Source: The Edge
My father made the decision to seek a better life in Nanyang (Southeast Asia), leaving his home village of Jinmen, which was then poverty-stricken. Because of his decision, I grew up in Malaysia, experiencing the world war and its aftermath.
Construction opportunities became available in the last few years of British rule after the world war. I worked on available jobs, initially dealing with the British district engineers, which also triggered my desire to improve my command of the English language.
Later, I was able to ride the tide of the newly independent and developing Malaysia. Circumstances were never perfect, but we worked hard to secure jobs and made great efforts to meet and surpass targets and expectations.
As the country grew, so did competition. It was always necessary to stay ahead of the curve and simply working hard was no longer adequate. We had to be innovative. In my early days as a contractor, I made it a point to make frequent visits to more developed countries to study their advanced methods of construction and I sought new equipment that was becoming available to facilitate construction in Malaysia.
As for my journey, it really started during the Japanese occupation. I finished my primary school in 1941 in a small town in Kuala Selangor. My education was temporarily discontinued during the war and I ran my father’s business.
How old were you then?
I was 13. I had no choice but to take over the business. We were lucky. My father hid a truck in the jungle when most cars and means of transport were destroyed during the war. We used that to transport things from Kuala Selangor to Kuala Lumpur and sometimes to as far as Melaka and Ipoh.
The war ended on Aug 15, 1945. School reopened and I went back. I finished my high school in Klang. Then back to Kuala Selangor to help my father. They were jobs worth RM30,000 to RM40,000 — not like today. He also sent me to Banting to run a quarry project. That was when I started dealing with the British engineers and after some time, I realised that I wanted to be a contractor.
I started my construction career in Banting. The government wanted to build an armoury store — one in Banting and one in Sepang — to keep the explosives and all that. They called for a tender. It was a small project.
I said I had no experience, but they said to try. There wasn’t much interest from other people and I was the only one who tendered. I managed to establish contacts and found out that the tender had a cap of RM10,000. So I submitted RM9,750 (chuckles).
I couldn’t make head nor tail of this sort of construction work, so I sought my father’s advice. I also engaged a carpenter to make a magazine (ammunition) store. I made a profit of RM5,000 from that job! I was just 22 years old. From there, I started my lifelong construction business.
I went back to Kuala Selangor after the quarry project was completed and we tendered for a school project in Salak Bernam. Those days, from Kuala Selangor to Tanjung Karang, there was a road, but from Tanjung Karang to Salak Bernam, there was none ... just a footpath that could accommodate a bicycle, no more. The British district resident engineer was furious he was not able to supervise, inspect and monitor the construction work and progress. Since it was a fast-track project, he had to agree for it to proceed.
I completed the project on time, which puzzled the British engineer. “How did you finish the project so fast?” he asked. “There’s no proper road!”
So, how did you do it?
I moved the heavy equipment and bulky materials using a tongkang from Kuala Selangor to the village and from there to the site, moved them on bicycles riding in pairs.
The British engineer was very impressed and we became good friends. After 1962/63, he was transferred to Perak.
After Merdeka, the government wanted to build many schools, so I tendered for those as well. At the time, I had tendered for a school in Gopeng. The same British engineer called me for that project. He trusted my work and me. He also promoted me to Class A contractor.
We started building many schools, police barracks, roads, low-cost housing. We were growing with the country. We built more than 100 schools throughout the country. I went everywhere looking for jobs, even places where we had to go by sampan. I was working very hard, if got job, I just go, lah!
In the early days, the road from Kuala Selangor to Salak Bemam was done by us. We filled it with red earth. I had 38 trucks then. We didn’t have any excavator. We used changkul. It was only in 1954 that we had a new excavator. Those days, people didn’t believe in excavators.
It is tough to build a corporate empire and at the same time preserve it for future generations as you and your family have done. What is the secret of YTL Group’s success? Do you have any advice to share with the younger generation?
There is no secret of success. It is just plain rationality, hard work and patience.
Education is also very important. It is the people who make things work and the brighter the people you have, the better. The fundamental building block is that my children had a good education.
During my time, things were difficult. You had to work hard and you needed determination and patience. And integrity — that’s important!
The oil crisis of the 1970s was a very difficult period. Building materials went up more than 100%. When you got a project with JKR then, there was no contingency for [cost fluctuations]. So you suffered a lot. When I tendered for the project, steel was RM380 to RM400. By the time I completed the project, it was RM1,100. So I had to sell all my assets to complete the project. I sold all my properties!
Datuk Yeoh Soo Min: Even though his projects were making losses, he didn’t abandon them. My mother also shared his conviction. She pawned her precious personal belongings to support him. They both stuck to their integrity.
Yeoh: After the crisis, I won a very big project to build the Bukit Jurga army camp that was based on the new prices. It was tendered for nearly RM10 million. At the time, Francis had just finished schooling at Victoria Institution.
He knew I was not financially ‘out of the woods’ and seeing himself as the eldest, he offered to forego his further education to join me at the company. I recognised the importance of a university education and so I said to him, “You must go! You need a qualification.” In 1973, he left for the UK to further his studies. Then after that, the rest of my children went.
