Vassilis Gkatzelis, newly appointed president director of Sampoerna, revealed how long-term value creation had played a contributing role in Sampoerna’s lifespan.

“Sampoerna has a long history of 109 years. We recently celebrated our 109-year anniversary. We are always committed to creating value for our key stakeholders for the long term,” Gkatzelis told journalists at his office in Jakarta on Wednesday. 

Gkatzelis who has 19 years of working experience in Philip Morris International (PMI), the parent company of Sampoerna, was appointed as Sampoerna’s president director during the company’s annual shareholders’ meeting on June 9.

Despite taking the helm of Sampoerna just three months ago, Gkatzelis knows the company’s business inside out, especially when it comes to how Sampoerna has been operating, which contributes to its longevity.

“I read Sampoerna’s Legacy Book about Three Hands philosophy that has been the guiding principle of decision-making at the company for many years. I’m committing to continue the environment,” he said.

According to Gkatzelis, it’s always important to understand the history and culture of every country, “as well as your organization before you even think about the future of it, so I have been trying to understand.”

Explaining further the Three Hands philosophy, he said, “The first is about the adult consumers and smokers, the second is our employees and our business partners and the third is our society at large.”

“Everything we do at Sampoerna takes into account the long-term value creation and how Sampoerna creates value for the broader ecosystem. I think this is something very unique and very long-term oriented,” he said.

Gkatzelis is no stranger to long-term value creation. It is deeply ingrained in his blood.

Growing up in Athens, Greece, Gkatzelis learned impactful value creation from his grandparents, who ran a small family business.

“I always saw what value creation means for the customers, for the employees and for the community at large,” said Gkatzelis who regards his grandparents as his role models.

Gkatzelis embarked on his career with PMI as a graduate management trainee in 2003. Since then, he has climbed up the career ladder, holding important managerial positions in PMI, including managing director of Philip Morris Egypt & Levant Cluster and general manager of Philip Morris Morocco.

In terms of leadership, Gkatzelis said, he always believed in creating value for the long term and creating value for a broad range of stakeholders.

“So, in line with the Three Hands philosophy, I think this is the way that we need to think of what the future starting point is by anticipating the needs for the broader ecosystem. And this is what we do at Sampoerna.”

“As a person, I fully support the idea of understanding key challenges and opportunities. As an organization, you are always a part of the broader ecosystem and your job is to make the world better, because as an organization you are here to solve some big challenges and opportunities, and that’s why thinking about customers, thinking about your employees, thinking about your partners and thinking about your society is the only way you can measure your value for the long term,” he said.

Long-term mindset

According to Gkatzelis, who earned a global executive MBA from INSEAD, it takes a lot of forward thinking.

“I have seen that Sampoerna has been always adopting this long-term mindset, and that’s why it has a history that happened many years and an even brighter future,” he remarked.  

“And it’s not by a coincidence, but it presents the value across a very vast value-chain. So, this is my guidance to stakeholders, always in forward thinking – two-ways,” he added.

Some of the long-term value creation at Sampoerna that Gkatzelis was proud of was the company’s step to partner with hundreds of thousands of micro, small and medium enterprises (MSMEs).

Gkatzelis noted how Sampoerna had handled the issue of employees during the COVID-19 pandemic as the implementation of the Three Hands philosophy.

“Sampoerna has been always prioritizing the safety and wellbeing of its people. We are extremely happy and honored that Sampoerna has worked collaboratively with many stakeholders, governments and professionals, KADIN [the Indonesian Chamber of Commerce and Industry], and other key institutions to vaccinate all the employees, including booster vaccines.

“In the organizations, we take into account our direct and indirect employees. More than 65,000 employees in Sampoerna, and we also tremendously try to secure jobs.”

“At the same time, technology has allowed us to work remotely and achieve results by connecting [through] digital platforms.

“So, we believe not only in our family, but also, as you know, Sampoerna has the broad network of more than 165,000 MSMEs. We call it Sampoerna Retail Community (SRC), so we have been using digitalization to connect and grow. Safety, well-being and, at the same time, connectivity and digitalization,” he said. 

