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.

TechnoratiTag:Business Commentary Economics Economy Malaysia Opinion Shares Stock Market klse

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 .

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse

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?

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse

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




TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse

Would you buy Toyota Camry, Honda Accord or Proton Chancellor?

After I have received first and second email from my reader. On Monday, I received a third email from another reader regarding automobile industry excerpt as follow:

From: saam <saam0212@gmail.com>
Date: Jul 17, 2006 8:42 AM
Subject: competitive of proton
To: CompetitiveMalaysia@gmail.com
Hi, I have read about your blog. I want to know more about proton. Like what kind of competitive is proton facing now? Like if you are a buyer, would u prefer to buy proton car. Like would u buy Proton Chancellor? As the price is almost the same with the Toyota Camry and Honda Accord. In what aspects you will take into considerations? Recently I am doing a research about Proton Company. So I would like to gather more information about Proton. Thanks.
First, I like to answer a question from Colin on whether I would buy Proton with the share price dropped so low by now?

What I can said is even the most conservative successful investor like Warren Buffet would do turnaround investment where he would try to invest in company in nearly bankrupt but going to turnaround. Warren Buffet invested in American Express, a credit card company when the company shares price drop to it bottom.

However, Bottom Fish is a risky investment as it is difficult to know where is the bottom. Timing is very important. For me, I do not have plan to buy Proton in near future as I do not know the new CEO well. I feel investment in company equivalent to investment in a company CEO. If government let Idris Jala to head Proton rather then MAS. I might be consider as he has the track record of turnaround a company.

On whether I would buy Proton, Toyota or Honda. I think I would buy South Korea brand if I want to own a car. Either Hyundai or Kia. My first car was Proton Saga. My second car, Proton Wira was provided by my company. I never own any car since my company provided a motor vehicle to me. The point is, I have give enough support to Proton.

Japan has move a lot of factory from Malaysia to China. I feel this trend unlikely to reverse in near future. Thus, Why support Japanese, as they contribute less and less to out country. I feel Asia depend too much on Japan and their Prime Minister frequently insult China, Chinese and Asean. I feel we need to have another balancing power. I would buy South Korea brand like Samsung rather than Sony. Hyundai rather then Toyota. I watch Korea movie/drama rather than Japan movie/drama.

Another reason is security. Malaysia crime rate and car theft was high. If you buy a popular brand like Proton, Toyota and Honda. You are risk of being theft but if you buy a less popular brand like Hyundai or Kia. Chances are you are less likely to be target by car thieve.

Of course, if you want to do research. You cannot take my opinion as I always take a less popular alternative.

Link: BenQ,Siemens Vs Proton , Mitsubishi
Link: Automobile industries in new economy

ZoomClouds

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse

Proton, nurture Malaysia's brand or bumiputra entrepreneur

Proton, initially founded by the government, has become one of the leading brand in Malaysia at one point of time. If you ask foreigner which brand they can think of like Sony and Toyota with Japan, Samsung with South Korea. People will think of MAS and Proton as a brand they can remember about Malaysia. Especially at a time when Proton was doing well in UK. However, Sales of Proton in UK has deteriorated.

After some time, government shift it policy to nurture bumiputra entrepreneur. Proton, and its holding company fall in the hand of late Tan Sri Yahaya Ahmad. However, sudden demise of Tan Sri Yahaya Ahmad cause government effort back to square one. Beside, DRB-Hicom group lead by late Tan Sri Yahaya Ahmad has over gear themselves and over diversified into too many area including transport(IntraKota), Banking and Finance etc. When Asian financial crisis hit the country. The company has to dispose off IntraKota and Proton back to government.

AP policy, which aim at nurture bumiputra entrepreneur successfully nurture another automobile entrepreneur.....NAZA group's Tan Sri S.M. Nasimuddin Amin. Tan Sri S.M. Nasimuddin Amin, unlike three other AP King, has his own company NAZA and has make his company into a large business entity.

After sudden demise of late Tan Sri Yahaya Ahmad. There was no visible bumiputra automobile entrepreneur in Malaysia until NAZA was granted national car status.

However, when government has two goal.....National car brand and nurture bumiputra automobile entrepreneur. When Proton was head by late Tan Sri Yahaya Ahmad where two goal was heading in same direction and lead by same person. It still look okay as there is goal congruence. However, when Proton, a Government Link Company (GLC) head by Executive reported to government and another national car NAZA head by a bumiputra entrepreneur. The two goal was in conflict that lead to conflict between present Prime Minister and Ex-Prime Minister.

Solution

The solution should match the two goal together or what we said "Goal Congruence" in management theory. That is to let bumiputra entrepreneur to lead Proton rather than Proton remain as GLC. When entrepreneur spend their own money invest in a company. They have to try their best to run the company. If not, they will lose all their own money. Of course, the government should not bail out the company when the company fail, nor should government enter into a deal with bumiputra entrepreneur like what disclose by Tajuddin Ramli. All buy and sell should done in a willing buyer willing seller free market basis.

When Tun Daim become Finance Minister. He, an ex-businessman nurture a lot of bumiputra entrepreneur. However, those bumiputra entrepreneur was not an entrepreneur or do not run their own business previously. They all are ex-employee of Peremba when Tun Daim head the company. They all are good employee with good qualification. However, if you look at other community like chinese. High qualification good employee might not be successful businessman. Successful businessman might be a school drop out like Bill Gates.

Present Second Finance Minister Tan Sri Nor Mohamed Yakcop policy was different from Tun Daim. As an ex-central banker, he like to run a large group of GLC and like to nurture young executive to run the company. It look like he emulate Singapore style where government lead the economic, rather then Hong Kong style where entrepreneur that lead the economic. However, unlike entrepreneur, the only solution for those Nor Mohamed's executive is price increase, which lead to present high inflation environment.

I feel Hong Kong style more suitable to nurture bumiputra entrepreneur. Further, GLC was classified as share control by non-bumiputra. Only when a company control by bumiputra enterpreneur, not GLC, was classified as share control by bumiputra. Thus, to place Proton under bumiputra entrepreneur would significantly increase bumiputra percentage to achieve New Economic Policy 30% target.

