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On the right track

   

Portfolio, February/March 2007

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COVER STORY
By KS Kim

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Francis Yeoh, the flamboyant Malaysian billionaire and managing director of YTL Corporation Berhad, is almost always making news headlines. Mostly, it’s for his business acumen or political connections, but then there’s his involvement in the arts, his penchant for hosting celebrities at one of his luxury resorts, or for the swanky Starhill Gallery in Kuala Lumpur. Even now, Yeoh is generating newspaper copy in bidding for a fast rail link connecting KL to Singapore. Beneath his vision and artistic ideas, this is one man who really knows how to do business, reports KS KIM.

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THE SCENE IS TYPICAL OF an afternoon in Kuala Lumpur's famed Bukit Bintang district. Literally meaning 'star hill' in Malay, there is always a palpable buzz in the air. Pedestrians jostle for space along footpaths, shoppers amble languidly while looking at eye-catching window displays and, on the road, an endless stream of cars motor past towering buildings and glitzy hotels, solidifying the area's reputation for having the most intense concentration of shopping, dining and entertainment in Kuala Lumpur. It hasn't always been like this though.

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When Bukit Bintang was established in the late 1950s, at about the time Malaysia won its independence from Britain, the scene was a little rowdier. Most of the attention centred on a former cabaret and amusement centre known, nostalgically, as BB Park. All of that changed, however, when Malaysian tycoon, Tan Sri Dr Francis Yeoh Sock Ping, set his sights on the area.

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Bukit Bintang, it would seem, has long been the chosen seat of the Yeoh family. The penthouse of the Yeoh Tiong Lay Plaza, a 55-storey building named after Tan Sri Francis's father, is where the charismatic tycoon's office is headquartered.

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It's also a common sight to see Yeoh himself walking around Bukit Bintang whenever he is in town, making it a point to personally check on how the retail spaces are doing or if everything is running smoothly at his hotels. Although he does it discreetly and without fanfare, save for a bodyguard or two trailing him inconspicuously, most people would still take notice of the smart-looking Chinese man (Yeoh's grandfather emigrated from Fujian province, in southern China, in 1920), usually dressed in a dark suit and bright tie or trendy shirt and designer jeans.

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Articulate, educated and highly visible compared to many other Asian tycoons, the 52-year-old Yeoh has been credited with almost single-handedly reviving the Bukit Bintang district, as well as injecting it with YTL's brand of world-class style. As head of the YTL Corporation Berhad, a listed entity whose business interests span a wide swathe of industries that includes cement manufacturing, property development and construction contracting, Tan Sri (a title of great honour bestowed upon him by the King. It is, in fact, the second-highest federal title a Malaysian can receive) Francis is almost a household name in the country.

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YTL Corporation Berhad's hotel development and management arm already owns and runs three of the most luxurious hotels along the strip - The Ritz-Carlton, Kuala Lumpur, The Residences at The Ritz-Carlton Kuala Lumpur and the JW Marriott Hotel. The popular Lot 10 shopping mall just up the road is also in its property portfolio, while the jewel in the crown has got to be the Starhill Gallery, which Yeoh re-opened in grand style in July 2005.

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Already, Yeoh's revival of Bukit Bintang has resulted in benefits for various sectors. The watch merchants, in particular, have wholeheartedly supported Starhill Gallery by opening several flagship stores and helping to make it the definitive retail space for luxury timepieces. The horological world's big guns, including Swatch CEO, Nick Hayek Jr, have nothing but praise for the Starhill Gallery and the amazing line-up of tenants Yeoh has managed to amass under one roof.


   
Articulate, educated and highly-visible, Yeoh has been credited with almost single-handedly reviving the Bukit Bintang district, as well as injecting it with YTL's brand of world-class style.

CURRENTLY ONE of the brightest stars on the Malaysian corporate scene, a beaming Yeoh was also recently seen acknowledging the accolades that came when the group announced a 248 per cent rise in its net profit for the financial year ended June 30, 2006, from MYR561.2 million ($160 million) to MYR1.39 billion ($396 million). But figures aside, it is widely believed that whatever project the YTL Corporation takes on, a stylish, sophisticated streak is certain to be detected.

 

Certainly, this is evident in almost all the work YTL does or whatever project Yeoh involves himself in, as it is also a clear reflection of his own tastes. Analysts and business watchers have long noticed a penchant for synergy when it comes to Yeoh's way of working, often blending commercial and private interests.

 

Take, for example, YTL's series of free public performances by The Three Tenors in Bath, England, several years ago. Bath happens to be the headquarters for Wessex Water Limited, a 100 per cent subsidiary of YTL Power International Berhad. And when YTL Corporation Berhad turned 50 in 2005, it held a series of free concerts at the Kuala Lumpur Performing Arts Centre, flying in musical performers from around the world, including British tenor, Russell Watson.

 

The success of the company has been a truly remarkable story. Tan Sri Francis's father, Yeoh Tiong Lay, founded the Yeoh Tiong Lay Construction Company in the small town of Kuala Selangor in 1955.

 

At the time, Malaya was under a State of Emergency, declared by the British colonial government to counter the threat of communist insurgents. The colonial rulers needed someone who could build much- needed army barracks and ammunition depots, and it was here that Yeoh's company began to make its fortune in construction and infrastructure.

