Richard Leupen turns UGL into world player with help of C.Y. Leung
Richard Leupen has turned small Australian construction firm UGL into a world player, with the help of CY Leung's property consultancy
Richard Leupen's Midas touch has driven UGL from an Australian construction company with 3,000 staff to a global diversified service firm of 56,000 employees.
The 58-year-old engineer-turned-entrepreneur worked for Australian and international engineering companies, including GHD and Kaiser Engineers, before joining UGL as its chief executive in September 2000.
His early career as an engineer and project manager included stints at mining conglomerate BHP Billiton, energy giant Shell and Simcoa Operations, an Australian silicon producer.
UGL was catapulted into the spotlight of the mainland and Hong Kong property industry last December when it bought debt-ridden DTZ - the first real estate adviser to list on the London Stock Exchange, in 1987 - for £77.5 million (HK$974 million).
DTZ, a British property consultancy whose history spans more than two centuries, was extended to Asia after an equity exchange with Asian partners, including the local business of Hong Kong Chief Executive Leung Chun-ying.
Leung, formerly chairman of DTZ Asia-Pacific, resigned from the property consultancy at the end of last year.
After the acquisition, DTZ continued to operate under its name because of what Leupen described as its "strong brand" recognition among local clients. The purchase of DTZ's assets in 145 cities across 43 countries helped UGL become one of the world's top four property consultancies measured by revenue.
The market value of UGL, which is listed on the Australian Stock Exchange, has jumped from about US$95 million when Leupen took office to nearly US$2 billion. It has grown from being mainly a mining construction concern into the management of, among other things, water, power, transport, communications, resources and property. It also has an asset management business for investing funds.
Leupen, who lives in Sydney, talked to the South China Morning Post about the challenge of managing 27,000 employees in 52 countries, and doing business in China.
Could you elaborate more on the reasons for acquiring DTZ?
We moved into property services about 10 years ago. We started from Australia and we went to Asia. We went to Singapore and we went to America. With DTZ, what we were trying to do was to finish building our model in Europe and in China. We didn't have a big position in Europe and we were small in China. With DTZ, we can truly go across the globe.
What's your expansion plan for China?
What's happening in the world of property now is that the clients are getting very big, or getting larger. They are going global. One of the places they're coming to is China. So it's very important for us to do two things. One is to follow the clients from Europe and America coming to China. The other is to follow the Chinese clients going to Europe and America. There's still a lot to do. We're still not in all the major cities. We are now in 18 cities and we would like to be in more.
At the moment we are leaning heavily to the corporate real estate part and we would like to add more of the services UGL does in property management, port facility management, energy management and environmental services. There are 30 very important cities we need to be in.
Do you think that UGL and DTZ can leverage on C.Y. Leung's new role to develop its businesses in China?
CY's history of having set this company up will always be with DTZ. He's been an important part of the history of the company and has been an important part for us in buying the company. I remember the first time that I met him in Singapore. It was in 2007 and I was impressed by what he had built. The company has a very good name. We intend to keep it.
What's the biggest challenge for UGL in doing business in China?
I think the biggest problem is that we don't speak Mandarin. For us, to simply say that it's up to the Chinese partners to speak English is wrong. We should be learning to speak Chinese and understanding Chinese culture. This is simply the biggest barrier than anything else.
China will undergo a once-in-a-decade leadership change soon. What do you expect from the new regime?
The tremendous opening of China brings tremendous benefits to the people of the country. Hopefully, the trend can continue. It's a big thing to let people like us keep investing in China.
You say you prefer to hire locally in each market. Why is that?
We like to be local in local markets. We are operating in 52 countries. With so many cultures, when you put anyone from one culture to the next, he or she will obviously have to learn a lot. If you then go and move them every three or four years, they never learn enough. Therefore, you had better start with locals. We have a strong view that the way to manage a company is to combine [the local hires] with its values and purposes. Join them with our system, such as the IT system, and then run the business with local people and local culture.
Do you plan to develop an asset management business in China?
One thing in our mind is to work with Chinese companies planning to go outside China. Not just Australia, but other markets they would like to go to. So, one way we take asset management is not so much into China, but out of China. Separately, we do, in due course, want to bring our skills into China from Australia as an asset management company. It's a huge market but it has yet to be developed.
What do you do in your spare time?
I have a plan to learn Mandarin. I bought the books and tapes. But it's difficult. You have heard the English and Americans say that it's difficult to teach old dogs new tricks. But it's time for learning. My granddaughter is learning, too. She can be much better than me. Maybe she could be my teacher.