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Tuesday, August 29, 2006

My blog rank as one of the top 25 Ugly Singaporean blog

Recently, when I check my technocrati ranking. I found that my blog has been list as one of top 25 Most Ugly Singporean Blog. Celebrity blogger Xia Xue rank No 3.

My blog list they because I have write a comment on an article by Seah Chiang Nee, a columnist at The Star base in Singapore.

I was confused as I am not a Singaporean.

The blogger eventually clarified in his comment column that "Apology for not being clear, the list of links are some common blogs about other bloggers complaining about ugly Singaporean behaviours. I guess by complaining about ugly Singaporeans behaviours, we can give them the benefit of the doubt that they dont do the same..."


Friday, August 25, 2006

Missing Link of IMP3

The Third Industrial Master Plan (IMP3) will be driven by 10 strategic thrusts. One of the strategy is : Positioning services as a major source of growth. A major focus is to make Malaysia a regional centre for selected services, which include business and professional services, integrated logistic services, construction, education and training, health and tourism.

Industrial Plan Vs Services Master Plan

This is the third Industry Master Plan, but it look like a Services Industry Master Plan as a greater emphasis is place on service sector. During the IMP3 period, the services sector will be the largest provider of employment, at 52.2% by 2010, while the manufacturing sector will only
account for 30%. The services sector is one of the pivots in the Third Industrial Master Plan (IMP3) During the plan period, the non-government services sector is projected to grow at 7.5% per annum while construction services, at 5.7%. The manufacturing sector however, would only growing at 5.6% annually during the IMP3 period and contributing 28.5% to the economy in 2020.

To achieve the growth targets, the IMP3 has formulated a set of comprehensive strategies and policy measures, as well as identified several sub-sectors for further development. They are business and professional services, distributive trade services, construction services, education and training, healthcare and tourism.

Several policy measures will also be implemented to give the sector a boost. They include:

  • The formulation of a Distributive Trade Master Plan, which will contain strategies to promote foreign direct investments (FDIs) and cross-border trade as well as upgrade the activities of the domestic services providers;

  • Matrade, together with the Ministry of Entrepreneur and Cooperative Development and the Malaysian Franchise Association, will support the growth and expansion of franchising. This is given that fact that home-grown franchise businesses have the potential to expand overseas; and

  • In construction, the CIDB (Construction Industry Development Board) will continue to be the integrated centre for the registration and renewal of licences to contractors. To improve performance, a comprehensive performance rating system will be introduced to cover key areas, such as safety and quality.

The report said major services sub-sectors targeted for greater development and export promotion include:

· Business and professional services
· Tourism
· Education and training
· ICT and multimedia services
· Health services, and
· Construction.

Missing Link

After I have repeat so many time. Did you realize what is the missing link?

Entertainment and Culture Industry

Remember how Japan indgiant giany Sony, Venture out from it traditional hardware E&E industry to Sony Music and later merge a Hollywood base picture company. It act was follow by rival Matsushita Panasonic later. Matsushita Panashoweverhowevr dispose off it Hollywood business later. Sony, however, appointed a CEO from Hollywood recently, become the first hardware company head by a person from entertainment industry and first US citizen to head a Japan corporation (Nissen CEO is French).

In US, industrial giant GeElectricletric(GE) also acquired a television network company when headed by Jack Welch.

South Korea drama like Winter Sonata has boost the tourism sector and sales of Samsung handphone.

In Malaysia, when young Malaysian was crazy on never ending TV reality show and the fact that Singapore TV reality show has successfully penetrate Malaysia market. I don't understand why IMP3 has left out such an important industry.

While bumiputra might generally weak in Science and Maths. They are , however, talented in entertainment and culture industry.

Financial Service Industry

While US based General Electric (GE) has venture out in financial service to provide finance on it aircraft business initially and has acquired non-performing loan in Thailand during Asia financial crisis. GE has become a financial giant under Jack Welch,

In Japan, Sony has form a Sony Bank. In South Korea, conglomerate control credit card business. I don't understand why IMP2 has left out this industry! Maybe it classified under Business and Professional Service? or it has been cover under Financial Sector Master plan announced by Bank Negara earlier?

