Its managing director Datuk Surin Upatkoon shares with The Edge Financial Daily his strategies and dreams for the company.
TEFD: What are the group’s competitive strengths and advantages?
Surin: The diversity of the various businesses of the group ensures consistency in results. The strength of the group lies not only in the material assets but also in our pool of capable, united and strong management teams at all the operating divisions, who are committed to the sustainable growth and success of the group.
Our key personnel believe in strategising the business plans for the future, good corporate governance, prudent risk management, enhancing the skills and strengths of the human capital and providing efficient service to the customer.
The recent acquisition of the remaining 49% stake in Magnum Holdings Sdn Bhd has made it our wholly-owned subsidiary. Going forward, the focus of the MPHB group will be on the operation of the Magnum 4D number forecast betting gaming business. Gaming will be the core business of the group. Efforts will be carried out continuously to promote the Magnum 4D games, Classic and Jackpot, develop strong brand loyalty and not only remain as a market leader, but to capture a larger market share.
Magnum, the pioneer in the operation of the Magnum 4D forecast betting business, has been operating for over 40 years. Currently, it has 485 sales outlets strategically located in the country to service its customers. The management at Magnum created and successfully implemented the Magnum 4D Jackpot game in September 2009, which has been well received by the public.
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| Surin: The group remains committed to the development of the financial services, stock broking, hospitality and property divisions. |
Multi-Purpose Insurans Bhd (MPIB), our general insurer, provides a comprehensive range of products. It differentiates itself by its “service par excellence” motto to every policy holder. We have the ability to cater to the specific needs of discerning corporate clients, coupled with value-added service such as technical and risk management programmes and fair claims settlement for legitimate insurance claims.
The stock broking division spearheaded by AA Anthony Sdn Bhd has established itself as a boutique retail broker. It has a unique characteristic of a closely knit working environment between the remisiers, dealers and management.
MPHB owns and manages the Flamingo chain of three hotels. Two hotels are in Ampang and Penang, while the third, in the city centre, will open this year. The “Flamingo” brand has its own loyal clientele which prefers the unique location and set-up of the hotels.
The group has a large property landbank with potential development. In particular, the land in Pengerang, Johor, has strong development potential with the development of the Iskandar project.
We have taken actions to create value on the non-yielding land assets by entering into joint-venture agreements with Bandar Raya Developments Bhd for three parcels of land in the country, and with Ayala Land Inc for our assets in the Philippines. The group will continue to explore various options to expedite the value creation on all its assets.
What have been the major achievements of the company in the past four years?
The group has transformed over the years from a cash-strapped convoluted organisation structure to an organised and well-defined group. With the divestment of non-core assets in 2008, coupled with the recent completion of the acquisition of the remaining 49% of Magnum in June 2011, the group has emerged as a balanced and strong organisation which will appeal to a broader base of investors.
The advancement in technology has made possible online trading by clients in the stock broking division. On the gaming division, new technology with online selling system and an all digital communications network was introduced to the customers as well.
Our tie-up with AirAsia and Alliance Bank, coupled with transactions generated through a vast network of intermediaries such as general insurance agents, licensed brokers, corporate and financial institutions have established MPIB as a local core insurer. MPIB has progressed from a relatively low profile player to attain the position of top 13 in the industry within a short span of time through organic growth.
Joint ventures undertaken with reputable developers, Bandar Raya Developments and Ayala Land, will continue to unlock the value of the non-yielding land locally and overseas and hence will increase returns to the shareholders.
Besides the corporate achievements, the group believes in a caring and sharing culture and undertakes various community projects to promote care and assistance to those in need. Under the “Magnum Cares” and other schemes, it is our intention to continuously disseminate funds and aid to underprivileged children, senior citizens, schools and the community to build a better future for our society.
What are some of the major challenges?
One of the major challenges was the creation of the then new Magnum 4D Jackpot game, the steps taken to obtain approval from the government and the successful implementation in September 2009. Another is overcoming investors’ lack of confidence in the group’s initial venture into a telecommunications business, U Mobile.
How is the group positioning itself within your industry? What are your strategies to grow or gain market share?
The group will continue to strive to capture larger market share through promotional events to create public awareness and customer loyalty to the brands represented by the various operating businesses. Continuous efforts will be taken to enhance product portfolio, improve the delivery channels and to create distinctive, strong brands for the operations that the public can easily identify with. However, it will also evaluate viable opportunities such as creating value on the large development landbank which will substantially add value for the shareholders.
We will undertake a review of our asset allocation and will initiate a divestment programme as part of the rationalisation of the group’s non-core and low yielding assets.
What is your dream for your company? How would you like to see it in 10 years?
With Magnum as a wholly-owned subsidiary and gaming as the core business, the profitability and cash flow position of the group will be strengthened via contributions from the earnings and cash flow of Magnum.
With good business acumen and prudent risk management by key personnel, I am confident that the group will be able to face and overcome challenges through the years to attain new heights as a respected market leader with a well managed sustainable product portfolio, where operating divisions will generate healthy returns to shareholders and simultaneously build a strong household name.
Projects pertaining to the caring, sharing and compassion for the community will be considered to alleviate the disparity between the privileged and the underprivileged for the betterment of our future generations. The staff are encouraged to inculcate this social responsibility practices in their personal capacity as well.
This article appeared in The Edge Financial Daily, August 23, 2011.
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