Conglomerate is a diverse and unrelated group of companies under a parent company. This term also often refers to the owner or business group, not referring to a company. Examples are Djarum Group, Salim Group, Kall Group, Sinarmas Group, Astra Group, Kalla Group, and others.
EConglomerate example in Indonesia: Astra International Tbk and its subsidiaries
- Car Financing: PT Astra Sedaya Finance, PT Toyota Astra Financial Services
- Heavy Equipment Financing: PT Surya Artha Nusantara Finance, PT Komatsu Astra Finance
- General Insurance: PT Asuransi Astra Buana
- Motorcycle Financing: PT Federal International Finance
- Life Insurance: PT Astra Aviva Life
- Banking Services: PT Bank Permata Tbk
- Mobile Lending Fintech: PT Astra WeLab Digital Arta
- Construction Machinery: PT United Tractors Tbk, PT Traktor Nusantara
- Mining Contracting: PT Pamapersada Nusantara
- Mining: PT Tuah Turangga Agung, PT Agincourt Resources
- Construction Industry: PT Acset Indonusa Tbk
- Energy: PT Bhumi Jati Power
- Palm Oil Plantation: PT Astra Agro Lestari Tbk
- Palm Oil Processing Factory: PT Tanjung Sarana Lestari, PT Kreasijaya Adhikarya, PT Tanjung Bina Lestari
- Commodity Trading: Astra-KLK Pte. Ltd.
- Cattle in Palm Oil Plantation: PT Agro Menara Rachmat
- General Infrastructure: PT Astra Tol Nusantara, PT Astra Nusa Perdana
- Logistics: PT Serasi Autoraya
- Toll Road: PT Marga Mandalasakti, PT Marga Trans Nusantara, PT Marga Harjaya Infrastruktur, PT Trans Marga Jateng, PT Trans Bumi Serbaraja, PT Lintas Marga Sedaya
- Sea Ports: PT Pelabuhan Penajam Banua Taka
- Document Solution: PT Astra Graphia Tbk
- Office Services Solution: PT Astragraphia Xprins Indonesia
- Information and Communication Technology Solution: PT Astra Graphia Information Technology
- Commercial Properties: PT Menara Astra
- Trading Properties: PT Brahmayasa Bahtera, PT Samadista Karya, PT Astra Land Indonesia, PT Astra Modern Land
Pros and Cons
Conglomerates often do not have a clear strategic focus. Subsidiaries operate individually and have a little synergy from others since their business and products are unrelated.
Meanwhile, diversification is among the main advantages of conglomerate. Having a variety of businesses, a conglomerate spread its risk across several companies. Excellent performance in some companies can compensate for poorly performing companies, which support the overall performance of the group.
Conglomerates are also popular because they are considered to provide better management and better financial support. The strong business position also allows them to generates more profits than independent small companies.