey in Indonesia, but that’s not the only connection they share. The chairman of Indorama Corporation is married to Mittal’s younger sister Seema, and both live in London. Lohia has given the reins of the company majorly to his son Amit, who lives in Singapore, but he himself takes care of the Nigeria operations.
Amit was called “the prince of polyester” in an earlier Forbes article since the Wharton University-educated Lohia is the next-in-command in the family. Since it is a family business, it did not take Amit long to become the Vice President Commissioner and Managing Director, PT. Indo-Rama Synthetics Tbk. The 43-year-old has also been the Group Managing Director at Indorama Corporation Pte. Ltd. since 2009.
“Dad is more of a risk taker. He operates from the gut, and his gut is usually right,” Amit told Forbes. The patriarch, Sri Prakash, said he appreciates Amit’s ability to keep a cool head even during rough spells.
The Lohia patriarch’s journey has not been a smooth one all the way. His family-owned synthetics business was divided by his father among the male siblings to prevent a feud. In 2007, the family acquired a state-owned mill in Egypt to further expand the yarn business, but the Arab Spring dampened the plan. Even before the Arab Spring, the workers did not fall in love with the company’s vision. Indorama claimed $156 million as compensation for the mill’s renationalization but was awarded $54 million.
The Polyester Empire
Sri Prakash’s company is now one of the top polyester producers in the world. The Indorama Synthetics and Indorama Ventures together own 57 factories in 21 countries. His younger brother Aloke is also one of the richest men in Thailand. A Thai citizen, Aloke, and Sri Prakash joined their Thailand operations in 2008. They hold 34 per cent each. Another sibling, OP Lohia, runs an independent polyester and yarns business in India called Indo Rama.
Apart from investing hundreds of millions of dollars to establish Chimique du Senegal (ICS), the largest fertilizer plant in Senegal, Sri Prakash’s firm has also invested a significant amount in Nigeria. It is the largest producer of fertilizer in sub-Saharan Africa, company spokesperson Ramesh Soni told IANS recently. The production capacity of the Nigerian unit is 1.4 million tonnes of urea.
The company further expanded their operations to Mexico this month when Indorama Ventures Public Company Limited (IVL), a global chemical producer, acquired DuraFiber Technologies México Operations, S. A. DE C. V. (Durafiber), a leading Mexican producer of durable technical textiles for industrial, tire reinforcement, and specialty applications globally.
The family-owned business intends to increase their investment in Africa to $4.2 billion by 2020. Their business holdings span four continents currently.
Oxfam, a non-governmental agency working to uplift global poverty, published a study earlier this year saying that the richest four people in Indonesia, including Sri Prakash, own as much wealth as the bottom 40 per cent, which is 100 million people. The World Bank and other institutions have urged Indonesia to work on redistributing wealth to avoid political and economic risks.