NAZA group's Tan Sri S.M. Nasimuddin Amin. Unlike ex-employee of Peremba, he is a successful entrepreneur himself. Beside not many bumiputra have financial muscle to swallow a large company like Proton. The important point is, he know in and out of automobile industry. This is one of the reason when Ford agree to joint venture with Hyundai's founder.

Integrity

In AP controversial. Ex-Prime Minister Tun Dr Mahathir alleged International Trade Minister Rafidah deceiving him to award national car status to NAZA. It is not sure Tan Sri S.M. Nasimuddin Amin involve or not or only Rafidah was involved. However, Tun Dr Mahathir later attend a function organized by NAZA indicated that he was not involved.

Then, there is allegation of people under declared tax under AP system. It is not sure the allegation was against NAZA or other group. No prosecution was done eventually. Even if he involve in under declaration of tax. Government can purnish him by make him to acquire Proton stake at high price.

Petroleum money

Howard Huges(Aviator), successfully venture into aviation industry or airplane manufacturing because he has fund from profit of an oil and gas company he inheritance from his late father. South Korea LG group and Samsung group successfully enter into highly competitive electrical home appliances market because government award them petroleum refinery license. Another South Korea group SK Group also used profit from their oil and gas industry to venture into telecommunication industry.Like our Ananda Krishnan's Maxis.

Malaysia Petronas, has at one point of time hold share in Proton. However, Petronas has dispose off the shares eventually. Petronas still sponsor R&D of F1 engine. This means there is two team doing R&D in car engine, Petronas and Proton-Lotus. Should government rationalize the two unit?

I feel government should let bumiputra entrepreneur to run Proton. Government can award petroleum refinery license to that particular entrepreneur to finance him to compete in the industry.

Alternatively, if Proton remain a GLC. Government should let it place under Petronas. Or more specifically, both Petronas F1 engine R&D unit and Proton should inject into MISC, which has shipyard like Hyundai and Mitsubishi to form a Mitshibishi in Malaysia.

On Saturday, Edaran Automobile Nasional Dealers Association of Malaysia said there were 800,000 cars for sale in the market, 250,000 more than usual, making it difficult for national car dealers to remain in business.

Thus, Proton and government should act fast to find a solution. However, I opposed merger between Proton Edar and EON as this become monopoly and does not benefit to consumer.

Link: Automobile industries in new economy


TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse

US automobile Company Vs Japan automobile company

As Colin's email was not specific. I have send an email reply to him to ask him to be more specific. I received an email reply as follow:

Hello Peter,

Glad to receive your reply. I have been going through some of the papers regarding issues related to the car industry. One most important aspect i believe, is the government's priority to protect Proton even after the implementation of AFTA (ref:http://paultan.org/archives/2006/06/19/thailand-malaysia-non-compliant-under-afta/);also there are quite a number of vendors and sub-vendors of parts and accessories segment in Malaysia, most of them are "products" of Proton project. What do you think the government going to do with the Proton and the vendors? What can Proton possibly can do? Would you buy Proton with the share price dropped so low by now?

On the other note, Toyota seems to be able to capitalise on the tariff in AFTA, by constantly transporting parts and cars to and fro thailand and malaysia... maybe you can tell me more abt Toyota strategy in ASEAN countries?

Many thanks,

Please take your time...

Colin.

I used to mentioned that China is potential US of Asia while Japan is German in Asia. However, in term of automobile industry. I have difficulties to compare and benchmark China's automobile industry with US automobile industry. Similarly, it is difficult to compare Japan automobile industry with German automobile industry.

However, I find it perfectly fit to compare Japan automobile industry with US automobile industry.

General Motor Vs Toyota

General Motor used to be the largest automobile company in US and the world. However, Toyota has overtake Ford to become the world second largest automobile company in the world and largest in Asia. Recently, Toyota has overtake General Motor in a few indicator. Toyota executive closely benchmark their company against General Motor and expected to overtake General Motor to become the world largest automobile company in 5 years.

However, unlike Honda, Toyota never reveal it Afta plan to public.

In Malaysia, to be expose to Toyota. UMW is the company to be invested. Being the largest automobile company in Asia. This is a company you unable to miss in your automobile portfolio. UMW gain substantially in 1993 super bull run. Thus, this is a counter you unable to miss if you believe stock market will begin it bull run again after recent world cup.

Ford Vs Honda

Ford and Honda, both company name after their founder's name in their respective country. Honda has a comprehensive Afta plan in Asia. Where it plant in Malacca, Malaysia, manufacture some parts to be use by their plant in Thailand, Indonesia and Philippine. Similarly some model of cars also solely manufacture in Malaysia and then export to other Asean country and vice-versa.

In Malaysia, it is not easy to have exposure in Honda. As 51% of the controlling stake of Honda Malaysia held by Japan's holding company with the balance 49 share between Oriental Holding and DRB-Hicom Group.

Daimler Chrysler Vs Nissan

Chrysler, the weakest automobile manufacturer in America has merged with German's Daimler to form Daimler Chryler. Similarly, Nissan, after a huge loss with prolong recession in Japan, has merged with French's Renault.

Nissan Malaysia is the only automobile brand fully control by non-bumiputra.

South Korea catching up

South Korea companies, after electronic giant Samsung's profit over take Japan's Sony. It automotive company Hyundai has benchmark against Japan's Toyota. It is yet to be see whether Hyundai able to over take it Japan counter part. In Malaysia, Hyundai brand has slowly gain popularity while another brand Hyundai acquired after Asia financial crisis Kia also gaining popularity in Malaysia.

Malaysian really like Kia Spectra as it look like German's BMW. While Korea's SSangyong is license from German's Mercedes.

China

China market was dominate by German's Volkswagen.

Positioning of Malaysia

Malaysia manufacturing industry is threaten by China's low cost factory. This is just like Europe country a decade ago which threaten by Japanese lower cost manufacturer. Thus, we need to learn from European country....how they compete with Japanese low cost factory a decade ago.

I used to benchmark China against US, German against Japan, French against Korea.

The only European country that have automobile industries that available for Malaysia to benchmark is Italy, Sweden and Belgium.

Belgium is a headquarters of European Union as the country speak English, French, and German. German do not like to have EU meeting in French or UK. French also do not want to attend EU meeting in German or UK. But the three country willing to come to Belgium.Malaysia, have three major race which make it a perfect Belgium of Asia.