Soo Min: To my father, education is very important, So was the need to master the English language. When we were studying in England, he would write to us in English. But then today, he regrets not having sent us to Chinese school! (laughs)
Yeoh: That’s my only regret (laughs). Education is very important. Even today, my wife is still teaching, especially teaching my grandchildren maths. Now, all my grandchildren are doing well in their studies! My wife works very hard for the family in this area.
We also have to be rational and understand the strength of unity, a virtue strongly emphasised in my family, from me to my grandchildren. We carefully nurtured and explained this value to our children and finally, we encouraged a democratically agreed consensus formula [on making key decisions relating to the business].
My wife, Kai Yong, formerly a Chinese school teacher, continues to instil Chinese family virtues in our third generation. She ensures harmony in the family and motivates all of us at the same time. She has been instrumental in identifying and shaping the roles of the various children in the business that they now run.
Above all, she convinced me at a very early stage to gradually distance myself from the day-to-day running of the business and leave it to the children. Now, having done all that, her attention has shifted to the grandchildren, complementing their respective parents’ love and guidance. My grandchildren have to start from scratch. They cannot come here to the company and expect to be CEO.
Soo Min: We treat them like any other employee. I was trained and qualified as an accountant in London. Yet, when I came back, my father had me working as a receptionist and operator in the company.
All my brothers came back and had to go to the work site and work with the workers there ... had to stay in the kongsi with them, eat with them, sing with them ... I was an operator and when I picked up the phone, I had to say: ‘Syarikat Pembinaan Yeoh Tiong Lay, can I help you?’ So long ago! It wasn’t like YTL now (laughs). Those were great days.
What we are teaching the children now is different. These are challenging times. What we are going through is unprecedented. Our children now, they are in uni ... during their school holidays, we send them to do internship at places like banks ... prepare them for the real world. The next generation has come in now and they have to go through the training.
Yeoh: I’m very happy. We have a united family.
YTL Group has managed to survive a couple of financial crises. How did the company ride them out and manage to grow despite the challenging times?
Yeoh: The first recession in the 1970s was the most difficult. So, from experience, I learnt. YTL takes a conservative approach and focuses on what it does best. It will only take on new challenges in a systematic manner, making sure risks are properly assessed and mitigation measures are in place.
Soo Min: After each one, you should learn a lesson. Now we thrive during recessions because we pick up investments at cheap prices. In the last recession, we picked up Starhill and Lot 10. And in 2008, there was PowerSeraya and Starhill REIT.
We are always on the lookout. Cash is king. But keep too much also (not good) ... you must maximise usage of your assets.
Yeoh: In the period leading up to the implementation of power privatising projects, we were actually very disturbed by the exuberance caused by the abundance of cheap foreign funds. When we were raising funds for the country’s first power privatisation, we were wary that adverse currency exchange rate movements might wipe out most of, if not all, the possible profits of the project.The impact of the previous oil crisis and the consequent steel price hikes left an indelible mark on us and were still fresh on our minds.
To mitigate this risk, we had to persuade the banks and the government to shift towards local currency financing to match the currency of the revenue stream. This move proved to be a significant and prudent decision, insulating the company against the risk of an appreciating foreign currency in the Asian financial crisis.
What prompted you to go into the independent power producer business?
Yeoh: That time was in 1992, after the nationwide blackout. Tun Mahathir wanted to privatise it. We didn’t have the experience at all. It was a big challenge. I dumped everything into one and went for it. If it hadn’t succeeded, I would have been in difficulty.
Then why did you take on such a big risk?
Yeoh: I have a friend in Hong Kong — Gordan Wu of Hopewell — who encouraged me. Then, he was also in construction but a project of his saw an accident. So he diversified into power plants. It was also an opportunity. I thought, “Okay, let’s try it”.
It was a greenfield project ...
Yeoh: Yes. Nobody dared to try it ... we finished it in 22 months. People couldn’t believe it. We bought it from Siemens and they didn’t believe us. ‘How could you have finished in 22 months? Impossible!,’ they said. Earliest is three to four years.
YTL is a cash-rich company. Tan Sri, is that your way of doing things? That cash should be there for emergencies?
Yeoh: When a big opportunity comes, we need some cash on standby.
There are many views and perceptions of family-run businesses. What is your view?
Yeoh: We have professional managers here. People say family business is not good, but that’s not true.
Looking back on your journey and the growth of the YTL empire, what is your fondest memory? Any experiences you would like to share with our readers?
Yeoh: First is the RM5,000 profit I made from my first project and second is the Wessex Water project we secured. After we got it, an English paper said: “Who the hell is YTL?” (chortles). We beat the Royal Bank of Scotland for that.
How active are you in the operations now?
Yeoh: I’m sitting back more now. When there is any big investment, I will join in the decision process. All my children are very experienced and they have run the company very well.
Soo Min: We still need him ... his guidance, experience and wisdom ... all of it is still very valuable. He still makes very sound and wise decisions.
Yeoh: I guess you could say the seniors and juniors complement each other.
Do you have any plan to migrate your business?
Yeoh: Of course, when your business grows, you have to look beyond the local shores for opportunities. For example, Wessex Water. But our roots are very much here in Malaysia. And so is the company.
What do you do to unwind, Tan Sri?
Yeoh: I’m from a very humble background. On weekends, I like to go to the hawker stalls for food. Usually, when I’m free, I go back to Kuala Selangor and buy fish, find my old friends and catch up with them ... Chit chat, chit chat. I feel very happy.