Retail and Distribution

Japan FDI in Malaysia initially comprises manufacturing sector like Matsushita Panasonic, Toshiba. It is the retail giant that came to Malaysia eventually: Like Yoahan initially and now Jusco Aeon.

Other Europe retail giant including Makro, Carrefour, Tesco etc.

Wal Mart become the largest company in US. Marks & Spencer do not own any factory, but it able to shift it manufacturing to any country that able to produce goods at lowest price.

Direct Selling Company like Amway,Avon, Mary Kay make a mark in the distribution chain and Internet distribution company like Amazon also gaining influence. When manufacturing FDI flow to low cost China. It is those who control distribution that get the highest margin.

Again, I never see retaidistributionbution on IMP3. Maybe it cover under Distributive Trade Master Plan above.

Malaysian hypermarket group Giant has been disposed off to Hong Kong base British control company. Malaysian more prefer to shop in Jusco Aeon rather than it own Parkson. Pakson however has first mover advantage in China.

ICT and multimedia service

Government should disclose statistic on it success of ICT and multimedia service under IMP2 and Multimedia Super Corridor (MSC). Government has provide grant for manufacturing company to implement ERP system under MSC and IMP2. What is the response?

Surprisingly, government never provide such grant to service sector like hotel and tourism and construction and property development company. However, the industry has successfully nurture a Malaysia home grow ERP company in that sector...Mesdaq listed IFCA.


Friday, August 04, 2006

UEM shares had surged 190% & 360% respectively

UEM World shares had jumped 190% year-to-date, while UEM Builders surged more than 360% in the same period. Opus’ share price, on the other hand, gained 44% and CIMA improved some 74%. Reported The Star today.

I have feature UEM on 7 March 2006 and 15 March 2006 respectively.

The shares of several companies under the UEM group, however, received mixed interest yesterday after the group was awarded the concession to build, manage, operate and maintain the second Penang Bridge.

Parent company, UEM World Bhd’s share price fell 2 sen to RM1.62 while subsidiary UEM Builders Bhd’s share price rose 4 sen, or 3.3%, to RM1.25.

Opus International Group plc gained 2.5 sen to 88 sen, but Cement Industries of Malaysia Bhd’s (CIMA) lost 2 sen to RM2.30.

TA Securities said in a report the second Penang Bridge project might have spin-off effects on other contractors, hence other potential beneficiaries of the project “may prevail some time later.”

Remember to rotate between the two company.


Thursday, August 03, 2006

Target costing for Proton and other GLC

This is Part 7 on automobile industry. Part 1

Automobile industry invented a lot of management theory. The most famous is "Just-In-Time" management theory by Toyota in Japan. In order for this theory to be implemented effectively. We have to implement "Total Quality Management", "Supply Chain Management" (SCM) and may be "Enterprise Resources Management"(ERP). However, the pioneer should be mass production line invented by Ford which practice by most factory in the world until recently. When the computer has been invented and utilized in factory management. Customization can be done in low cost manner.

However, for Proton to survive. We have to borrow management theory from other industry.

Traditional costing and pricing told us we have to add cost plus margin to price our product. Apparently, this is what Proton and other Government Link Company(GLC) has been practice. Usually GLC like Tenaga, Pos Malaysia and even PLUS would said:

" Price has to increase because we have not increase the price for ......years."
" Price has to increase because we are still lowest in Asia and in the World"
"Price has to increase because raw material like petrol has increase"

Only Telekom Malaysia Bhd or more specifically TM does not used such tactic because it has to compete with Maxis and DiGi. Actually, price has decrease over time because of competition. However, monopoly business like broardband remain high and not popular in Malaysia because of lack of competition.

Sony founder Akio Morita when develop Walkman. Find that his invention is too costly to manufacturer and unaffordable to public. Thus he set a Target Price that reasonably affordable by public and try numerous ways to manufacture the product at that cost. Eventually, he find this can be done and Walkman become affordable to general public. Then he used such technique to drive the cost of other company product down to compete with Matsushita or Panasonic. This become the whole company practice and Sony overtake Matsushita or Panasonic become a leading electrical company in Japan.