While Thailand is like Italy in term of travel industry where their capital are flood by water. However, in automobile industry. Thailand is like Belgium, without it own brand of automobile company. Malaysia, like Italy has it own brand Proton and Fiat respectively.

Malaysia's furniture industry also like Italy's furniture industry, both within top 10 furniture export country but Thailand was unlike Italy in this industry. Malaysia's furniture industry has a lot to learn from their counter part in Italy in term of design. Similarly, Malaysia's automobile industry can learn a lot from Italy's automobile company in term of design. Malaysia
automobile industry can collaborate with furniture industry to attract design expert from Italy after a lot of factory in Italy theaten by China low cost manufacturer.

While Proton has dispose off Italy's Augusta. Proton can always recruit it designer back when the company close down. Meanwhile, Proton Lotus can benchmark against Italy Ferrari while Proton can benchmark against Fiat robot manufacturing plant.

Another European country that have their own automobile brand is Swedish's Volvo. Volvo used to be more superior brand compare to Italy's Fiat. Volvo used to be considered a up market brand after German's Mercedes and BMW. Volvo, however, have strong trucks manufacturing capability. Thus, Malaysia can target trucks manufacturing rather then passenger car manufacturing. However, Malaysia neighbor, Thailand has strong trucks manufacturing capability despite do not have it own brand.

India TATA group also ha upper hand in branded trucks and bus manufacturing technology. Please note that up market brand like Mercedes also have strong trucks and bus manufacturing technology. Thus, Proton can enter trucks and bus manufacturing business to acquired technology in this area. Once it has acquired technology in trucks manufacturing. It can leveraged on this technology to enter up market manufacturing. Majority(90%) of the container haulage are Volvo brand. Malaysia has loss a lot of foreign currency to import the haulage trucks. Malaysia can save a lot foreign currency if Proton enter this market segment.

Most important thing, Malaysia should learn from Italy and Swedish company. How the company compete with low cost Japanese brand in 1980an to compete with South Korea and Chinese low cost brand.

Link: BenQ,Siemens Vs Proton , Mitsubishi

Update: Nissan to start talks with General Motors over possible alliance
Nissan, Renault and GM explore tie-up

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse

Low margin of Malaysia auto parts business

I have received an email two weeks ago from one of my reader. Excerpt as follow:

From: Fong Pan <fongkai1980@yahoo.com>> >
Date: Jun 21, 2006 3:20 PM> >
Subject: questions abt car industry> >
To: CompetitiveMalaysia@gmail.com> >> >
Hello Peter,
I have been your blog reader and recently I have to do some writing on car industry in Malaysia. Can you please offer me some knowledge abt the car industry. And it seems like auto parts vendors and manufacturers have also absorbed huge chunk of profit.

Thank you,

Colin.

I have been busy for the past two week and I only able to reply now. Sorry for late reply. Current issue of The Edge has make an analysis on local automobile industry. Get a copy for update.

Meanwhile, my next few post on this blog will comprises reply to Colin (Fong Pan) beginning with the issue I most familiar with.

Auto parts vendors consider low margin business in Malaysia. Despite Proton continue to claim it substantial cost are cause by it social obligation to give contract to Malaysia auto parts manufacturer.

At one point of time. Proton ex-CEO Tengku Mahalee said Malaysian chinese should support Proton and high import tax impose on imported cars to protect Proton market shares in Malaysia, if not, a lot of proton auto parts supplier would have to close down and a lot of it own by Malaysian chinese.

The statement by a CEO of a Government Link Company(GLC) indicate that most GLC's CEO view that Malaysian chinese are racist. They would support protectionist import tax if he mentioned that a lot of Proton supplier comprises chinese.

In actual fact. Chinese is not racist. While chinese will protest if Proton required all auto parts vendors must be 100% own by bumiputra as this is unfair and racist policy. Malaysian chinese would not care if they given a fair opportunity to supply to Proton but the vendor forces to close down due to it own uncompetitiveness. Malaysia chinese would not seek government protection base on the reason that some auto manufacturer comprises Malaysian chinese. It is the job of trade organisation like Auto Parts Manufacturer Association of Malaysia, if any but not the whole chinese community. CEO of GLC should spend time to increase their respective competitiveness of the company rather than play up racist issue like politician.

AIC diversification

veteran bumiputra auto parts vendors to Proton, Datuk Haji Sarip bin Hamid who own a few public listed company including AIC Corporation Bhd, Jotech Holdings Bhd. Started as auto parts vendor to Proton, AIC Corporation Bhd' s AIC stand for Autoindustries Corporation. However, Datuk Haji Sarip realize that margin become lower and lower when Proton demand it supplier to lower their cost. Thus, he diversified to more lucrative semiconductor manufacturing. Now, other than non-bumiputra control MPI, Unisem, Globetronics etc. Datuk Haji Sarip's AIC Corporation is the only bumiputra semiconductor manufacturer in Malaysia. Its later diversification to TFT-LCD manufacturing make him now the only TFT-LCD public listed manufacturer in Malaysia.

Datuk Haji Sarip is one of the bumiputra entrepreneur that I respect. He does not relied on contract from GLC like Proton, but he get contract from Multinational Corporation (MNC) base on his own competitiveness. However, I feel government never give him much help like other crony. He prefer to make donation to the poor rather than make political donation. Maybe this is the reason he never get help from the government.

Ingress invest in Thailand

Another bumiputra manufacturer Ingress Corporation Berhad set up factory in Thailand, Detroit of Asean, and Indonesia. The venture, however, yet to reflected on profit in financial statement.

Delloyd diversified into plantation

Another auto parts manufacturer Delloyd Venture Berhad, which control by non-bumiputra, has venture into oil palm plantation. Delloyd Venture also announced that it explore the opportunity to become an OEM handphone manufacturer.

All the above bumiputra and non-bumiputra companies prove that auto parts business is low margin business where it player try to diversified into other industries.

The most competitive auto parts manufacuturer in Malaysia

In my opinion, I feel the most competitive auto parts manufacturer in Malaysia is New Hoong Fatt Holdings Berhad. New Hoong Fatt's cash flow, grow are impressive compare to other parts manufacturer.