 

Following Malaysia's independence in 1957, the Yeoh Tiong Lay Construction Company benefited from the new government policies and large-scale projects implemented to help the country grow and thrive, including the building of hospitals and educational centres. Over the following decades, the company rebranded itself as YTL Corporation Berhad and eventually listed on the Main Board of Bursa Malaysia Securities Berhad in 1985. A secondary listing on the Tokyo Stock Exchange followed 11 years later.

 

Today, the parent company and four listed subsidiaries with stakes in construction contracting, cement manufacturing, property development, utilities, hotel development and management, information technology and e-commerce initiatives, and with a combined market capitalisation of around $5 billion, operate under the YTL umbrella.

 

Yeoh's commercial ethics are underpinned by the mantra of being able to 'do good to others' while doing good business. While developing the high-end Sentul West housing project, Yeoh decided to also gift a sizeable space to Malaysian theatre group, The Actor's Studio, after its original space was devastated in a flood. When people commented on the generous act, Yeoh reportedly shrugged his shoulders, saying, "Kuala Lumpur is my city and I participate in its soul."


   
Yeoh's commercial ethics are underpinned by the mantra of being able to 'do good to others' while doing good business.

AFTER THE death of his wife, Puan Sri Dato' Paduka Rosaline Chan Yee Hing, a former Hong Kong actress and mother to his five children, from cancer last year, Yeoh's focus has been developing and adding value to the YTL name. It's an easy enough task though, with many of his peers acknowledging that having Yeoh on board as a financial backer is a definite confidence booster. Dato' Michael Yam, the equally prominent CEO of another Malaysian property developer, Sunrise Berhad, observes, "If ever he (Francis Yeoh) decides to do anything else, the betting average will definitely increase:'

 

At present, 70 per cent of YTL's global revenues are generated outside Malaysia and Yeoh, ever watchful for chances to expand the group's reach, is also seeking further opportunities. After its maiden foray in property development in Singapore, a $100 million bid to build 15 luxury resort residences under the Lakefront Collection - part of the SGD4 billion ($2.6 billion) Sentosa Cove project - Yeoh is also casting his eyes further abroad.

 

SCOUTS HAVE been dispatched to look for more business opportunities in the region, as well as around the world, while he is also mulling over the possibility of building a second Starhill Gallery in Singapore. The YTL group is currently involved in negotiations over developing a MYR$8 billion ($2.28 billion) project that aims to link Kuala Lumpur with Singapore via bullet train.

 

If the project goes ahead, it would be a stunning feather in Yeoh's already well-decorated cap. But having realised the gargantuan task that lies ahead, he maintains an optimistic, if cautious, outlook.

 

"I do not say it is going to be easy," he said, "but I would say that geo-economics are more important than geo-politics... especially when there is both the opportunity and the money with which to get it done."

 

Spoken like a true businessman? You bet.


   

YTL Timeline

 

1955 Yeoh Tiong Lay starts the Yeoh Tiong Lay Construction Company in the small town of Kuala Selangor, one year after Francis Yeoh is born.

 

1971 Yeoh Tiong Lay hands over the running of his construction business to Francis, after his eldest son graduates with honours in civil engineering from England’s Kingston University.

 

1984 Francis Yeoh is appointed to the board as Executive Director.

 

1985 YTL lists on the Main Board of Bursa Malaysia Securities Berhad in 1985

 

1986 Opens the Pangkor Laut Resort

 

1988 Francis Yeoh is appointed Managing Director of YTL.

 

1991 Launches Pantai Hillpark and enters into a shareholder’s agreements for the Eastern & Oriental Express luxury train service.

 

1993 YTL becomes Malaysia’s first Independent Power Producer. YTL Cement is listed on the second board of the Malaysian stock exchange. The inaugural Eastern & Oriental Express train journey from Singapore to Bangkok takes place in September.

 

1996 Becomes the first Asian non-Japanese company to list on the Tokyo Stock Exchange.

 

1997 Profits from the global markets downturn by purchasing assets from cash-strapped companies at cut-throat prices. Opens The Ritz-Carlton, Kuala Lumpur, Malaysia’s first luxury boutique hotel. YTL Cement is transferred to the main Malaysian stock exchange board.

 

1998 In a consortium with Siemens AG and Siemens Electrical Engineering, YTL is awarded the Engineering Procurement and Construction contract for the Express Rail Link project connecting Kuala Lumpur to the new Kuala Lumpur International Airport (KLIA). Officially launches the Pahang Cement Plant, a joint venture with the Pahang State Government.

 

1999 Acquires Lot 10 and Starhill shopping centres in Kuala Lumpur, as well as the JW Marriott hotel.

 

2000 YTL Power International acquires a 33.5 per cent stake in ElectraNet Pty Lot, which owns and operates the electricity transmission grid for South Australia.

 

2002 Completes construction of the Express Rail Link on schedule. Acquires Wessex Water Limited, one of the most efficient water and sewerage providers in the United Kingdom.

 

2003 Acquires the 50 per cent of the Pahang Cement Plant that it did not already own.

 

2004 YTL Power International buys a 35 per cent stake in Indonesia’s PT Jawa Power. Infoscreen Networks Plc, the holding company of YTL Info Screen, is listed on the Alternative Investment Market (AIM) of the London Stock Exchange.

 

2005 Francis Yeoh unveils the new-look Starhill Gallery, whose stunning façade was designed by architect, David Rockwell.


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