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Saturday September 16, 2006

Truly a saga


SUSAN M. Martin hit the nail on the head when she chose The UP Saga as the title for her 2003 book, which traces the history of United Plantations Bhd. The dictionary offers two meanings of a saga. Originally, the word refers to “a long story of brave deeds, especially of Icelandic and Norwegian origins”. 

These days, a saga is more commonly recognised as a story of a long series of events or adventures. In many ways, either definition aptly describes the story of UP. 

Tan Sri Borge Bek-Nielsen
The oil palm player's journey that started a century ago is indeed an intriguing tale of courage, vision, entrepreneurship and sturdy values. Fittingly, it has a distinct Scandinavian dimension – although neither Icelandic nor Norwegian – because Danish men have always figured prominently in the company's leadership. 

The first was Svend Aage Westenholz, who at 26, sailed to Bangkok to work as a civil engineer. He helped transform the city's infrastructure and in the process, became a wealthy businessman. 

He decided to diversify his investments in the Far East by establishing the Jenderata Rubber Company in 1906 to plant rubber on the banks of the Perak River. 

Four years later, his brother-in-law, Commander William Lennart Grut, joined him in running a business of rubber and coconut cultivation that eventually became United Plantations Ltd when Jenderata was merged with four surrounding estates. Westenholz was the company's chairman until his death in 1935. 

The two men were among the pioneers in the local oil palm industry. According to The UP Saga, it all started when Grut met a Dutch planter while on a sea voyage from Bangkok to Singapore. The Dutchman had an oil palm estate in Sumatra and invited Grut to visit. 

Grut did just that and realised that oil palm could be grown on UP's estates. In 1918, 20 acres of oil palm were planted at Sungei Bernam Estate. That went well and eight years later, UP financed one of the first commercial oil palm cultivation projects in Malaya. 

Grut succeeded Westenholz as UP chairman, and was at the helm during some of the company's most trying episodes. These tough years included the Great Depression and World War II. 

Grut's cousin, Niels Benzon, assumed the chairmanship in 1949 before Grut's son, Olof, took over in 1963. The younger Grut and his brother, Rolf, were equally important players in UP's history, because they were deeply involved in the company's management.  

Olof was chairman until 1978. That honour then went to another Dane who became a highly respected figure in the Malaysian palm oil industry. 

Tan Sri Borge Bek-Nielsen came to Malaysia in 1951 to be an assistant engineer in UP. Twenty years later, he had risen to senior executive director, and from 1978 to 1982, he was UP's chairman. He had also become a majority shareholder of UP and a strong industry spokesman. 

Founder Svend AageWestenholz
In the introduction to The UP Saga, Susan M. Martin wrote: “A distinctive culture of enthusiasm for innovation and an imaginative approach to business strategy have enabled UP not only to survive the many political and economic upheavals of the 20th century but also to inspire others within the Malaysian palm oil industry. 

“Over a period of 50 years, one man in particular, Borge Bek-Nielsen, has been exceptionally successful in sharing his passion for quality and his vision of growth through intra-Asian, and not just Western-oriented, trade.” 

He died on Sept 23 last year, and his sons, Carl and Martin, now represent the family, which has a 44% stake, in UP. The Bek-Nielsen brothers and Ho Dua Tiam, who joined UP in 1964 as a cadet planter, form the company's executive committee. 

UP's current chairman is Tan Sri Dr Johari Mat, a former senior civil servant. His immediate predecessor was Tan Sri Basir Ismail, who was said to have worked well with the senior Bek-Nielsen to drive UP's growth. The UP Saga has a chapter, called Building Bridges Between Nations: Two Tan Sris, which focuses on what the two have achieved together. 

That partnership has continued to the second generation; Basir's son, Ahmad Riza, is an independent director of UP.  

This illustrates the point that the UP story is not merely about how several intrepid Danish men have prospered far away from home. Carl tells BizWeek that part of UP's work is to foster close relations between Malaysia and Denmark. 

He says, “We've always felt welcome as investors. Malaysia is kind to her investors and encourages closer bilateral ties with many different countries, reflecting true statesmanship, and we look forward to building stronger ties between Malaysia and Denmark. 

“This is very important to us. When people work together, they achieve a lot of synergies and leverage. As a result, you normally end up with better ways of doing things.” 

That is why, he adds, it is essential to continue investing in the growth and performance of UP in Malaysia, instead of sitting back and reaping the returns. 

After going through the company's records, Susan M. Martin confirms in her book that UP's shareholders have consistently ploughed back much of the profits into assets in Malaysia or that are linked to Malaysia. 

“Furthermore, the investments they have made have often embodied striking technical improvements, both in planting materials and in processing machinery, that have been successfully linked to an innovative and flexible marketing strategy,” she wrote. 

“The wealth generated by the firm has thus been produced through real economic progress, and not as a by-product of colonial patronage.” 

Related Story:
Viking values thrive at United Plantations
 

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