Great Malaysian CEOs Part 2

Well, I got a lot of feedback on the CEO issue following my mentioning of Nazir Razak. There have been naysayers who reminded me that the family name and connections played a significant part. I have to say that there are plenty of people who got to the top with just connections and by having the right family name - but the crux is what do you with it.

I have extended the list, its not just GLCs CEOs, but after surveying the CEOs of listed companies in the country, these 4 would be part of the top 5. Hassan Merican would have easily made the list as well but let's just look at the current crop.

Datuk Shamsul Azhar Abbas

was formerly the President / Chief Executive Officer of MISC Berhad and just recently appointed to the top post of Petronas. I can tell you that a lot of observers breathed a sigh of deep relief when his appointment was confirmed as the stewardship of Petronas assets was at stake.

Shamsul holds a degree in Political Science from Science University of Malaysia, a Masters of Science Degree (MSc.) in Energy Management from University of Pennsylvania, USA and a Technical Diploma in Petroleum Economics from Institute Francaise du Petrole (IFP), France. He joined PETRONAS in 1975 and has held various senior management positions in PETRONAS including Vice President, Petrochemical Business, Vice President, Oil Business, Vice President, Exploration and Production Business and Vice President, Logistics & Maritime Business. On 1 July 2004, he was appointed as the Managing Director/Chief Executive Officer of MISC.

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Jamaludin Bin Ibrahim

Jamaludin Ibrahim joined Axiata Group Berhad (formerly known as TM International Berhad) on March 2008 as the President and Group Chief Executive Officer. He is also a board member of Axiata Group. Prior to that, Jamaludin was with Maxis Communications Berhad, which he joined in 1997 and was appointed Chief Operating Officer in the same year, and Chief Executive Officer in 1998. In 2006, he was redesignated the Group Chief Executive Officer to reflect Maxis’ international footprint. He retired from Maxis in July 2007 but remained as a Board member till February 2008.

During Jamaludin’s decade of leadership with Maxis, the company’s revenue grew more than twenty-fold to about USD2.3 billion, net profit grew to about USD600 million and market capitalisation swelled to more than USD11 billion in 2007 (before the privatisation).

Before joining Maxis, he spent 16 years in the IT Industry. He was Managing Director and CEO of Digital Equipment Malaysia (a Malaysian branch of Digital Equipment, then the second largest IT Company worldwide) from 1993 to 1997. Jamaludin also spent 12 years in IBM (1981-93), the first five years as Systems Engineer and then in various positions in Sales, Marketing Support and Management. Prior to IBM, he was a lecturer in Quantitative Methods at California State University, United States in 1980. Jamaludin graduated from California State University in 1978 with a B.Sc. in Business Administration and minor in Mathematics. He obtained his MBA from Portland State University, Oregon in 1980.

Jamaludin is the Chairman of Celcom Axiata Berhad (formerly known as Celcom (Malaysia) Berhad), the second largest mobile company in Malaysia, and sits on the board of PT XL Axiata Tbk (XL) Indonesia, MobileOne Ltd (M1) Singapore, as well as one local university. In 2008, Jamaludin was appointed board member of the GSMA (the global World GSM Association). He was also appointed board member of Multimedia Development Corporation Malaysia (MDeC) in 2009.

Jamaludin earned the accolade of Malaysia’s ‘CEO of the Year’ 2000 by American Express & Business Times and was inducted into the Hall of Fame for ‘Services to the Mobile Telecommunications Industry’ by Asian Mobile News in 2004. He was also named Asian Mobile Operator CEO of the Year by Asian Mobile News Awards 2007.

Amir Hamzah Bin Azizan was appointed President/Chief Executive Officer (CEO) and Director of MISC Berhad on 1 January 2009. He graduated with a Bachelor of Science Degree in Management (majoring in Finance and Economics) from Syracuse University, New York. He had also attended the Stanford Executive Programme at Stanford University, USA and the Corporate Finance Evening Programme at the London Business School, United Kingdom.

Amir Hamzah joined MISC in 2000 and was the Group's General Manager, Corporate Planning Services. Subsequently in 2004 he was the Regional Business Director (Europe, Americas, Africa and FSU) of MISC based in London, UK before being appointed President / CEO, AET Tanker Holdings Sdn Bhd on 1 April 2005.

Prior to joining MISC, he served the Shell Group of Companies for ten years in various capacities including Head of Financial Services and Manager, Planning & Support at Sarawak Shell Berhad, Marketing Credit Accountant at Shell Singapore Ptd Ltd, Internal Auditor at Shell Eastern Petroleum Pte Ltd and Senior Treasury Advisor at Shell International Ltd, London. Amir Hamzah is Chairman of the Boards of major subsidiaries of MISC Berhad, among which includes Malaysia Marine and Heavy Engineering Sdn Bhd, MISC Integrated Logistics Sdn Bhd, Malaysian Maritime Academy Sdn Bhd and MISC Agencies Sdn Bhd.

