Eastern & Oriental Bhd (E&O) is embarking on a new chapter with the entry of Sime Darby Bhd as the single largest shareholder of the company. What will happen next and how will the momentum that has led to the growth of E&O be following a big change in ownership? E&O deputy managing director Eric Chan Kok Leong replies to StarBizWeek's ANGIE NG on the growth direction for the company following Sime Darby's acquisition of a 30% stake in E&O.
With Sime Darby's recent purchase of a 30% stake in E&O, what will be the game plan for the company going forward?
E&O has successfully built a strong portfolio and visible premier niche brand in the property development, hospitality and lifestyle segment in Malaysia. Having established ourselves locally, we intend to push the boundary further by making E&O an aspirational brand that is recognised locally, regionally and eventually internationally.
In our various joint ventures and partnerships, E&O seeks to align itself with leaders and giants within respective industries, whether it is in terms of award-winning architects for our developments, in launching new products with CIMB-Mapletree, or the most recent marketing collaboration with Japan's largest zaibatsu, Mitsui Fudosan.
That ideology extends to the development of a wellness township in Medini Iskandar via a joint-venture (JV) with Pulau Indah Ventures Sdn Bhd. Pulau Indah Ventures is a 50:50 JV between Teluk Rubiah Ventures Sdn Bhd, a wholly-owned subsidiary of Khazanah Nasional Bhd, and Aneto Investments Pte Ltd, an indirect wholly-owned subsidiary of Temasek Holdings Pte Ltd.
Sime Darby's entry into E&O, is therefore consistent with this strategy, given that we now have as our new cornerstone shareholder, Malaysia's oldest and largest conglomerate. Sime Darby is recognised worldwide for their financial strength, considerable landbank and extensive network.
With such a prominent investor on board, the horizons for E&O expands at an accelerated pace which otherwise would not have taken place had the status quo remained.
What are some of the immediate and medium term plans Datuk Terry Tham has for himself and for the company?
Does he intend to stay beyond the third year, and what are his longer term plans as a property developer?
Datuk Terry Tham's position has only changed in that he has reduced his personal shareholding in the company. Datuk Terry has helmed the company from the outset and remains fully hands-on in E&O's operations as its managing director, continuing to set its vision as well as monitoring and guiding ongoing projects across the group's three core business divisions, which are property development, property investment and, hospitality and lifestyle.
Now with Sime Darby as E&O's new cornerstone investor, his long-held aspirations to grow E&O into an internationally recognised brand, has given him greater impetus and motivation.
E&O has built up a strong brand name as a niche developer in the Klang Valley and Penang. How can it progress further from here?
In early 2000, after a deliberate survey of the property market, it was decided to position E&O in the premium niche market segment, as opposed to township development where others had already established themselves. This strategy has augured well for E&O, evidenced by the healthy take-up rates of our properties and our ability to benchmark prices at each prevailing time of launch.
The E&O brand is now synonymous with premier developments, and we have been complimented that E&O adds the distinct style' ingredient into lifestyle'. Again, we came to secure this reputation by no accident it was a conscious strategy that we worked hard towards.
Today, the E&O Group is supported by an eight-pronged lifestyle portfolio, which includes our namesake heritage Eastern & Oriental Hotel (listed as one of the must-visit destinations in the New York Times bestseller 1,000 Places To Visit Before Your Die by Patricia Schultz), the newly refurbished Lone Pine Hotel (picked by travel portal TripAdvisor as one of “the top 10 boutique hotels in the world” in its category), the retail mall, marina operations, performing arts centre and convention centre at Straits Quay, serviced residences that bear the hallmark of E&O hospitality, merchandising as well as food and beverage via the Delicious Group.
These are pillars that truly differentiate E&O as a unique brand and substantiate our claim as a truly holistic premier lifestyle developer.
What are some of the synergistic benefits that the two companies can leverage on, and what should be their areas of focus - in terms of product types, market presence and business forte?
There are numerous possibilities for us to work together. For instance, we could enhance our market presence in locations where each party has no presence, tapping on marketing channels, service providers, market intelligence in products or even JVs to develop land in new locations. There is also the opportunity to deepen and broaden the technical capabilities of both parties in innovation and product design and to create new property products and sale opportunities.
We could also expand internationally, either together or through strategic alliances with other global property companies to increase their brand value and presence. We can also develop new growth engines from existing and new markets.
Beyond property development, we could also explore the possibility of leveraging on each other's hospitality capabilities. These are just some areas for possible collaboration.
We will have a better picture when the two parties eventually sit down to carve out specific projects for collaboration.
How will the Sime Darby-E&O deal impact or benefit the respective companies in terms of its staff strength and its project plans - will there be any changes in the pipeline?
Let me share with you E&O's Key Performance Indicators (KPIs) that map out our direction going forward:
Achieve regional and international exposure of the E&O brand; Secure strategic alliances and collaboration with well renowned international institutions; Develop new growth engines; Deliver significant bottom line growth and sustainable profits; and Attract, retain and motivate talent across the group. As you can see, our KPIs touch on the intangibles to the tangibles in value creation for E&O, from continued efforts in brand building to employee engagement, while never losing focus on the bottom line and balance sheet.
As for staff strength across the E&O Group, our numbers already surpass 1,000 and are increasing in response to new projects such as Medini Iskandar, the expansion of Delicious outlets (which will make its debut in Singapore Scotts Square this November), which go toward bringing new opportunities and careers to the employment market.
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