Business Review Asia magazine - April 2017

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April 2017

PIZ Z A HU T HOW PIZZA HUT IS SUCCEEDING IN BECOMING THE FASTEST GROWING, MOST LOVED BRAND IN THE MARKET

DHL ON CHINA'S NEW SILK ROAD

NOKIA'S SMART CITY PLAYBOOK

INDIA'S TOP 10 COMPANIES

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EDITOR’S COMMENT

ASIA CONNECTED HELLO AND WELCOME to the April edition of Business Review Asia. This month explores the potential impact of increased connectivity across the continent.

We speak to Danial Mausoof, head of Marketing and Corporate Affairs for Asia Pacific and Japan at Nokia to discuss the growth of smart cities. In a similar vein, DHL’s CCO Bill Meahl explores China’s ‘belt and road’ initiative and its potential impact on world trade.

Our top 10 this month examines India’s largest publicly-traded companies.

Our cover story this month examines the steady growth of Pizza Hut in Pakistan. Also inside this issue is an exclusive insight into TNB REMACO.

Enjoy the issue!

Nye Longman Editor Nye.Longman@bizclikmedia.com Join the debate on Twitter - @MrNLon @BizRevAsia

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PROFILE TECHNOLOGY

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The birth of Asia’s connected cities

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CAN CHINA’S “BELT AND ROAD” INITIATIVE REVIVE THE FUTURE OF GLOBAL TRADE?

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THE NEW SILK ROAD

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THE NEW SILK ROAD CAN CHINA’S “BELT AND ROAD” INITIATIVE REVIVE THE FUTURE OF GLOBAL TRADE? Writ ten by : B I LL M E A H L , CCO, DH L Edited by: N Y E LONGMAN

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PROFILE

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PROFILE ON JANUARY 18TH, the first freight train from China arrived in London, marking a new highlight on the 12,000 mile China-Europe route that originates in Yiwu, a commodities center in the eastern province of Zhejiang. Mainly loaded with textiles and consumer goods it reached its destination after an 18-day journey, about half the time it would have taken to be shipped via ocean freight.

London is the latest destination in an expanding rail network that connects across countries such as Afghanistan, Kazakhstan, Turkey, Spain and Germany under the “Belt and Road” corridor, a Chinese government initiative under the direct leadership of President Xi Jinping to recreate the ancient Silk Road trading routes.

This rail service is both a complementary and an alternative option to air and ocean transport, offering a costeffective, environmentally friendly solution combined with timely delivery. It is therefore popular with companies shipping more time-sensitive goods, including fashion, automotive and electronics.

Forecasts are promising, with the overall market rail volume expected 12

April 2017

“CHINA’S PLAN TO OPEN UP A NEW AVENUE FOR GLOBAL TRADE ACROSS OVER 60 COUNTRIES WILL REQUIRE FUNDING ESTIMATED BETWEEN $4-8 TRILLION”

THE NEW SILK ROAD

CONNECTING AFRICA One Belt One Road also contains a strong ocean network that will see expanded connectivity across the South China Sea, the South Pacific and Indian Oceans. Alongside increased sea links between Asian countries and Europe across the Maritime Silk Road, East African countries are also set to benefit. Due to their strategic coastal locations, Kenya and Tanzania are already signing agreements to facilitate the movement of goods, and are also making commitments to use renewable energy.

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PROFILE

“THE CONSTRUCTION OF RAILWAYS, ROADS, PORTS, AIRPORTS AND OTHER INFRASTRUCTURE DOES INDEED HAVE THE POTENTIAL TO FOSTER TRADE AND BRING DEVELOPMENT TO SOME OF THE LEAST DEVELOPED PARTS OF THE WORLD”

DHL IN ASIA It almost goes without saying that DHL has a particularly special relationship with Asia. Home to the world’s top technology and garment manufacturers (not to mention rapidly growing home consumer markets) Asia offers myriad growth opportunities. In response to Asian countries containing some of the highest numbers of cross-border shoppers in the world, DHL now offers on-demand deliveries to mainland China, Singapore, South Korea, Taiwan, and Thailand.

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April 2017

THE NEW SILK ROAD

to be around one million TEUs by 2020.

As initiatives go, “Belt and Road” is ambitious.

China’s plan to open up a new avenue for global trade across over 60 countries will require funding estimated between $ 4-8 trillion; however, some experts estimate that it could also generate over $2.5 trillion of annual trade value by 2025, once fully activated.

In an era where protectionism is being hailed by some, Chinese president Xi stood out by speaking up for globalization at the recent World Economic Forum in Davos. The construction of railways, roads, ports, airports and other infrastructure in countries along the ’new Silk Road’ does indeed have the potential to foster trade and bring development to some of the least developed parts of the world. It will create new markets for Chinese exports and jobs for a part of the country’s workforce, but will also open up new avenues for trade to go East.

From a logistics and trade perspective, we welcome the initiative. However, in order for it to develop to its full potential, much needs to be done to ease complexity at borders. Governments and business are called upon to work hand in hand, with authorities focusing on simplifying the crossborder customs, regulatory and infrastructure conditions. Should governments in particular succeed in creating common frameworks and put the implementation of the WTO Trade Facilitation Agreement from 2013 on the top of their agenda, “Belt and Road” might indeed eventually become a boon for global trade.

