Billionaire Widjaja Family to Cut Stake in Exchange

By Chanyaporn Chanjaroen  

The Widjaja family plans to reduce its controlling stake in Indonesia’s largest derivatives exchange over the next three years after recovering losses from the bourse, said Chief Executive Officer Megain Widjaja.
Among those that have expressed interest in the Indonesia Commodity & Derivatives Exchange, or ICDX, are foreign financial institutions, Widjaja said in an interview in Singapore on Dec. 4. The family currently owns between 50 percent and 60 percent of the ICDX, he said, without giving the size or a valuation for the planned stake sale.
Billionaire Eka Tjipta Widjaja, 91, controls a business empire that includes Golden Agri-Resources Ltd. (GGR), the world’s second-largest palm oil producer. He is Indonesia’s fourth-richest person with net worth estimated at $5.8 billion, according to the Bloomberg Billionaires Index. ICDX, started in June 2009, will add natural rubber next year to its listings of tin
and palm oil, said Widjaja, a grandson of Eka Tjipta.
“We want to increase transparency and accountability,” he said. “We want to open up the market to shareholders that will bring strategic values to expand ICDX to the global stage.”
Companies based outside of Indonesia would be able to own as much as 40 percent of ICDX, said Widjaja, citing the country’s regulations. The company is also open to local partners, and may consider an initial public offering after the planned stake reduction, said Widjaja who turns 33 this month.

Pricing Control

Indonesia is the world’s top producer of palm oil, largest exporter of tin and follows only Thailand in terms of rubber production. ICDX became a marketplace for physical tin in 2012 and volumes picked up last year after the Indonesian government ruled tin must be traded on a local bourse before being exported, as it sought to create a benchmark price and challenge the role of the London Metal Exchange.
The planned natural rubber contract will also be on a spot basis and for the local raw material only, Widjaja said. ICDX followed a recommendation by the International Tripartite Rubber Council that Thailand, Indonesia and Malaysia list natural rubber on their own exchanges, he said. Rubber futures have slumped 28 percent this year on the Tokyo Commodity Exchange to 197.4 yen a kilogram ($1,639 a metric ton).
ICDX signed a memorandum of understanding in February with Deutsche Borse AG-backed Global Markets Exchange Group International and European Commodity Clearing to explore links. ICDX also owns its clearing house, Widjaja said.
Noble Group Ltd. (NOBL), Asia’s top commodity trader, Wilmar International (WIL), the world’s largest processor of palm oil, and Seoul-based Daewoo International Corp. are among the 73 trading members of ICDX.