The Star Online: Business
The Star Online: Business |
| Posted: 21 Dec 2012 06:41 PM PST PETALING JAYA: K & N Kenanga Holdings Bhd has proposed to acquire a 100% interest in ING Funds Bhd. In its filing to Bursa Malaysia, Kenanga Holdings announced that its unit Kenanga Investors Bhd via Kenanga Investment Bank Bhd had entered into a conditional sale and purchase agreement (SPA) with ING Funds. ING and its joint-venture partner Tab InterAsia Services Sdn Bhd own ING Funds, with a 70% and 30% stake each. ING Funds is a corporate cash management solutions and discretionary mandates provider to clients in the institutional space. "This is a compelling strategic acquisition which will give Kenanga Investors a synergistic platform to adopt global best practices, augment its product portfolio and expand its distribution network to support customers," said Kenanga Holdings group managing director Chay Wai Leong in a statement. According to the statement, Kenanga Holdings said ING Funds has a strong emphasis and foothold in the retail segment, which would complement Kenanga Investors' focus to accelerate growth in that segment. The proposed acquisition has yet to receive the relevant regulatory approvals, but both parties expect the acquisition to be completed by the end of the first quarter in 2013. It is notable that the percentage ratio for the proposed acquisition is no more than 5%. The assets under management of both entities would amount to approximately RM5bil. Kenanga Investors is a multi-team, multi-style investment house that provides investment solutions to retail and institutional clients. The ING Funds acquisition would be the Kenanga group's second acquisition within a year. The group via Kenanga Investment Bank recently completed the acquisition of ECM Libra Investment Bank Bhd, which makes it the largest independent investment bank in the country in terms of trading value and volume. Kenanga Investment Bank had bought ECM Libra for RM875mil via a combination of cash, shares and loan stocks. The cash portion amounted to RM659.6mil, while the remaining RM215.5mil was via the issuance of 120 million new shares of RM1 each, and RM95.5mil in redeemable non-convertible unsecured loan stocks. The merger also placed Kenanga Investment Bank as the third-largest brokerage in the country with a market share of 10.42%. The entire rationalisation process between both entities was expected to take between nine and 12 months to complete. Chay had earlier said that the combined operating costs of merging both entities would amount to approximately RM250mil, and should yield savings of about 30% over the next three years. The local financial industry has seen quite a few mergers and acquisitions this year, led by the RHB Capital Bhd-OSK Investment Bank Bhd merger and then later CIMB Group Holdings. RHB Capital completed the acquisition of OSK Investment Bank on Nov 9, 2012. The group had earlier said the acquisition had enhanced its products offerings and geographical footprint into eight countries across the Asean region, including Hong Kong. The acquisition has made the banking group's investment banking arm, RHB Investment Bank Bhd, the largest in the country in terms of assets. In April, CIMB Group bought the Royal Bank of Scotland Group Plc (RBS)'s Asian operations for RM432mil. This included RBS' Australian cash equities, equity capital markets and mergers and acquisition businesses. CIMB Group plans to use this acquisition to regain its position as the world's top sukuk arranger.