Now, Target Costing become a management theory that have to be study by accounting student. Actually this is also how Ford invented it Mass Production Line to drive automobile cost down.

I feel Proton and all other GLC lack of such culture. Numereous way has been implement to drive cost down with the government help by raising tax for other imported cars. A few decade has pass but Proton still unable to drive cost low.

While other company like computer manufacturer like Dell and Mobile Phone manufacturer able to drive the price of computer abd handphone become lower and lower. Malaysia GLC alway try to increase their price.

I have ask a counter staff at Pos Malaysia Bhd why the postage charges become so high and the reply I get is "Did you pay higher price for your petrol? That is what we used to deliver your mail". Eventually, I found out that the particular staff have charge me wrongly. The actual postage should be lower. She just try to charge me higher to drive the company turnover higher so that she able to get higher bonus at the end of the year or she might get better price for her stock option. What an unethical act.

The point is, Malaysia's GLC do not have culture for Target Costing .


Wednesday, August 02, 2006

Perodua Kancil not a National car

Perusahaan Otomobil Kedua Sdn Bhd (Perodua) has cemented its position as the market leader for passenger car sales, overtaking Proton Holdings Bhd, by capturing a 42.4% market share in the first half of the year (1H06).

Perodua Auto Corporation, the 49%-owned manufacturing arm of Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and whose other shareholders are Daihatsu Motor Co Ltd (41%) and Mitsui & Co Ltd (10%). Although Perodua still the largest shareholder, but Japanese collectively control 51% of Perodua Auto Corporation. Malaysian merely control 49% of the company. Can this call a National car?

Perodua Auto Corporation was established as a result of a restructuring exercise in 2001 to enhance its overall competitiveness for the post Asean Free Trade Area (Afta) era.

While Tun Mahathir and Tengku Mahalee claim Naza Kia should not be grant a National car status. As Naza used imported parts rather than source from Malaysia supplier. I personally feel that Naza more qualified to be claim as a National car than Perodua.

Thus, next time you buy a Kancil. You might not be support our national car as Malaysian merely control 49% of the company.

Rumours said that Proton appointed ex-Perodua executive Syed Zainal Abidin Syed Mohamed Tahir as it new Managing Director because of it ability to secure Japanese as Perodua's partners.

It is yet to be seen whether Syed Zainal Abidin Syed Mohamed Tahir would let go 51% of Proton again to foreigner?


Tuesday, August 01, 2006

Why Proton never penetrate US market?

When Honda enter automobile industry in Japan. Japan market has been dominated by Toyota and Nissen and Honda has difficulties to penetrate Japan's market.

When face difficulties in it home country. Honda then try to penetrate US market by setting up a factory there. Honda, the smallest automobile company in Japan then, become the first Japan's automobile company that set up factory and successfully penetrate US market. Then Toyota and other company in Japan also follow Honda foot step by setting up factory there.

After successfully penetrate US market. Then Honda able to slowly gain market share in it home country...Japan.

South Korea's Hyundai become competitive also because the company able to penetrate US market to compete with General Motor, Ford, Toyota and Honda there.

Malaysia's Proton has enter UK and Australia market. But they never enter US market.

US, a country that promote free trade via World Trade Organisation (WTO) apparently protect import of automobile to the country unless we set up a factory there, like what Honda, Toyota and Hyundai did.

It is not sure why Proton never enter US market. It market shares in UK also has been deteriorated.

There is a rumour in the market that Proton try to get Mitsubishi to become it technical partner. Actually, Mitsubishi financial position is far more severe than Proton and the company is up for sell. Proton should team up with Petronas or other financially strong company to acquired the whole company rather than request Mitsubishi to become technical partner. When we become a shareholder, we gain their technical knowledge like Lotus did to Proton.

If Proton unable to swallow the whole Mitsubishi. At least should acquired their plant in US, if any to try to penetrate US market. I don't think any automobile company able to survive without successfully enter US market.

Update: Proton's can of worms
'Board kept in the dark'
RM4 bil spent on R&D
EON faces reality
Proton: Tighter systems in place