The Star Online: Business
The Star Online: Business |
- Leo Burnett earmarks core initiatives
- See family still holds court in Kian Joo
- Developed nation in the total sense
| Leo Burnett earmarks core initiatives Posted: 14 Mar 2014 09:00 AM PDT LEO Burnett Group Malaysia, the top three advertising agency in the country, has earmarked some core initiatives which will further fuel its growth in the competitive advertising industry. The initiatives involve banking on specific areas like organic growth through cross-selling of existing services, providing new specialised offerings, stepping up its business-to-business communications and opening its avenue for acquisitions. Its CEO Tan Kien Eng in an interview with StarBizWeek says the focus this year is to continuously raise the creative bar as its services expand beyond existing clients. The agency is known for creating award-winning campaigns, such as those for Petronas, Samsung, and McDonald's (top four pics). The latest Petronas campaign created by Leo Burnett Malaysia entitled Young Hearts (bottom six pics) was a huge hit in the country when it was launched in January this year with over 300,000 views within two days. The campaign continues to hit 2.5 million views on the Petronas official site alone. Its list of clients, besides reputable names like Petronas, Samsung and McDonald's, includes Tenaga National, P&G, Maybank and YTL. Apart from this, he adds, Leo Burnett has set up a third agency, Alpha 245, to manage conflicting businesses more effectively as certain business categories or segments are more sensitive than others. Alpha 245, a boutique agency under the Leo Burnett network, is an independent agency with a separate set of resources and support systems, has grown in terms of staff strength akin to a mid-sized advertising outfit, since its inception about two years ago. He says it has 45 staff members from 12 initially and plans are ahead to increase the number to service more clients as well as handle conflicting businesses. Its revenue jumped by more than 100% since it was formed and its clients include notable blue-chip brands like Carlsberg brands (Somersby and Kronenbourg 1664), Ikea, Pfizer, YTL, The Sunway Hospitality Group, University Malaysia of Computer Science and Engineering and Royal Brunei Airlines. Arc Worldwide, a business division within the Leo Burnett group globally, has allowed the group to give new offerings to clients in terms of specialisation and innovation. "We are taking steps to further fuse the Arc Worldwide brand with Leo Burnett. This is necessary because all the services found within Arc Worldwide such as digital and mobile marketing, shopper marketing, activation, public relations, social media, CRM and design are now part of Leo Burnett's approach to creating powerful narratives for brands through story telling. At the end of the day, we want to help our clients build purposeful brands,'' Tan says. Creating campaigns or developing brands on corporate social responsibility (CSR) is another initiative the agency is working with its clients. He says the agency is helping clients to align their CSR initiatives according to their brand purpose. It is no longer enough for a brand to just offer useful, relevant, entertaining product and services. For example, a financial services brand could create a product or cause that take in the form of wealth creation and poverty eradication," he says. Leo Burnett is also intensifying its work to include business-to-business communications or what is referred to as specialist-to-specialist. Tan says this requires a deep understanding of what appeals to the business decision makers which is slightly different from business-to-consumers. He says there are plans to acquire a digital agency locally to grow its revenue and capabilities in digital work to complement its existing digital offering. At the moment he says it is "still shopping" around for one and is researching on it. On the agency's performance this year, Tan adds, revenue has been growing by double digits over the last few years and will continue this year. "As a business, we need to continue to grow and invests in the growth of our people. This include areas like training specialise skills, especially in the area of digital and creativity. Last year, we spend about RM1.2mil in training alone. In the last three years, Leo Burnett Malaysia has been one of the top three performing offices for the group in the region. "In terms of size, the Malaysian office is almost the same size as the group's office in India. We have close to 290 people in our Malaysian office compared with an average multinational ad agency in the country which has 50-150 people,'' he adds. On creativity, Tan says Malaysia tends to lose out on retaining talent, for example, to Singapore and China. This is partly because of the weaker local currency (compared with Singapore) and smaller creative budgets in comparison with China and other countries. A smaller budget will limit production exploration and the use of new techniques to producing the work and provide new experience for consumers, he points out. Leo Burnett Group Malaysia won several regional awards last year. It rose over regional rivals to clinch Gold awards for South-East Asia PR Agency of the Year 2013, South-East Asia Planner of the Year, and runner-up for South-East Asia Agency Head of the Year at the Campaign Asia-Pacific's awards held in Singapore last year. The ad agency also retained its No. 1 position as Malaysia's Digital Agency of the Year at Campaign Asia-Pacific's awards, and claimed the Silver award for Malaysia's Creative Agency of the Year, making Leo Burnett's Kuala Lumpur office the most awarded Malaysian creative agency in South-East Asia. |
