Lion Group’s China operations performing well

  • Business
  • Wednesday, 26 Mar 2003

LION group's China operations in the retail, brewery and motorcycle sectors are doing well and looking for opportunities to expand, said group chairman and CEO Tan Sri William Cheng. 

“Parkson China and Malaysia are doing quite well,” he told StarBiz. “In Malaysia, it is one of the top retail chains that is making profit.” 

Lion has 30 Parkson stores mostly on joint-venture basis in China. In Malaysia, it has 25 stores and five super centres under Parkson. 

“The buying power is very high in China. Parkson is the leading department store chain in China and is doing very well in Beijing and Shanghai, partly because of their good locations. Next year, we hope the government there will be more relaxed and allow us to open a few more outlets,” said Cheng. 

Pointing to the brewery market, he said it was five times that in Malaysia. Out of a capacity of 1.6 million tonnes per year, Lion is producing 1.2 million tonnes per year from a total of 12 breweries. Operating from five provinces, Lion takes top spot in the brewery markets of Zhejiang, Hubei and Hunan. 

On the whole, Lion's brewery business in China has dropped from second to fourth spot in the fast-developing sector but it is still operating comfortably and competitively. 

“In China, the government is consolidating sectors by picking good companies and developing them. Within the brewery sector, there are other government-controlled companies that inject funds to develop the companies. We have slowed down our expansion but based on tonnage and profits, our brewery business is still improving,” said Cheng. 

Lion has three motorcycle production plants in Zhejiang, Nanjing and Changchun. Last year, the plant in Zhejiang produced 860,000 motorcycles, Nanjing (400,000) and Changchun (80,000). 

It occupies second spot, coming close to the top producer, a group called the Shantung group, which had 1.5 million units out last year. 

“We are fighting very hard to improve our market share by 10% to 15% in the motorcycle sector,” Cheng said, adding that more locals would be employed to aggressively market the bikes. 

At the height of its investments in China, Lion is estimated to have poured in about US$800mil under various companies in Malaysia and Singapore. 

“We have been generally very successful in China except for a few cases of not having the wrong partners,” said Cheng. The group, which started investing in China in 1993, has built up its three core businesses and employs 40,000 people in China, including 40 Malaysians and some Singaporeans and Taiwanese. 

“In China, you have to learn very fast and rectify your mistakes. They have a different culture, attitude, philosophy and style of working. Generally, seven in every 10 Malaysians who go there can adapt to the local environment. 

“You need to have commitment. Sending junior staff or going by instruction while the heart is still not in the job, will not work.  

“They have to settle there, understand their culture, manage and push them, which means incentives have to be attractive,” he said. 

Lion has two listed companies in China; Zhejiang Qianjing Motorcycle Co Ltd is listed on the Shenzhen Stock Exchange and Anhui Jianghua Automotive Chassis Co Ltd on the Shanghai Stock Exchange.  

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