ABSTRACT
The Sinar Mas Group, which was owned by the Widjaja family, was the second largest Indonesian business group in the 1990s.1 It was a diversified conglomerate arranged into the following four divisions: (i) pulp and paper; (ii) agribusiness, foods and consumer products; (iii) financial services and (iv) real estate and property. The group was the top Indonesian paper producer with more than 70 per cent of the domestic market and actively exported its products to other Asian countries. During the latter half of 1990s, it aggressively expanded its production and sales activities into other Asian countries, in particular, China.2 In the agribusiness, foods and consumer products division the group was one of the top three Indonesian private palm oil plantation owners producing palm oil for domestic consumption and for export to other Asian markets.3 These two business fields generated not only abundant cash flow but also foreign exchange income into the group and for this reason it was able to attract investors’ interest. In Minsky’s terms, the margin of safety, supported by the capacity to generate abundant foreign exchange cash flows, enabled the group to accumulate a huge external fund.