| See family still holds court in Kian Joo Posted: 14 Mar 2014 09:00 AM PDT Bidding war looms over takeover HAVING a competing bid for their company is the kind the stuff shareholders dream of. In this respect, shareholders of Kian Joo Can Factory Bhd have nothing much to complain about. After years of being in the doldrums because of an over-hang in its shares due to internal dispute among the major shareholders and a tough operating environment, the company is coming closer to the realisation of its full value, thanks to two prospective offers for its assets and shares. Following years of boardroom and court room battles, a block of 32.9% in Kian Joo, which belonged to the See family – the founders of the can manufacturer – was sold to Can One Bhd at RM1.65 per share in January 2012 following a liquidation process. Some members of the See family are still fighting the liquidation process but Can One, the only other notable can manufacturer in the domestic market, effectively swooped in and took control of the industry. In November last year, Aspire Insight Sdn Bhd, a private company that is a joint venture between Chee Kay Leong and the Employees Provident Fund (EPF), made an offer to acquire the assets and liabilities of Kian Joo for a total of RM1.47bil, valuing each share at RM3.30 each. The EPF owns around 10% in Kian Joo and has been a long time shareholder of the company. Some of the minority shareholders, such as the See family that is said to be collectively holding 15% or more in Kian Joo, were not happy. Hey, but then, this is the corporate world where very rarely are deals done on a win-win basis. The offer from Aspire Insight may undervalue the company, but that is how the game is played. The predators – Aspire Insight in this case – are likely to have made their offer at that price because they need to leave "something on the table" for themselves to earn a return after taking over the assets and liabilities of the firm. Aspire Insight is a formidable force. Chee is a seasoned hand in the can manufacturing business having been in various positions in Can-One since 1977 while EPF had the balance sheet to bankroll the takeover. After Can-One took over Kian Joo, Chee was made executive director in Kian Joo to take charge of operations. In fact, he had resigned from all positions in Kian Joo only a day before Aspire Insight made the move for the company. This in some way turned the offer into a management buyout and allows Can-One to vote in the deliberations if Aspire Insight's offer goes to shareholders. Everything seemed to be heading towards a done deal for Aspire Insight until last Monday. The dynamics for Kian Joo changed after Toyota Tsusho Corp (TTC), an entity from Japan with cash of RM12bil as at March 31, 2012, made an offer to buy up the shares at RM3.74 each. TTC's offer is a cash deal, subject to the company doing a due diligence and it getting 51% acceptance. The offer is clean, which means shareholders who accept the deal take their money and walk away. But TTC's offer for now is only an expression of interest and yet to be considered a firm offer. That can only happen if Kian Joo allows TTC to conduct a due diligence. Nevertheless, TTC's offer has given existing shareholders some extension of time to get a better price. On Thursday, the board of Kian Joo pushed to March 31 the deadline for Aspire Insight and the listed company to sign a definite agreement on the former's offer. The timing of TTC's offer, which is just three days before Aspire Insight and Kian Joo are due to sign a definitive agreement, seems to suggest that there is a bigger game in play in the can manufacturer. TTC is a big name and to some extent cancels out the EPF "wow" factor in Aspire Insight. TTC has interest in the can manufacturing business because it has a 30% stake in Indonesia's PT Hokkan Indonesia. If TTC makes a firm offer by end of the month, Aspire Insight has no choice but to up its offer if it still wants to take over Kian Joo. But will Aspire Insight go into a bidding war? That decision will largely lie with the EPF. At RM3.74 per share, the provident fund may not be keen on accepting the offer from TTC. At the same time, it may opt not to go into a bidding war. The fund has already attached a fair value of RM3.30 for each Kian Joo share in the form of its offer price to buyout Kian Joo. How can it justify making a counter offer at a higher price now, solely because there is a competing offer? Can-One would not lose out if the TTC offer comes through because it acquired the block in Kian Joo for RM1.65 per share in January 2012. At RM3.74 per share, it stands to make a gain of RM305.41mil, which is not too bad for an investment that it has been holding for just over two years. If the TTC deal comes through, a big winner would be the minorities of Kian Joo, especially the See family because of the higher price tag attached to the company. Apart from getting a higher value for their interest in Kian Joo, TTC would probably count on them to run the business operations here because they know it so well. So, it seems the See family still holds court in Kian Joo. |