Link:The Edge: Slowing to a standstill
Shakeout among used car dealers
How the main auto players measure up




Update: Components factory lays off 270 staff
Two-hour notice company rapped

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse

IOI Group: Unilever of Malaysia?

Mitsubishi used to be the largest conglomerate in Japan. Samsung, used to be the largest conglomerate in South Korea. Whereas, Jardin Matheson used to be the largest conglomerate in Hong Kong.

Jardin Matheson control Cycle & Carriage, which own Mercedes franchise in Malaysia. Jardin Metheson also control Dairy Farm, a company that take over Giant hypermaket in Malaysia. Jardin Matheson also control Guardian pharmacy in Malaysia.

Jardin Matheson used to be deemed as a company control by colonial British's family. Chinese richest family in Hong Kong, Li Ka Shin has take over another conglomerate Whampoa ( Now Whampoa-Hutchinson) Whampoa operate one the most busiest port in the world, whereas Hutchinson dominated telco market in Hong Kong, like Ananda Krishnan's Maxis in Malaysia. Li Ka Shin also operate Watson pharmacy in Malaysia

Malaysia government also take over a conglomerate from British colonial. Malaysia government take over Sime Darby. Sime Darby used to be a proxy to Malaysia economic.

IOI Group, initially compete with Sime Darby's Sime UEP Properties Bhd via IOI Properties. Later, IOI group also venture into plantation. However, unlike Sime Darby, IOI Group do not have Automobile division like Sime Darby.

However, market capitalization of IOI Properties overtake Sime UEP Properties. IOI Group also have the largest market capitalization among all the plantation company. Eventually, IOI Group market capitalization over take Sime Darby even IOI Group do not have Motor and heavy equipment division. IOI Group's oleo-chemical division is one of the top 5 market capitalization company in Industrial counter on Bursa Malaysia.

In Malaysia, the other plantation group that also operate a motor and heavy equipment division is Hap Seng consolidated Bhd. The company is being demerge from Malaysia Mosaic Bhd which has smaller market capitalization. The demerger has make IOI Group difficult to swallow the company as it has larger market capitalization.

The increase in market capitalization of IOI Group has lead to it controlling shareholder, Tan Sri Lee Shin Cheng over take Quek Leng Chan and Lim Goh Tong in Malaysia's richest 40 ranking by Forbes Asia. Please be reminded that Quek Leng Chan is second generation of tycoon, which mean he inherited a substantial portion of his wealth from his father and his uncle whereas Lim Goh Tong involve in lucrative gaming industry. Tan Sri Lee Shin Cheng was not on the top ten list few years ago!

Tan Sri Lee Shin Cheng come from a poor family. He has to sell ais-cream during his school day to make end meet. He also never involve in sin industry(gaming industry). This achievement is really not easy.

Malaysia manufacturing industry is threaten by China's low cost factory. This is just like Europe country a decade ago which threaten by Japanese lower cost manufacturer. Thus, we need to learn from European country....how they compete with Japanese low cost factory a decade ago.

I used to benchmark Malaysia with Netherlands. One of the largest Netherlands company is Unilever Group. IOI Group, which has take over a few specialty oil and fats company in Netherlands and plantation land in Malaysia, clearly is a potential Unilever in Malaysia.

After Hong Leong disposal of OYL. Which have manufacturing plant overseas. The only Malaysia multinational company that have LARGE operation oversea only left IOI Group and YTL Corporation Bhd. IOI Group has announced venture into biodiesel recently.

IOI Group start with Lee Shin Cheng acquired an industrial gas company Industrial Oxygen Incorprated(IOI). He later injected his property company Lam Soon Huat(Now IOI Properties Bhd) into the company. This is similar with Tan Sri Datuk Lau Ban Tin's BIG's Industries Bhd.

It is not sure how many percentage of BIG Indsutries Bhd shares control by Tan Sri Lau Ban Tin now. Anybody who abl to control BIG Industries Bhd able to emulate Tan Sri Lee Shin Cheng step in creating wealth in one generation.

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse biodisel

Nanyang increase cover price to RM1.30 today

Contrary to market rumor. Only one news paper increase it cover price. Nanyang increase it cover price from RM1.20 to RM1.30. As Oriental Daily has increase their cover price from RM1.20 to RM1.30 not too long ago. There would be no longer any chinese newspaper daily that cost RM1.20 effective today.

Nanyang circulation might be deteriorated as those who buy Nanyang because it is RM0.10 cheaper per day will shift back to Sin Chew and Oriental Daily. Sin Chew Daily is the biggest gainer in these price change.

Hopefully, this is not a tactic of Tan Sri Tiong attempt to close down Nanyang by decreasing it circulation like what he did to one of the Sarawak base chinese daily that he take over previously.

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance SharesMedia Stock Market klse

Courtesy ranking and competitiveness of service industry

The Reader Digest survey that rank Malaysia or Kuala Lumpur as the third worst city in terms of courteousness has cause much debate recently.

Some said it is restricted to Kuala Lumpur, not whole Malaysia. Obviously, life in Kuala Lumpur and other part of Malaysia are different. In Kuala Lumpur, if you unable to aggressive while driving. You will deemed uncompetitive to live in Kuala Lumpur. A lot of people who came from our own Kampung would find people in Kuala Lumpur is uncourteous. I personally also find Kuala Lumpur people uncourteous but when I go back to my home town. Those who work in my home town would find my behavior uncourteous even some people in Kuala Lumpur would feel my behavior incompetitive to live in Kuala Lumpur.


Lets look at the comparison with Singapore to see whether the poll reasonable or not.

Reader Digest conducted 3 test. We have same ranking on dropping paper test (20th) which I feel is reasonable.

We rank higher (25th) than Singapore (33rd) on Holding door test. Which I think also reasonable. Majority of Malaysia would agreed with me.

However, in purchasing test, Kuala Lumpur(32nd) ranked substantially lower than Singapore(22nd), 45% vs 70%.

If you been to Singapore before and buy something from Singapore retailer. You will always greed with "Thank You". You would really feel customer is king. But you would not feel that in Malaysia. I have such feeling long time ago. But I really in doubts, as Singapore, as a develop country should be less courteous than Malaysia. Now my feeling has been proven correct by Reader Digest survey.

