Another trip back down memory lane
http://www.forbes.com/global/2008/0901/040.html
Singapore's 40 Richest
The Restorer
Lan Anh Nguyen, 08.14.08, 05:00 PM EDT
Forbes Magazine dated September 01, 2008
Wong Fong Fui has made a fortune reviving companies like Boustead Singapore.
Wong Fong Fei
Complete List
By The Numbers
Singapore's 40 Richest
Featured
The Restorer
Palm Oil Pal
Feeling Pains
When Wong Fong Fui bought one of Singapore's oldest companies, Bousteadco Singapore, in 1996, he paid a premium for a piece of Singapore's corporate history. The relic's market capitalization was barely $14 million, but Wong spent triple that amount. "Everyone thought I was a fool," Wong laughs heartily. "Basically we bought the name. We started from scratch."
A dozen years later Wong, 65, whose nickname is F.F., has proved he was no fool. He has transformed the company, now called Boustead Singapore, from a hodgepodge of mostly unprofitable businesses into a well-regarded provider of industrial engineering and infrastructure.
The group has posted record sales and earnings for six consecutive years, up to $311 million and $36 million, respectively, through fiscal year 2008. It has orders for another $560 million in the pipeline. Boustead Singapore's stock has tripled in the past three years. Wong's 32% stake is worth $135 million, enough for him to debut among Singapore's 40 Richest at No. 37.
Wong says there's nothing magical about his success: Using a strong brand name, he offered services to emerging markets where demand for industrial engineering was rising, and won key business. "Generally, I'd say one needs passion and commitment and an ability to identify and deploy capable staff. Of course, it won't work if you don't have perseverance."
Perseverance certainly helped Wong change his own destiny. Born into a poor family that worked on a rubber plantation in Johor, Malaysia, Wong became a tree tapper at age 7. "Life was tough—all I saw every day was rubber trees and mosquitoes. My early objective was to escape it and live in the city," Wong says. He taught himself English by buying a dictionary and studying ten words a day. He woke up at 5 a.m. each morning to listen to the BBC on the radio. He was accepted into a secondary school after he wrote an essay, "My Story." An excerpt: "I tap rubber trees. I see rubber trees in the morning. I see rubber trees in the evening. I see rubber trees every day, day in, day out. Rubber trees, rubber trees. I hate rubber trees."
After graduating from high school Wong went to Australia with his family's life savings to study chemical engineering at the University of New South Wales in Sydney. He says he worked for Esso in Malaysia before moving to England to work for Ralph M. Parsons, an American company that specializes in infrastructure projects.
That's where he met his wife, a Singaporean citizen. They got married and moved back to Singapore in 1973. (He became a citizen in 1986.) Wong started a chemical engineering outfit. He says he showed up at the offices of Indonesian oil and gas companies like a door-to-door salesman to win business. Indonesia was a bigger market for chemical engineering than Singapore, with more industrial companies in need of his services. "I was willing to take risks because I had nothing to lose," he says. After eight years, Wong says he
made enough money, "by my humble standard," to retire at age 40.
But that turned out to be a rare bad decision. Wong quickly got bored and started buying ailing companies and trying to fix them. "I always wanted to try something new and go against all odds," he explains. So he took on the mess at near-bankrupt QAF in 1988 when, he says, its market cap was just over $15 million. The company, which posted an operating loss of $6 million that year, was all over the place, involved in businesses ranging from oil exploration to newspapers to supermarkets. Plus there was drama involving its major shareholder, Brunei's royal family, which was fighting internally over what to do about the business. It refused to give QAF any new contracts or licenses.
Wong, who became an investor and its managing director, homed in on the only profitable piece, a bakery called Gardenia. Within three years QAF had become a food business selling items throughout Asia, including India and China. (In Brunei the business remained diversified.) By the time he sold out to Indonesia's Salim Group in 1996 for an estimated $500 million, QAF had become one of the region's largest food businesses.
He embarked on his next adventure in Myanmar in 1993. He and some investors put up $5 million for a combined 68% stake in the national airline, which didn't even have an airplane; the government owned the rest. Because of the Myanmar junta's involvement, nobody wanted to lend to them. Wong used his Brunei connections to lease a plane from Royal Brunei Airlines and soon had the airline flying. Within five years the generals took back control, but at least Wong and his investors were able to double their money.
These deals earned him a reputation as "one of the most exquisite turnaround specialists," says Tee Fong See, managing director of UBS Singapore and Wong's private banker. Tee, who also heads UBS' wealth management in Southeast Asia, had introduced QAF to Wong.
Boustead Singapore is the latest group to be restored by Wong. Casting about for his next fix-it project, he became intrigued by the aging company, Singapore's second oldest of European origin, in part because of the storied history of the young English entrepreneur, Edward Boustead, who founded the company in 1828. At one time or another it was involved in tin, rubber, palm oil and shipping. It was an agent for insurance giant Lloyd's, as well as one of the first importers of such brands as Tide detergent, Nestlé condensed milk and Moët & Chandon champagne.
But by the 1970s the company was split into three groups, Boustead Plc. in the U.K., Boustead Holdings Bhd. in Malaysia and Boustead Singapore Ltd. The Singapore group got whatever was in Singapore, like shipping and insurance. In the next two decades manufacturing and engineering businesses were added but not much was doing well.
By the time Wong came in, the company was left with "dribs and drabs." The most valuable part, he says, was a group that had the rights in Australia and parts of Asia to distribute ESRI mapping and spatial analysis software. Even that was making less than half a million Singapore dollars a year, one third of the company's profits.
Wong gambled that the storied Boustead name was still worth something. His first thought was to develop Boustead into a food company much as he did QAF. He tried to buy a related food business, Australia's Defiance, 18 months after buying Boustead, but failed. The company got into the bread business under the Bonjour brand, a costly venture that helped push the company into the red.
Wong was forced to concede that his plans had failed, calling it "a difficult learning curve." So he started getting rid of noncore assets, a tough decision as it shrank the size of the group considerably. He closed the marketing and distribution businesses, which had been associated with Boustead for decades. He divested food, insurance and power generation groups.
He shifted Boustead into industrial engineering and infrastructure, establishing new businesses, including one in industrial heater engineering. He also bought existing outfits, such as Salcon, a water treatment company.
Boustead now has projects in 75 countries. One-third of its revenue comes from energy-related engineering, such as solid waste energy recovery, and another third from its division that builds industrial warehouses. Its ESRI distribution business makes up 15%.
Notable deals won in the past 13 months include a $212 million joint venture to construct a 1,164-home township in Libya, a $124 million contract to build a water infrastructure system in Libya and a $42 million bid to build Singapore FreePort, a high-security storage area.
Now that the turnaround is nearly complete, is Wong getting ready to retire or to move on again? He insists no, saying that he plans to finish his career at Boustead, where his two sons also work. Though he is an avid golfer, he says he is enjoying himself too much to give it up. "It isn't the money. I always thought I had a fair share," he says. "It is the fun of being able to do what I do, and to contribute to society."
Homepage
PR Newswire
Even a 10% share of the project will be a decent S$20m contract - probably will have some SGX announcement down the road if any part of the Boustead Group is involved.