| Developed nation in the total sense Posted: 14 Mar 2014 09:00 AM PDT FORMER Prime Minister Tun Dr Mahathir Mohamad is right. The proponent of Vision 2020 this week said the ultimate goal of Vision 2020 will not be achieved. He attributed the reason to the fixation with labelling Malaysia a developed nation based on its income levels by 2020. The idea is that should Malaysia achieve a gross national income (GNI) per capita of US$15,000 (RM49,175) by 2020, it would meet the World Bank's threshold of a high-income economy by that time. The plan to drive income up to that level is via various economic spurring investments, particularly in clusters called National Key Economic Areas. Aiding that plan are the Strategic Reform Initiatives, and by investing and spending vast amounts of money, incomes too should sprint towards that threshold number by default and design. It would appear then that the common factor in achieving high-income and developed-nation status is money. But that is where it ends. Vision 2020 is not all about the money. When Dr Mahathir spelt out Vision 2020 in 1991, he asked aloud just what was a fully developed country? "Do we want to be like any particular country of the present 19 countries that are generally regarded as 'developed countries'? Do we want to be like the United Kingdom, like Canada, like Holland, like Sweden, like Finland, like Japan? To be sure, each of the 19, out of a world community of more than 160 states, has its strengths. "But each also has its fair share of weaknesses. Without being a duplicate of any of them, we can still be developed. We should be a developed country in our own mould. "Malaysia should not be developed only in the economic sense. It must be a nation that is fully developed along all the dimensions: economically, politically, socially, spiritually, psychologically and culturally. We must be fully developed in terms of national unity and social cohesion, in terms of our economy, in terms of social justice, political stability, system of government, quality of life, social and spiritual values, national pride and confidence," said the-then Prime Minister all those years ago. Just take a look at countries that have a high GNI per capita and you would see many that have progressed in not just monetary terms. The question is: Where do we stand as a country when it comes to the non-monetary indicators or benchmarks? Malaysia surely has been improving on its competitiveness. Red tape has been cut and the ease of doing business has improved. In fact, the wheels that grease the economy is always the focus of authorities, constantly being tweaked and improved to ensure businesses and investments continue to prosper. There is nothing wrong in that, as one of the main responsibilities of any government is to provide jobs and security. Healthcare is also a plus point in our efforts thus far, given the depth and universality of coverage. As a matter of fact, in some ways, glimpses of the high-income status are already on display. Some would say that Kuala Lumpur's GNI per capita is well above the US$15,000 average, but for those who reside in the city, does the capital feel like a high-income country? In terms of social, spiritual, psychological and cultural benchmarks, there is, in fact, a long way to go. High-income countries are essentially places where the general feeling is that things work. Sure there are hiccups, but in general, they function in a far better manner than the average. Socially, there is much more apathy in society than what most developed countries exhibit. Culture is also not a strong point in Malaysia, as although diversity is there, the promotion and appreciation of culture, and by extension the immersiveness of it in various layers of society, is shallow. Although literacy is high, people also lament the declining standards of education. Science and technology are not promoted enough and the big problem is that not many students are interested in studying science, even in secondary schools. It's time efforts are also made towards elevating the soft infrastructure in Malaysia for the country to be classified as a developed country instead of just a high-income nation. Business editor (features) Jagdev Singh Sidhu feels there should be inclusiveness when it comes to development and progress. |
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