Once, I even hear a person call up to a radio "Call In" show mentioning that she is a retail assistant. She said on air that the people she most dislike is her customer who spend little but act like a big boss. I think this is the attitude of majority of Malaysian. Only you able to buy the whole shop you will be entertain courteously.

I have discuss this with my boss as I am still young when I went to Singapore at that point of time. My superior told me that Singapore is a service society. Their service industry is world class standard. Their airline, port service, hotel services, retail services is good while Malaysia just transform to Manufacturing economy from agriculture economy. Thus, that is the different.

Now, Malaysia manufacturing industry has been threaten by China low cost counterpart. Malaysia has been slowly transform to service economy like Singapore. We slowly gain competitiveness in traveling and education industry. Which we attract business from China big spender. Our Port of Tanjung Pelepas has give some uneasiness to Singapore Port Authority. Our low cost carrier Air Asia slowly gain competitiveness even our Malaysia Airline (MAS) still unable to compete with Singapore SIA. Our Parkson has invaded China Market.

However, we still have a lot to do in term of customer services. Our banking services. Which is worst than civil services after Pak Lah become Prime Minister. A cosmetic company in Taiwan has engaged a human resources consultant who train SIA staff to train their beauty consultant. Would any Malaysia company do that or would our MAS do that? Malaysian really has to improve their courtesy to compete in service industry if all our factory slowly move to China. Complained on loss of money in banking industry and on loss of item while traveling via our airport cannot be left unattended. Lets correct and improve our courtesy to improve our ranking in next poll and indirectly improve our competitiveness in our service industry

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion Social

Newspaper will raised their cover price on 1 July

A rumours has been in the market for quite some time is major chinese newspaper in Malaysia will raised their cover price to RM1.50 from 1 July 2006.

Sin Chew Daily together with China Press will lead the increase. It is not sure Oriental Daily and Nanyang will followed or not.

Reader unable to log in the current price unless you willing pay in advance of one year subscription to Oriental Daily in major 7-11 outlet. Monthly subscriber to Oriental Daily have to pay the increased price after 1st July 2006. Thus, reader have to pay a substantial upfront to log in the price or you are subjected to the price increase.

This is second price increase after the market has been dominated by one group.

It is not sure whether English newspaper and newspaper in Bahasa Malaysia will do the same or not.

Link: Stock Market Hot Tips
Update: Nanyang increase cover price to RM1.30 today

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance SharesMedia Stock Market klse

Malaysia's richest 40

Forbes Asia has published a list of Malaysia's richest 40. The top 10 list are as follow:

1. Tan Sri Robert Kuok US$5.6b (RM20.55b) - 83

2. Tan Sri Ananda Krishnan US$4.6b (RM16.88b) - 68

3. Tan Sri Teh Hong Piow US$2.1b (RM7.71b) - 76

4. Tan Sri Lee Shin Cheng US$2.05b (RM7.52b) - 67

5. Tan Sri Quek Leng Chan US$2b (RM7.34b) - 65

6. Tan Sri Lim Goh Tong US$1.5b (RM5.51b) - 88

7. Tan Sri Yeoh Tiong Lay US$1.1b (RM4.01b) - 76

8. Tan Sri Tiong Hiew King US$1.05b (RM3.85b) - 70

9. Tan Sri Syed Mokhtar AlBukhary US$1b (RM3.67b) - 54

10. Tan Sri Lim Kok Thay US$440m (RM1.61b) - 54


Changes?

The most apparent changes of the list compare with previous year is Public Bank Berhad's Tan Sri Teh Hong Piow and IOI Group's Tan Sri Lee Shin Cheng overtake Hong Leong's Tan Sri Quek Leng Chan and Genting's Tan Sri Lim Goh Tong.

Quek Leng Chan and Lim Goh Tong used to be in the top 4 together with Robert Kuok and Maxis's Ananda Krishnan.

Tan Sri Teh Hong Piow and Tan Sri Lee Shin Cheng are first generation who create the wealth themselves and not involve in gaming industry like Lim Goh Tong and Ananda Krishnan. Robert Kuok and Quek Leng Chan are second generation. Which mean their father has earn the first million and they inherited some wealth from their father, while Ananda Krishnan and Lim Goh Tong involve in gaming industry which consider a money printing industry.

Industry

Public Bank Berhad's Teh Hong Piow is the only banker in the top 10 list. As Malaysia has a policy of no longer issue banking license to individual. Tan Sri Teh might be the last banker on the list (top 10 list, another bumiputra banker, AmBank Azman appear on top 40 list)

3 persons(2 family) are in gaming industry. Ananda Krishnan via Tanjong and Lim Goh Tong and Lim Kok Thay via Genting.

5 persons (4 family) (40-50%) are involve in power industry. Ananda Krishnan via Tanjong, Lim Goh Tong and Lim Kok Thay via Genting, Yeoh Tiong Lay via YTL Power and Syed Mokhtar AlBukhary via Malakoff. Thus it might be helpful if you involve in power generation or IPP if you want to be on the top 10 list.

That might be the reason why public and blogger are unhappy on IPP contract.

Next: IOI Group: Unilever of Malaysia?

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse

A warning to Tun Dr Mahathir

The outburst harsh criticism by former Prime Minister Tun Dr Mahathir Mohamad against his successor Datuk Seri Abdullah Ahmad Badawi has made the headline on all mainstream newspaper in earlier Jun 2006.

Datuk Seri Abdullah Ahmad Badawi has an upper hand so far:

1) On the day of the news of Tun Dr Mahathir Mohamad alleged Pak Lah cutting off major project initiated by him. On the same day, all Chinese newspaper in Malaysia carried a news report that a strategist of Bank of America praise Malaysia fiscal policy and express confident in Malaysia currency compare to its previously and with other third world country in their economic and business section.

2) Over the past week, Umno Members of Parliament, Mentris Besar and the Barisan Nasional component leaders have all pledged their support to Abdullah. The expression of support has been overwhelming and certainly his control of Umno is unshakeable. The Star's columnist Wong Chun Wai write " But even those close to Dr Mahathir acknowledge the reality that it makes no sense for ambitious Umno politicians to back this retired politician who has no plans and no hope of coming back to power. It is only politically wise to invest in the present and the future, if one wants to climb the hierarchy. "


On 14 June 2006, The Court of Appeal has quashed Sukma's conviction for allowing his adopted brother Datuk Seri Anwar Ibrahim to sodomise him eight years ago. Justices Gopal Sri Ram, Hashim Mohd Yusoff and James Foong unanimously allowed Sukma's appeal and set aside the conviction and six-month jail sentence. A coincident?

