PETALING JAYA: Berjaya Corp Bhd (BCorp) will be undergoing a reorganisation into five main business sectors as it morphs into a consumer group from its existing conglomerate status.
The business segments will be reorganised under retail, food and beverage, property, hospitality, and services, each to be led by respective sector heads with oversight from the group chief executive officer Jalil Rasheed.
There will also be a clear separation of BCorp’s strategic role and the operational roles of the companies, a line that has been blurred over the years.
These are part of the three-year strategic plan (2021-2024) announced by Jalil yesterday.
“The vision is really to become a global consumer group. The mission is obviously to unlock the business value.
“The group is undervalued and it’s undervalued for a reason because despite the great brands that we have, the way it is organised in the group right now as a conglomerate makes it very difficult to kind of pinpoint and value the group.
“We don’t need to be everything for everybody. We need to be a lot slimmer, focused and put in processes that allow us to move much quicker, ” he told a virtual media briefing yesterday evening.
The strategic plan will anchor around five key pillars to drive operational efficiency and execution namely profitability, governance, process, people and digital.
Jalil said the strategic plan is a combination of improving and restructuring certain things and establishing some from scratch.
“My assessment is, we’re probably about 70% there. Most of our companies have strategies and KPIs.
“It’s really about tweaking it so that everyone is aligned and sailing in the right direction, ” he said.
Jalil, who is just three months into the CEO role, also announced major restructurings that will include the closure of 60 dormant companies, a target to reduce the group’s RM5bil debts by half in three years, divestments and some deals in the pipeline.
BCorp will also put a dividend policy in place on all the companies under it.
“This is so that we have a base recurring income coming in on an annual basis and not just rely on divestment gains every now and then.
“BCorp’s revenue and financial performance is an amalgamation of how well these companies that we own do, ” he said, adding that the dividend policy will differ among the companies depending on their size, requirements for capital expenditure and others.
This will be put in place immediately over the next financial year.
On the group’s divestments, Jalil said the target was between RM2bil and RM5bil over two to five years.
While the dormant companies and assets to be divested have since been identified, Jalil said it will only be revealed in due course.
On halving the group’s debts from RM5bil to RM2.5bil, Jalil said a lot of it would come from divestment gains and dividends from its companies.
Once BCorp addresses its debt level, it will then put in a dividend policy at the group level.
BCorp has also identified five to six companies from a wide range of sectors for potential merger and acquisitions (M&As), joint ventures (JVs) or initial public offerings (IPOs).
“We have established teams to look at it, what are the best permutations in which we need to raise money and divest.
“The timing needs to be right. The key to hit the divestment target is really dependent on timing.
“In the middle of a pandemic, it’s not the best time to go out there and do things. We will wait for the right timing. Things will recover and we’re in constant conversation on that, ” he said.
According to Jalil, Covid-19 has made BCorp rethink the sort of businesses it wanted to be in the future.
“Essentially, the overarching thing is we want to be in businesses where we can control our own fate in terms or pricing, being able to roll things out and we also want to make sure that these are businesses that will have scalability, that people will keep on continuing to come out there and buy things from us.
“It’s very blatantly obvious that we need to be profitable but we did not necessarily do that over the years and that’s something that we will fix to make sure that the KPIs are better aligned, ” he said, adding that if the pandemic were to prolong even further, the outlook may not be great for some of the timelines that BCorp has put in place.