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Man with the Midas touch

   
New Straits Times, August 24, 2003
By Annie Freeda Cruez

HAVING a rich father and connections does not necessarily mean you will automatically climb up the ladder of success.

Success comes as a result of a lot of hard work and sacrifice, plus a dose of lady luck.

We are talking about one of Malaysia's most successful corporate figures, Tan Sri Francis Yeoh, who was voted by Business Week as one of the 25 Stars of Asia 2003.

It is indeed remarkable how Yeoh has taken his relatively unknown family construction company (YTL) and turned it into a utility corporation with global reach.

Today, more than half of YTL's revenue comes from outside Malaysia. Sales are up 57 per cent while net profit rose 45 per cent to US$97 million (RM368 million). YTL, which was set up in 1955, is today comfortably sitting on US$1.5 billion (RM5.7 billion) in cash, with US$842 million debts.

Yeoh, a well-known patron of music — Malaysians have been fortunate to have enjoyed performances by world-renowned tenors like Luciano Pavarotti and Jose Carreras at YTL concerts — is the eldest of seven children of Tan Sri Yeoh Tiong Lay.

The senior Yeoh is YTL Corporation executive chairman while the junior Yeoh is managing director.

Francis Yeoh had wanted to drop out of school at the age of 16 to start earning money when the family's construction business nearly went bust in 1971.

Syarikat Pembinaan Yeoh Tiong Lay Sdn Bhd (SPYTL), the family's flagship company, faced near closure due to recession that hit the region in the 1970s.

The construction sector nearly came to a complete halt as prices of construction material soared during the recession. Many companies were badly affected and some went bust.

Construction was SPYTL's sole business and at that time, it had about 100 employees, all of whom were related to the Yeoh family in one way or another.

"The employees offered to pawn their gold and silver, hoping that it could help my father from having to close down the business." Yeoh remembers that his father was not sure the company could be saved, yet he vowed to pay back every sen to his creditors.

"Being the eldest, I wanted to leave school and help my father at the construction site. But my father said something which I still remember today. "He said ‘What can you do that I have not done? Can you be more hardworking than I? You should go ahead and get your engineering degree. Then, maybe, you will be able to read the economic cycle and be ready for the next crisis'." SPYTL, with the support of many people, extricated itself from its predicament and was back on track.

It might have happened many years ago, but for Yeoh, who studied at the Victoria Institution in Kuala Lumpur, the near closure of the family business and the turmoil the country went through then was one thing he could never forget.

After witnessing large companies in trouble, and with some declaring bankruptcy, and even some established businessmen in the region facing financial problems, Yeoh has developed a phobia for borrowing.

Yeoh, 48, who took over the management of the company from his father in 1978, was ready when the recession hit the nation again.

The company had enough reserves to see it through the few years that it did not have any business.

From a mere RM30 million in turnover in the 70s, it managed to secure projects valued at RM400 million between 1982 and 1985.

Sometime in the late 70s, a few days after he returned from abroad after finishing his studies, Yeoh bought a relatively unknown listed company called Hongkong Tin whose domicile was still in London.

He told friends and associates at a dinner: "Watch this counter. It will fly like it has never flown before. Follow it and you will never regret." Those at the dinner table did not take his words seriously. Many brushed him off as just another greenhorn swimming for the first time in "shark-infested" corporate waters.

Yeoh delivered on his promise. Hongkong Tin, which was then part of the Straits Trading stable of listed companies, has became YTL Corporation, the umbrella of all the listed companies of the Yeoh Tiong Lay family today.

Under the shrewd and careful management of Yeoh, YTL Corporation emerged from the recession in the 80s unscathed. Since then Yeoh has given YTL its international flavour with the RM6.69 billion purchase of British water firm Wessex Water through YTL Power International.

Yeoh knows what he wants, means what he says and delivers what he promises.

When he announced the proposed listing of YTL e-Solutions on the Mesdaq, Yeoh was reported to have said: "YTL philosophy is a contrarian. Every time investors don't want it, we want it." YTL, through its subsidiary YTL Land Sdn Bhd, surprised corporate leaders when it bought three prime properties in Kuala Lumpur — Lot 10 shopping centre, Starhill shopping centre and JW Marriott Hotel in Bukit Bintang — for RM323 million cash.

When most companies were careful with their spending and cutting down activities, YTL Corp unveiled a RM150 million plan to turn Bukit Bintang into a prominent tourist and shopping destination. YTL Land also bought Tangs Department store in Kuala Lumpur from a Singapore retailer for RM77 million, a move which marked the exit of Singapore's C.K. Tang Ltd from the Malaysian retail market and reflecting YTL's confidence in the domestic retail and hospitality industries.

When asked on the rationale of the purchase, Yeoh said Kuala Lumpur was one of the most under-retailed cities in Asia and had enormous potential compared to Hong Kong and Singapore as its hotels, food, rental, transport and currency were very competitive.

He had said: "We need to exploit the country's strong fundamentals, affordability and the fact that visitors can feel safe and welcome here. We don't lack the ability to be the world's best in the hospitality industry." YTL had also spent about RM650 million for strategic assets, including the Ritz-Carlton Hotel in Bukit Bintang. It also owns 50 per cent of Express Rail Link.

Yeoh has certainly kept the lessons learnt in his younger days close to heart, using it to imporve his management skills.

At YTL, management is very much hands on, the senior Yeoh still puts in long hours and the junior Yeoh himself keeping a close eye on daily operations through weekly meetings with his senior managers.

It helps that Yeoh's six siblings also sit on the board. The Yeoh family certainly works to keep itself at the top of the corporate ladder.

Yeoh is among Malaysian tycoons whose businesses have blossomed under the country's positive business policies.

?New Straits Times (M) Berhad




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