Sukma convicted when Tun Mathathir was in power. A retrial order clearly is an embarrassment to Tun Dr Mahathir. Is this just a coincident or a warning to Tun Dr Mahathir?

Clearly, when Pak Lah face difficulties in getting police to accept IPCMC. Whether right or wrong. Pak Lah cannot afford to lose this battle.

Influence of people with other agenda

Tun Dr Mathathir also said:

But the present government can do a good job if they want to. The means are there but if they come under the influence of people who have other agendas, then I can’t help.
Who is the influential people with other agenda?

On 14 June 2006 issue of Oriental Daily. Matthias Chang, the former political secretary of Tun Dr Mahathir Mohamad said Kalimullah Masheerul Hassan and Khairy Jamaluddin are the people who influence the PM, and challenge the two to debate with him.

Kalimullah is the New Straits Times Press deputy chairman and editorial adviser while Khairy is Abdullah's son-in-law of PM and Pemuda Umno deputy chief.

Both are directors of ECM Libra. Kalimullah is Executive Chairman and Co-Chief Executive Officer while Khairy is Director of Investment Banking in ECM Libra.

Clearly ECM Libra is the most influential merchant banker in Malaysia. At least it is like Phileo Allied Bank when Anwar Ibrahim was Finance Minister, if not more influential. ECM Libra is in the process of merger with Avenue Capital Resources Bhd.

The risk of investment in ECM Libra is they involve in political controversial like with Matthias Chang and a lot others. This is a great political risk you must excess before you put your money in.


TechnoratiTag: Commentary Malaysia Opinion Shares Stock Market klse News and politics Politik

"All In" a story on gaming and casino industry staring Song Hae-Gyo (宋慧乔)

On 13 June 2006, Malaysia free to air TV NTV7 started to broadcast a South Korea Drama "All In" on 9.30pm every night, is a story base on casino and gaming industry.







Some claim that it is base on a true story in South Korea.







From con man, gangster to casino senior executive and later tycoon

The story of Kim In-ha(Lee Byung Hun) , who follow his uncle Kim Chi-soo gambling and hustling to make a living and eventually ends up as a (partner-in-crime) with his uncle to con people via gambling. Kim In-ha grows up under such circumstances has picked up the skill of gambling.

He has a bunch of friends and they are street kids who hang out in the poor area of Yong-doo Pu, committing petty crimes and getting into fights, an act like gangster.

Kim In-ha end up in jail after a gang fight which he accidentally kill a man.

Upon release from jail. His only skill at that point of time......... Fighting let him end up as security guards in a casino in Cheju Island of Korea. Where he meet his ex-girl friend Su-yon (Song Hae Gyo(宋慧乔))who become coupler in the casino.

Kim In-ha's gambling instincts is also recognised by Director Suh, and is quickly promoted to the position of Pit Boss in the casino, a Senior Executive position and start a life in gaming and casino industry.

"All in" is a term used in poker, usually in HK movies. They call it "Showhand"", i.e. to gamble all your capital and stake everything.

The scenic Cheju Island was the main setting for the entire serial. Besides Cheju Island, part of the production was filmed in Las Vegas. It gave a fairly detailed, insightful and interesting outline of the casino and hotel business. The serial also threw some light on triad struggles, and the involvement of the triad world with the corporate world.



This is a famous South Korea drama that star by Song Hae-Gyo (宋慧乔). I never watch all movies star by Song. However, I feel she look the most prettiest in this drama on all the drama I have watched.

If you never watch this drama before, it is a drama you unable to miss.

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Media Stock Market klse

528 anniversary and Nanyang's story

Last month 28 May 2006 was 5th anniversary of 528 incident, where Nanyang was taken over by Huaren Holdings, an investment arm control by Malaysia Chinese Association(MCA).

Oriental daily run a series articles revealing what happen during that time.

Former employee of Sin Chew Daily of Tan Sri Tiong, now advisor of Oriental Daily reveal that when he was still employed by Sin Chew Daily. Tan Sri Tiong has assigned him to negotiated with Hong Leong Tan Sri Kwek in 1990an to try to acquired Nanyang but fail.

In 8 February 2001, after meeting with Tan Sri Kwek in Hong Leong HQ in KL. Managing Director(MD) of Nanyang Mr Wong was on the way back to Nanyang building. While in KESAS highway, the MD received a call informing him that a lady who claim herself representing Sin Chew's Tan Sri Tiong call Miss Sandra has come to Hong Leong HQ without any appointment requested to meet Tan Sri Kwek Leng Chan. Sources said Miss Sandra said "they" willing to negotiate any price tag offer by Hong Leong to dispose off Nanyang.

After short meeting, Sandra was told the deal was negotiable and suggested her to contact and negotiate with Managing Director of Nanyang Mr Wong. The MD was instructed by Hong Leong to handle the negotiation. However, Sandra never show up after that.

After that incident, rumors in the market said that Hong Leong was pressure to sell.

On 14 May 2001, The Edge reported that Huaren Holding intended to acquired stake in Nanyang.

On 24 May 2001, The Board of Director of Nanyang met at Hong Leong HQ. They pass resolution of shares sales and requested 9 blacklisted employee to resigned.

At the night of 28 May 2001, employee from Sin Chew Daily come and take over the management and editorial office of Nanyang.

Even on 6 August 2002, The Edge reported that Market talks have it that Mah King Hock who control 23.8% of Nanyang is a close associate of Tiong.

On 15 March 2006, Oriental Daily reported that Madigreen become the second largest shareholders of Nanyang after Madigreen acquired stake from Mr Mah King Hock. Oriental Daily also speculated that Madigreen ultimately control by Sin Chew Tan Sri Tiong. Both Sin Chew Daily and Nanyang remain low profile on shareholders changes.

Tan Sri Tiong history

Tan Sri Tiong has a history of closed down a Sarawak base newspaper after acquired by Tan Sri Tiong. Subsciber of such newspaper was replaced by subscription to West Malaysia Sin Chew Daily.

