Every week, thousands of people throng the 1Segamat mall to shop, socialise and catch the latest blockbuster movie. It is hard to imagine that just five years ago, the building was an abandoned project, a giant eyesore marring the charming town Segamat in Johor.
The abandoned and one-third completed structure and RM200 million in group debt were the legacy which the 1998 Asian Financial Crisis left to Dato’ Tiong Kwing Hee when he took over at the helm of EcoFirst Consolidated Berhad in 2009.
Now the thriving, bustling heart of the town, 1Segamat proved key to the Group Chief Executive Officer’s transformation of the listed property player.
To staunch the red ink, it was imperative to complete the mall, to generate revenue as well as halt the compounding late delivery penalties owed to purchasers who bought units and to restore public confidence. And, as it happened, 1Segamat’s completion in 2011 then opened lenders’ doors once more to a company shunned by financial institutions for 10 years.
Today, EcoFirst has been in the black since 2011, with significant recurring income from 1Segamat and another mall, South City Plaza in Seri Kembangan, and several property development projects underway. And it is in the final stretch to complete its acquisition of an enviable 87-acre parcel of prime land in Ulu Klang, Selangor.
Much of this is due to Tiong’s perseverance. “Perseverance is what makes the difference, regardless of IQ, or EQ or any other Q,” he says.
That was what EcoFirst needed from Tiong in spades. Constructing the rest of 1Segamat seemed an impossible task. When the project was abandoned in 1999, it left numerous suppliers and contractors holding IOUs from EcoFirst, then known as Kumpulan Emas Berhad. They, like the bankers, were reluctant to do business with the company.
“Some of them wouldn’t even take cash upfront. In the end, we had to buy and transport externally everything ourselves,” says Tiong, laughing as he recalls those tough early days.
Every skill and experience Tiong acquired in his three decades of work came into play, from overseeing and driving the project, to finding the cash to finance it, to renegotiating with creditors, suppliers and frustrated purchasers. He was also at the same time talking to other lenders to restructure EcoFirst’s huge debts and reorganise the company’s operations, while to dealing with local authorities and bringing incoming tenants.
Supporting him were the teams he had created and nurtured to execute his vision of EcoFirst’s revival. This is Tiong’s secret weapon in his long career as a turnaround expert — his ability to create effective and dynamic teams within a new corporate culture in an ailing corporation.
Tiong has always put his employees and stakeholders ahead of himself. “Because when I take good care of them, they will in return take good care of my company and me,” he says. “I believe in motivating, developing and inspiring my people to embrace
the new corporate culture I bring. I require them to be passionate and show conviction in their work,” he says. He believes that a flat organisational chart is crucial, allowing him to engage his staff more effectively and easily while keeping the payroll under control.
Born in Sitiawan, Perak, Tiong won a scholarship to the United States of America where he obtained a BA (Hons) in Business Administration and Masters in Business Economics. Returning home in 1983, he started his working life in 1983 at the Malaysian arm of the Singapore-listed Sim Lim group, where he was quickly rose to General Manager in three years.
He then was drawn by opportunities in other fields, from timber to construction, from manufacturing to plantations and education, and was well sought-after for his corporate finance and financial restructuring expertise.
In 2000, Tiong joined Bursa Malaysia-listed paint manufacturer Mercury Industries Berhad as Executive Director to turn it around after 10 years of losses. After he emerged as a substantial shareholder in 2005, within 12 months, the company was back in the black. Mercury went on to post eight consecutive years of profit and a steady dividend yield. In 2009, he was headhunted to turn around EcoFirst.
In December 2011, 1Segamat was completed. Its first week of operations saw some 50,000 people pass through its doors, primarily for its eight-hall cineplex. The cineplex was Tiong’s key strategic move to add an irresistible pull to what was already the only major lifestyle destination in town.
The shopping centre’s smashing success became the key to unlocking access to credit lines from banks. The mall became the catalyst for the group, with its strong cash flow and full occupancy, and the cornerstone for Tiong to rebuild trust in the business world.
It was essential to regain the confidence of customers, shareholders and staff and restore EcoFirst’s business relationships, not just with bankers but with suppliers and vendors too.
Soon after, Tiong got a call from a close friend who wanted to introduce him to a senior banker, Dato’ Mohamad Razali, Chief Executive Officer of the MIDF group. The MIDF Group Managing Director had told Dato’ Razali he wanted to meet the man who turned 1Segamat around, and “‘that is the person whom MIDF should do business with’,” Tiong says.
That led to what Tiong regards as one of his crowning achievements — landing the first loan facility for EcoFirst in 10 years. With his persuasive skills and turnaround track record, and the evidence of EcoFirst’s on-going progress, Tiong has continued to break down banks’ reservations.
He has also carried on with cleaning up EcoFirst’s balance sheet, completing a capital reduction in 2014 and making a private placement of shares with warrants to raise funds.
With 1Segamat and South City Plaza holding up EcoFirst’s bottom-line, Tiong is poised to take EcoFirst to scale new heights. The group has launched Upper East, a luxury condominium in Ipoh’s affluent Tiger Lane neighbourhood, and is in the final stages of completing its acquisition of the Ulu Klang land.
Tiong has come a long way in doing the impossible. But as Tiong likes to say, quoting Nelson Mandela: “It always seems impossible until it’s done.”