Acquisition

Malaysian conglomerate to focus on finance, property sector as media role ruled

PUBLISHED : Monday, 16 June, 1997, 12:00am
UPDATED : Monday, 16 June, 1997, 12:00am

Hong Leong Group, the Malaysian conglomerate rumoured to be interested in Sing Tao Group, said it was wary of expanding into the media business outside Malaysia because of political considerations.


Hong Leong Management general manager Chua Jim Boon said the media business was too politically sensitive to be owned by outsiders.


'There is a political factor in the media field. It is not a regional play,' Mr Chua said.


The group, which runs two newspapers in Malaysia, denied having discussions with Sing Tao Holdings.


Mr Chua heads the operations and planning arm of the Hong Leong Group.


He reiterated that the group's investment in Hong Kong would continue to centre around financial services and property carried out through three listed vehicles: the Guoco Group, Guoco Land and Dao Heng Bank.


'Our recent foray has been property. We are looking at Hong Kong's property market through Guoco Land,' he said.


Guoco Group spent about $1 billion in November on locally listed watch manufacturer Lap Heng Holdings and converted it into a property company.


He admitted the group was a late-comer to Hong Kong's property market.


'Although we are late, it is better late than never,' he said. 'Whether that [Guoco Land] will be a springboard to China remains to be seen.' He said the Hong Leong Group believed Hong Kong's sovereignty change would be a 'non-event'.


'Things will be back to normal or even more exuberant after the handover,' Mr Chua said.


To the Hong Leong Group, the medium to long-term market for investment would be China, he said.


The group's interest in China now focuses primarily on the manufacturing side.


It has joint ventures to produce motorcycles and air-conditioners in China and some property projects in Beijing.


The group is slowly gearing up to enter the China market.


'We don't think being in China first necessarily has advantages,' he said.


Hong Leong Group typifies Asian companies thriving on protected economies which are gradually transformed into a more open and liberalised competitive environment.


It has four groups with separate management structures - Hong Leong Credit, Hume Industries (Malaysia), Hong Leong Industries and Guoco Group.


The group is currently endeavouring to re-engineer and transform it to make it into a globally competitive company.


'For many companies it will not be enough to re-engineer,' he said.


'To survive they will also need to re-invent their core business models to meet rising needs and expectations,' he added.