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| Posted: 21 Dec 2012 06:35 PM PST ONE of Malaysia's most inventive but less well-known companies is located at the backend of Senawang Industrial Estate, 15 km south of Seremban. But RBM Building Machinery Trading Sdn Bhd's quiet days will soon be over. The world will soon be hearing more about its invention that promises to revolutionise the way buildings are constructed. Reduce construction cost by 20%? Improve construction site productivity by 300%? Amazing claims by any measure. But Goh Chua Woo, inventor of the technology, who is also managing director of the company, says this is not a boast. "In this business, everything can be tested and everything can be proven. We stand by all that we say." He has a list of customers here and overseas who have built houses the RBM way and saved a lot of money in the process. "Ours is a proven technology," Goh says. "We began marketing it two years ago, and a lot of time has been taken getting our products tested and certified by agencies such as Sirim and the Fire Department. "Now we are ready to make a big push to educate potential customers and explain how they can build faster, better and cheaper and become more competitive," Goh adds. Inventing from an early age Goh began as an inventor at an early age. His father was a fisherman in Pontian and when the engine of his fishing boat broke down, he often had to repair it himself. "I used to observe my father doing this and I learned a lot from him. That's where I learned about nuts and bolts and how machines worked. You can say my education on mechanical equipment was hands on'," Goh says. "I finished schooling in Johor Baru and when I was 22 years old, I started my own business designing and making customised food processing machines. "My first invention was a cendol-making machine. I charged my customer RM1,600 for it. He was happy because the machine could produce for him in one hour what used to take a whole day to make. "Then I went on to design and make other food-processing machines to make noodles, koay teow, chilli sauce, bean curd, and so on. This business is still going on today but, of course, it has been overtaken by our building construction business." But how did he get involved in this business in the first place? He had no previous experience in building construction. Neither did he have any formal training in building science. "Malaysia was experiencing a building boom in the mid-eighties and contractors were under pressure to complete their projects on time. Some friends approached me and asked me if I could find some way to shorten the construction cycle," Goh says. "That's when I started to do my research on the construction process the materials used, the steps they go through, the time it takes, and so on. "We experimented with various prototypes to handle different aspects of the construction work, and to make a long story short, it took us about ten years to develop the RBM-1000 mixer. This is the core component of our building technology. In 2007 we received a world patent for this equipment. Marketing the technology Goh is absolutely confident the RBM-1000 is a world beater. There is nothing like it anywhere in the world, he says. His biggest challenge now will be to educate potential customers and make them understand how his technology can make a difference . "We have been in the market for two years. People visit our website and then contact us. We have found marketing through trade fairs and exhibitions arranged by Matrade very effective. When you appear under a Matrade umbrella, people tend to have more confidence in you, and we have been able to secure many overseas contacts this way," Goh adds. "We have also won many industry awards, including Miti's Product Excellence Award, the Golden Bull Award, and the SME Innovation Excellence Award. These awards have enhanced our reputation and credibility. Sales topped RM11mil last year, with 70% of income earned overseas. "We have encouraging responses from different parts of the world. Many told us how our technology has helped them to save time and money. A customer in Mongolia told us our foam concrete is a good insulator and kept the cold out very well. And we also have this customer from the Middle East who said the same thing this time it helped to keep the desert heat out! But how does RBM explain its relatively low level of sales in the domestic market? One suspects the company has not done enough to convince local developers, building consultants and contractors about the merits of its technology. But Goh has a different explanation. "What we are facing is a typically Malaysian response: people are just waiting to see how other people take to the machine before they commit themselves. So they adopt a wait-and-see attitude. "But I am confident this attitude will change once customers understand how RBM can help them to reduce costs and make more money," he adds. "What the RBM-1000 does, essentially, is to give the small contractor the capability of a big-time contractor but at a fraction of the cost," Goh says. "It's like computers. You don't need a mainframe or desktop when a laptop can do just as well. "Same thing here. You don't need huge batching plants and ready-mix concrete trucks to undertake many of these construction jobs anymore. Our system can do an equivalent job, and it costs so much less. "And the good news, of course, is that now every contractor can own a RBM-1000." ● This article is part of a series on Winning Companies companies that have achieved outstanding success by being creative and innovative. Research for this article has been supported by the International Trade and Industry Ministry to promote discussion of the impact of change and innovation on the competitiveness of the manufacturing industry. Related Story: |