Amir Hamzah is also Deputy Chairman, AET Tanker Holdings Sdn Bhd. He is also Director of Bintulu Port Holdings Berhad and NCB Holdings Berhad. Amir Hamzah is Board member of UK P&I Club, PETRONAS Maritime Services Sdn Bhd, as well as Executive Committee member of INTERTANKO. He is also council member of the American Bureau of Shipping, and General Committee Member of Bureau Veritas. He is also a member of Management Committee of PETRONAS.mir Hamzah bin Azizan was appointed as the President / Chief Executive Officer of MISC Berhad on 1 January 2009.





Raised in a fishing village, Chia Song Kun graduated from University Malaya with a B Sc (Hon) degree majoring in Mathematics and worked as a lecturer with Mara Institute of Technology before venturing into private education business and co-founded Inti College (now Inti Universal Holdings Berhad). Having been there and done that, Chia decided to return to his roots - the fishery business, and together with his family members, started QL Group.

Chia nurtured and transformed the business into a diversified agro-based Group with interests in processing of marine products, livestock farming and palm-based activities. Adopting a "win-win" approach, QL Group has now become the largest distributor of animal feed and surimi-based products manufacturer in Malaysia, the largest producer of surimi in Asia, as well as a leading poultry egg producer in Malaysia. Its products could also be found in Japan, Korea, Singapore, Brunei, Australia, China, Sri Lanka and Vietnam. Under his visionary leadership, QL was listed on Bursa Malaysia in 2000 and since then, the Group recorded a healthy turnover and net profit 5-year CAGR of 18% pa and 22% pa respectively. Today, QL Group has sales of more than RM1.4 billion, employing more than 3,000 employees.

Under the leadership of Mr Chia Song Kun, QL has developed a business model that has the following sustainability:
• Stable, broad-based and ample opportunity for growth.
• All 3 core activities are based on Malaysian agriculture resources.
• Food-based business is resilient and has full of value adding and export potential.
• Well aligned with government’s initiatives to grow the fisheries & agriculture industry.
• Able to enjoy tax incentives that are available under the agricultural & fisheries sectors.

All About Very Big Ships

Things we don't see very often, the very big container ships business. That is such a difficult industry to be in. You cannot just stop running the ships as most ships are still being paid off. Nothing to ship means zero income but you still have staffing cost. Even if you cut staff and take your ship out, you still have berthing charges, you cannot park your ship anywhere. It is so difficult to tweak "inventory", which is why the shipping rates can go up or down enormously. Even though share prices seem to have been rallying, that is indicative of a better economic environment 12-18 months down the road. Trading is still muted, less goods being shipped means a lot of capacity. The options you have are few, you can take the opportunity to do some ship repairs, but you cannot have zero income on such a huge asset for too long. There are two important developments surrounding these big ships. One is there has been a rapid rate of junking or destroying the ships. Two, is the contango way of using these ships to store oil betting on higher oil prices later on.

With demand for containerships declining given shrinking world trade, the number needed worldwide is falling. The result? Dormant ships, which represent an expensive carrying cost for their owners.Some are destroying capacity. You can take oversupply straight out of the market without the carrying costs of idle ships. So far in 2009 we have seen record numbers of containerships being sent off to scrap yards in India, Bangladesh, Pakistan and China.

Balancing that is the oil storage game. There is a kind of oceanic traffic jam out there among very large crude carriers (VLCCs), with something like 7% of them storing crude oil off the coast of Europe, Asia, or North America in anticipation of higher prices later this year. If the people contracting for such VLCCs are wrong, their carrying costs mount and it becomes likely that they just dump the product on the markets, further depressing prices.

Check the following figure of the current storage situation for both petroleum and clean products, like gasoil. While crude sea storage has declined from its peak earlier this year, clean products are floating out there is ever larger amounts.

I see oil and gas prices coming off a lot in the coming months as the buying seems to be tapering off. Much of the initial euphoria on all commodity prices over the first few months this year has been predicated on the China story. If the rest of the world don't recover faster, we could see too much too much "inventory being stored offshore", and when bad news start filtering through, these contango inventory will be scrambling to cut their losses. There is a carrying cost, and there is a currency issue as well. If you get a suddenly weaker USD coupled with a dipping commodity price trend, you could see a rush for the exits. The contango play is "too obvious" for it to work. Instead of storing real oil and gas in ships, one could really just do a options spread play, buy the current options/futures and selling the same contract 6-9 months down the road. All you have to do is to keep rolling forward the current contract until it matches the future delivery sell contract. If traders can do that so easily, what makes you think that these contango oil gambles will work out just as well? When it is so simple, it usually ends in disaster.


p/s photo: Yuri Ebihara