This cause East Malaysia players such as See Hua Daily (published by Datuk Seri Lau Hui Kang's KTS group) started seeing competition from Sin Chew in 1997 and started Oriental Daily to compete with Sin Chew Daily in West Malaysia.

As Nanyang is a public listed company and the fact that Tan Sri Tiong has history of close down a newspaper it acquired and replaced by Sin Chew Daily. It is unfair to minority shareholder of Nanyang as they never told whether Tan Sri Tiong would closed down Nanyang and replaced all Nanyang subscriber by Sin Chew. Nanyang should disclose it future plan to it shareholder.

My guess : Guang Ming to merge with China Press?

As there is no disclosure from Nanyang management and the history of Tan Sri Tiong above. It would be foolish if you want to buy Nanyang shares and treated as investment in Nanyang. Anyhow Nanyang result is not good at the moment. The Crown Jewels in Nanyang is China Press. China Press, China Press is now the second largest circulated Chinese newspaper, selling an average of 223,890 copies daily, including night sales, compared to Nanyang Siang Pau's 140,493.

While Tan Sri Tiong's Guang Ming Daily has a daily circulation of 137,960 copies. It is logical Tan Sri Tiong would want to close down Guang Ming Daily and replaced by China Press circulation, This can boost China Press circulation overnight, to compensate loss of Guang Ming Daily. He might close down Nanyang and replace by Sin Chew Daily. After this merger, Tan Sri Tiong would control both the upper and lower segment of Chinese newspaper market, he able to maintain both listed company Sin Chew and Nanyang(Might change to China Press)

Nanyang's strength

Nanyang full name is Nanyang Siang Pau. Siang Pau mean Business Daily, Nanyang's strength is in it business report. I like to read Nanyang business section than Sin Chew Daily, it coverage on China market and it Monday's edition all more superior than Sin Chew Daily. Thus, journalist in Nanyang's business section are expected to be able to keep their job.

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance SharesMedia Stock Market klse

Competitiveness of South Korea Lotte Group

When talking about South Korea, people outside South Korea used to talk about Samsung, Hyundai, LG and even SK Group and Daewoo.

However, another company call Lotte is gaining competitive. Start from chewing cum and diversified to other food and beverage industry initially and later leisure and theme park industry. Now Lotte group dominated retail industry in South Korea via Lotte Shopping and Lotte Mart.

First, French retail giant Carrefour feel they unable to dominate the South Korea market. Carrefour disposed off its 32 hypermarket in South Korea to E. Land, a fashion retailer in South Korea.

Later, US retail giant WalMart also disposed off it 16 hypermaket to Sinsegae group's E-MART.

In South Korea Coke market, multinational Coca-cola only have 20% of market shares. Lotte's Lotte Chilsung have a 40% dominated market shares.

In fast food, McDonald also have difficulties competing with Lotte's Lotteria.

While Samsung and Hyundai represented organic growth manufacturing giant and Daewoo represent M&A manufacturing giant. SK and Lotte represent the new generation of giant in service industry.

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares

Telenor set up research centre in Malaysia despite DiGi unable to get 3G license.

Telenor has opened a research and innovation centre (R&I) in Cyberjaya on 24 May 2006 despite it subsidiary in Malaysia DiGi unable to get 3G spectrum License in Malaysia.

“The centre, Telenor's first research facility to be located outside Norway, is another step in the company's internationalisation process and global innovation activities,” senior executive vice-president/head of Asian operations, Arve Johansen, said in a statement.

The centre is headed by managing director Dr Kristin Braa.

Telenor was reputable of it high tech open concept headquarter in Norway. DiGi's has built a smaller copy of such high tech building as it corporate headquarters in Shah Alam - is in its final stage of completion. I really envy DiGi employee who has the opportunity to work in such high tech building.

DiGi shares price hit RM9.30 on April 2006. DiGi shares price hit highest at RM11.70 on 8 May 2006. It close RM10.40 yesterday.

Earlier, on 19 May 2006, DiGi.Com Bhd expects net profit to grow at least 20% for the current financial year ending Dec 31.

For the first quarter ended March 31, 2006, net profit tripled to RM184.66 million from RM57.96 million a year ago due to improved margins and lower depreciation costs. The net profit, if annualised, would be RM738 million, exceeding most analysts’ estimates of RM566.62 million for the current financial year ending Dec 31, 2006.

Previously when I state in my blog post highlighting that DiGi shares price would hit RM9.30. A reader who unable to keep a job in research house post a comment in my blog claiming that smart investor never listen to analyst recommendations.

History, however, has proved that my blog post is accurate and his comment has come back to bite him.

Today, DiGi launch a talent search competition that focuses on a younger age group-DiGi Celebriteen.

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse

Nazri next UMNO vice-President?!

Minister in the Prime Minister Department Datuk Seri Mohd Nazri Abdul Razak has been appear high profile recently.

Whether you like him because he did a good job as a Chairman of Human Right Caucus or you dislike him because he instructed women Senator to vote for a Bill that put Islamic women in disadvantage, or you dislike him because you support ex-Backbencher Club President Shahrir Samad. Nazri is constantly on the news.

Even the other two UMNO vice-President, Melaka Menteri Besar Datuk Seri Mohd Ali Rustam and Agriculture Minister Tan Sri Muyiddin Yasin do not have such publicity enjoyed by Nazri. He has seen constantly liaise with Prime Minister and Deputy Prime Minister and party whip on Parliament issue. The other two vice-President never seen liaise with UMNO number one and number two that closely like Nazri.

Earlier, Nazri responsibility expanded in a cabinet reshuffle. Nazri has assigned to cover Datuk Seri Radzi Sheikh Ahmad's portfolio after the later transfer as Home Minister.

While another UMNO vice-President Isa has been suspended. His position are expected to be fill by UMNO Youth Chief and Education Minister Datuk Seri Hishammuddin Tun Hussein in the next UMNO election by the public.

Melaka Menteri Besar Datuk Seri Mohd Ali Rustam who get highest nomination during last UMNO election, are expected to be able to retain his position unless some unforeseen circumtances occur.

Thus, a direct fight between Nazri and Agriculture Minister Tan Sri Muyiddin Yasin is unavoidable if Nazri intended to move up.