| MAS to re-energise products in Europe next year Posted: 21 Dec 2012 06:34 PM PST FLAG carrier, Malaysia Airlines (MAS) is not likely to launch any new route to European countries anytime soon but will continue to re-energise its products in Europe next year, according to regional senior vice-president UK/Europe Huib Gorter. "We've got some exciting plans for next year. There will be a lot of buzz coming from MAS. Additionally, we will be flying the A380 for KL-Paris-KL route in March 2013 on top of the current KL-London route," he tells StarBizWeek in Amsterdam. With the new A380 plying KL-Paris-KL daily route, Gorter expects the new product will attract customers to fly with MAS just like they did in London. MAS has increased its daily A380 flights on the KL-London route to twice daily. It will begin daily A380 operations on the KL-Paris return route from March 1, 2013. Despite the larger capacity on the jumbo jet, Gorter expects KL-Paris route load factor to average about 80%. He adds that the KL-London-KL flights on A380 had been averaging about 80% load factor. In 2003, MAS ordered six A380 but delivery had been delayed for a while. It finally received the first A380 in June. So far, it has received four aircraft and will be receiving the balance next year. The A380 has a capacity of 494 seats in a three-class configuration comprising eight first-class seats and 350 economy-class on the main deck, together with 66 business-class seats and 70 economy-class seats on the upper deck. "One of the key things is to price your products creatively and at the right time. We have very good airlines competing with us and we can never ever lose sight on the ball, we have to be on top of that and I think we have done it quite well," Gorter says, adding that its business plan for Europe was to develop traffic to home base. Additionally, he says, MAS works with various groups including Tourism Malaysia, Sabah and Sarawak Tourism, hoteliers and tour operators. Gorter points out that there is "no lack of capacity" flying from Europe to Malaysia and one of its challenges is to move ahead of the curve. The are sufficient direct flights from Europe to Malaysia (including code sharing) with 17 from Amsterdam, Frankfurt (nine), London (14), Paris (daily) and Istanbul (3), of which 14 of the direct flights are operated by MAS. UK is MAS' biggest market in Europe followed by Paris and Amsterdam. "We have to be very quick and competitive. We need to have strategies and we have estimated about 122 European tour operators will feature Malaysia in their brochures and online sites," Gorter says. On competition from airlines, he says consumer trends is hard to predict these days because consumer trend changes fast. "One minute they could be looking at travelling to Malaysia and the next it could be other destinations. It is a challenge for everyone. We have to act very quick and price our products well. Its mind-boggling," Gorter says. As brand loyalty poses another challenge, Gorter says MAS entry into oneworld alliance is timely. MAS will become a full member of oneworld alliance effective Feb 1, 2013. He points out that the industry is experiencing a declining brand loyalty so there is a need for a "constant reinforcement" for the brand. "Enrich (MAS' frequent flyer programme) is great but Enrich itself is not the key driver (for brand loyalty). With oneworld alliance, travellers flying British Airways or member airlines will be able to accrue flying miles," Gorter says, adding that the new oneworld alliance will allow MAS to enter the corporate market in Europe, which has great potential. Although there is only one MAS' Golden Lounge in London in Europe region, Gorter says there is no plan to set up lounges in other European destinations MAS flies to such as Amsterdam and Paris. "We have third party contract to allow passengers on business and first class to gain access to these lounges. We're not setting up Golden Lounges ... not at this point," Gorter says. He proudly says MAS' business class product is second to none. "We're a very good airline," he adds. Last year MAS announced a major route rationalisation to stem losses. The rationalisation takes effect early this year and involves the withdrawal of loss-making flights from Kuala Lumpur to cities that include Surabaya, Karachi, Johannesburg, Cape Town, Rome and Buenos Aires. Gorter describes the KL-Rome route cut as a very "painful" exercise as a need to achieve its revenue target and stem losses from low-yield route. "We made the decision to drop non-strategic routes and Rome was one of it. Life is tough," he reckons. Gorter says MAS is "a lot better" now. "We have started to get profitable on some routes." Despite the uncertainty in the eurozone economic outlook, Gorter sees next year as an excellent one for MAS in Europe as the A380 aircraft will definitely enhance MAS' brandname. "The uncertainty makes it even more challenging in an industry which is so competitive. There are still a lot of travel between Europe and Asia despite the potential slowdown in economy," he says.
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