According to him, well-being has many elements, including those associated with physics, mentality and finance.

“So, I’m very proud that Sampoerna has been supporting the environment, not only inside the company but also in the broader ecosystem. We are always committed to supporting our employees, the economy and the society of Indonesia,” he affirmed. 

To demonstrate its commitment to long-term value creation, Sampoerna has invested in building a manufacturing facility in Karawang, West Java, to produce heated tobacco products, HEETS for IQOS.

“The products do not create combustion, and they don’t burn tobacco, and so they heat tobacco to represent a better alternative versus continuing smoking,” he explained.

He revealed that better alternatives had been the focus of PMI for almost two decades. “We have invested more than US$9 billion for the developments, scientific substantiations, manufacturing, commercialization and continuous improvements of the variety of platforms that do not combust tobacco, that are better alternatives for adult smoker,” he noted.

Sustainability

According Gkatzelis, sustainability is at the core of the way Sampoerna does business, which is in line with the company’s Three Hands philosophy.

“This is also aligned with the Sustainable Development Goals [SDGs],” he added.

“So we are always keen on creating an ecosystem that has multiplier effects in the economy. Just to give you an example, as I said before, Sampoerna has 38 different manufacturing facilities which are operated by third parties, and they are located in rural and different areas and provinces, which create an ecosystem and generations in the broader community.”

On sustainability, Sampoerna has been supporting the progress of MSMEs in Indonesia through the Sampoerna Entrepreneurship Training Center since 2007 and the Sampoerna Retail Community (SRC) since 2008.

“When it comes to MSMEs, part of sustainability is how to create inclusive growth and development. You know the tobacco sector is reliant on and employs millions of those in MSMEs, from farmers to retailers and different type of entrepreneurs.”

According to him, the same applies to SRC, which started in Medan more than 10 years ago. In 2008, SRC had only a few traditional retailers and to date, it has more than 165,000 members.

To support these retailers, SRC is helping them across their whole area of businesses.

“These entrepreneurs have increased their business level by 50 percent after joining Sampoerna’s [MSME development programs], and they have access to finance, education, technology,” he said.

Digitalization of their business is a very important part of Sampoerna’s priority.

“I think this is also the country's priority to transform digitally,” he noted.

He said he had personally met many of the company’s retail communities, where almost 60 percent of them are female entrepreneurs who are also breadwinners for their family.

“So, we are also supporting a very diverse part of the population, and this is growing,” he noted.

Gkatzelis said Sampoerna had aspirations to grow further by giving support to the MSME ecosystem as one of the ways to create a value for the whole ecosystem.

The MSMEs have the so called Pojok Lokal or Local Corner where the community can send art, crafts and culinary products.

The Sampoerna Entrepreneurship Training Center is another program under which more than 56,000 people were trained the last year. 

Sampoerna also runs other programs for farmers, focusing on agricultural labor practices under which they can become more sustainable and can help key talents thrive.

With respect to farmers, he said, Sampoerna had another program with more than 20,000 farmers.

“So, I think we have plenty of programs on how sustainability is becoming part of the way we do business, taking into account the adult smokers, adult consumers, the environment, the social situation and the country,” he said.

“So Sampoerna has always tried and been committed to create value for the broader ecosystem,” he pointed out.

Asked how he described his leadership style, Gkatzelis said, “My leadership style, I think, starts with listening to our key stakeholders.”

Gkatzelis revealed how he spent his first three months going around Indonesia, where he met the employees, SRC communities, ibu-ibu in hand-rolled facilities, business partners and people from authorities.

“I have tried to understand what the needs and expectations from the different stakeholder groups are,” he said.

“Through listening and understanding their needs, if you have an open mindset, I think this is where you create value,” he added.

“I think my leadership style is listening, collaborating together and always trying to give value beyond just the pure economic profit for corporations.

“So, I'm here. This is my new home. They are all my family. Sampoerna is my new family, and I'm here to enjoy and create value for Indonesia at large,” he concluded.