Whether the high-profile and publicity enjoy by Nazri would get him more enemy or make him more popular is yet to be seen.

TechnoratiTag:Commentary competitive Malaysia News and politics Opinion Politik Social

Mandarin demand:discriminatory or courtesy

The Deputy Prime Minister Datuk Seri Najib Tun Razak said when winding up the debate on the Ninth Malaysia Plan at Dewan Negara yesterday that the private sector should stop the practice of making it compulsory for local graduates to be proficient in Mandarin.

The next day, Human Resources Minister Datuk Dr Fong Chan Onn said the requirement for prospective employees to be fluent in Mandarin should be made optional.

Clearly, when you are in certain categories. You would feel upset when a job advertisement excluding your categories to apply for certain job.

I have a friend who is in middle age. He always feel discriminate and upset when he saw a job advertisement stating that application should not be over 35 years old. He also upset the Pak Lah government appointing young CEO to head Government Link Company (GLC). He said those young people lack the experience required for such a position.

I even see A Kadir Jasin, a veteren journalist criticize Pak Lah government appointing young people to handle the Prime Mininster's press office.

If you do not known Mandarin, you will feel discriminate and upset when you see a job advertisement stating ptoficient in Mandarin as a requirment to apply for certain position.

However, I feel it is better for a job advertisement to state clearly what is the requirement for certain job, so that I do not waste my time in applying a position that I would not get employed.
This also enable me to know what I lack of or which area or skill I have to improve.

What difficulties a large organization to ask an officer to handle "courtesy interview"?

When I was employed by a Main Board listed company(Now PN17) as an Assistant Accountant. The company place an advertisement for "walk in interview". My department head who want to employed a person who know Mandarin but never stated in the advertisement.

A lot of candidates take the trouble to come to our office for walk in interview and they spend hours to fill up the form and waiting for their turn of interview.

I was ask by my Manager to conduct courtesy interview for those who do not qualified after perusal their forms. The candidate who spend hours travelling to our office, filling up their form, and waiting long hours for their turn of interview, will send to my room for courtesy interview which last for less than 2 minutes. The candidates will ask to go back to wait for company call if successful, which usually not.

Thus, would it be better for the candidate being told earlier the requirement and they need not apply if they unable to fullfill certain requirement. This safe the company time and safe the time of candidates.

I encounter a lot of non-chinese who able to speak fluent Mandarin. They usually "bertudung". Look for Tini in Citi Bank or visit a stationery shop in Taman Desa, Off Old Klang Road if you want to see one.

Related Link: We need to be more marketable By WONG CHUN WAI

TechnoratiTag: Commentary Malaysia Opinion Social

Muhibbah Engineering bidding for Penang second bridge

Mini Hyundai of Malaysia, Muhibbah Engineering, was one of the four companies tendered for the second bridge linking Penang island and the mainland. Two other companies were foreign – from China and South Korea. And another local is a subsidiary of Arab Malaysian Bank.

However, Works Minister Datuk Seri S. Samy Vellu said the Government preferred a consortium made up of several companies because the project was huge.

TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse

Opposition should make their stand on IPCMC

mThe Royal Malaysian Police (RMP), which had made known its objection to the setting up of the Independent Police Complaints and Misconduct Commission (IPCMC), has published ten reasons why IPCMC is not needed.

Opposition party in Malaysia should make their stand on whether they support or oppose the setting up of IPCMC. I think oppositon whip would not follow Barisan whip in opposing a suggestion by their counter party.

Blogger Jeff Ooi has list the reason we need IPCMC on his blog.

In The NST, the PM was quoted as saying:

Abdullah stressed that he had reminded Attorney-General Tan Sri Gani Patail to consider all the proposals made. "As far as I am concerned, the IPCMC is important to me. I have handed the matter over to the A-G for his action," he said.

Malaysian Business's Editors-in-Chief, A Kadir Jasin has express his disappointment on some UMNO leader opposed the setting up of IPCMC in Parliament and on the press in his column "Other Thots".

The threat has been removed from Police website: quoted screeshots.

Clearly, even the Prime Minister feel it is difficult to manage such a large police force and UMNO leader feel difficult to offend the police.

It might be time to reconsider my suggestion to let police under state government rather then under federal government.

Related Link: Misyar, Matrade and the IPCMC by TUN HANIF OMAR
IPCMC: Polis lwn Kerajaan by A Kadir Jasin

TechnoratiTag:Commentary competitive Malaysia News and politics Opinion Politik Social

Malaysia Electricity rate should lower than Taiwan

Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik announced the Cabinet's decision yesterday that electricity tariff in the peninsula Malaysia will go up by 12% from June 1.

Oriental Daily has published a schedule comparing Malaysia electricity rate with other country. Malaysia appear to be among the lowest in Asia. Malaysia electricity tariff only higher than Indonesia and Taiwan.

While it is reasonable for Malaysia electricity tariff to be higher than Indonesia as our cost of living is higher than Indonesia. It is surprising to know that Malaysia electricity tariff rate will be higher than Taiwan after the tariff hike.

Taiwan can be consider a develop country in Asia like Singapore. A lot of Taiwan investor invest in Malaysia because of our cost of manufacturing lower than Taiwan before the China boom. Now, our cost of electricity has increased to more than Taiwan. Are we encourage Taiwan manufacturer here to move back to Taiwan if not shift to low cost China.

TNB management should learn from their Taiwan counterpart on how to operate at such a low cost. TNB Key performance indicator (KPI) should benchmark against their Taiwan counterpart.

If such a high cost country in Taiwan able to keep their electricity rate low. There is no reason that Malaysia, a petroleum production country unable to do that.

Recent IMD report show that Malaysia competitiveness is still behind Taiwan despite we have a lower cost of living. Malaysia competitiveness might be deteriorated if our electricity rate is higher than silicon valley of Asia and do not have company like Acer, BenQ, Taiwan Semiconductor Manufacturing Company(TSMC) etc.

Link to this page: Globle Voice Online

Related post : Contradict reveal by Tenaga's chief and Energy Minister
Why Tenaga should be delisted!

TechnoratiTag:Business Commentary Economics Economy Malaysia News and politics Opinion Politik Shares Stock Market klse