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TECHNOLOGY

The birth of Asia’s connected cities Off the back of Nokia’s recently published ‘Smart City Playbook’ Business Review Asia speaks to an executive about the implications these developments will have for cities across the region WRI T T EN BY: N Y E LON G M A N

T H E B I R T H O F A S I A’ S C O N N E C T E D C I T I E S

THE WORLD’S URBAN population is facing a slew of challenges. Asia is home to just over half of the global city-dwelling population and 16 of the world’s 28 megacities can be found there. The need to effectively manage the implications of mass urbanisation cannot be understated. With unavoidable pressures such as living space, pollution, and income disparity, internet of things (IoT) technology has the potential to bring about a complete change in how humans interact with one another in urban spaces and in the world at large.

Speaking to Business Review Asia, Danial Mausoof, head of Marketing and Corporate Affairs, Asia Pacific and Japan at Nokia, says, “It is clear that all cities in Asia can benefit from the intelligence that ICT networks can bring to municipal services of all kinds. The challenges brought on by rapid urbanisation are universal, and as a result all cities need to look at ways to make themselves smarter, safer and more sustainable.”

Ready for change?

But how can Asian cities prepare themselves for these revolutionary changes? While city-planners and those who study demographics in detail have been able to refine their forecasting methods over the years, there is no way that all of the outcomes can be predicted.

“It has to be noted that no two single cities have the same needs and plans. Hence, there is no such thing as a ‘blueprint’ implementation for smart cities globally.”

Mausoof adds, “Taking some concrete examples in Asia, it’s impossible to compare what’s being done today in, say, Singapore, Bangkok, or Pune. To get better insight into best practices of benefit to all cities, Nokia commissioned 17

TECHNOLOGY the Smart City Playbook.”

The recent publication provides guidance to city leaders on successful strategies used by other municipalities The study uses examples from 22 cities across the world; those in Asia include Singapore, Pune, Delhi, Wuxi, Tokyo, and Shanghai. Obviously, transforming a city using smart technology is a lengthy, complex process. But Mausoof says, a number strategies can be generally applied.

“Notably, the study found that successful cities have established open and transparent rules for the use of data (on which all smart cities are dependent) by government departments and third parties, whether shared freely or monetised to cover data management costs.”

“Perhaps the biggest challenge cities must overcome is determining how best to share data. Smart cities are extremely dependent on data, and establishing open and transparent rules for the use of such data – while also ensuring privacy – is of paramount concern.

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April 2017

“However, management of the huge amount of data necessary to make safe city scenarios successful can be costly, so putting a process in place that is economically sustainable is also absolutely critical.”

Governments should avoid creating silos, he explains – an idea that gets right down to the concept of connected cities itself.

Administrations should aim to include as much of the citizenry as possible.

Successful examples of smart cities have made a special effort to highlight the incoming benefits, particularly projects that deliver highly visible improvements such as smart lighting and smart parking.

Engaged innovation In order for smart cities to progress, everyone needs to be engaged in the process – from the companies providing the technology, through to the citizens who will adopt it.

“Governments need to go well beyond making the benefits of smart city strategies known,” Mausoof

T H E B I R T H O F A S I A’ S C O N N E C T E D C I T I E S

“ASIA IS HOME TO JUST OVER HALF OF THE GLOBAL CITYDWELLING POPULATION AND 16 OF THE WORLD’S 28 MEGACITIES CAN BE FOUND THERE” adds. “They need to actively engage city residents in the process of setting priorities and identifying the benefits for themselves.”

Community engagement is key, he adds. Smart city projects should be inclusive, participatory, and social.

Governments may launch digital equality initiatives and organise end-user education, let locals participate in technology and field trials, and – most importantly – get meaningful feedback. It is no use building a technologically advanced, complex 19

TECHNOLOGY city that neglects its raison d’être – citizens.”

Mausoof concludes, “The research for the Smart City Playbook found that some of the more successful smart city initiatives involved the establishment of a single body to oversee the initiative that brought together government, businesses and citizens in a collaborative fashion to ensure that all parties’ interests were considered.”

“Nokia is highly qualified to play a formative role in the smart city market and we are doing just that,” Mausoof explains. Smart cities across the world face the challenge of providing seamless connectivity for a wide range of devices - particularly those of a mission-critical nature on which lives may depend. With its track record of providing fixed and mobile broadband networks – as well as being an early leader in 5G technology development, he is confident of Nokia’s ability to lead the industry.

“Similarly, the Internet of Things will be an essential component of any smart city strategy,” he adds “Nokia has already established substantial expertise in addressing the challenge of managing the millions, and likely billions of connected devices that will be used to provide data and support smart services in cities.”

Having outlined a number of strategies for successful smart city implementation (grounded in real life, repeatable scenarios) Nokia has advanced its position as an IoT and technology leader one step further. With constantly growing urban populations, Asian countries need to ensure that any long term strategy takes into account the transformative power that connected development can unleash.

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T H E B I R T H O F A S I A’ S C O N N E C T E D C I T I E S

“NOKIA IS HIGHLY QUALIFIED TO PLAY A FORMATIVE ROLE IN THE SMART CITY MARKET AND WE ARE DOING JUST THAT”

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COMPANIES

INDIAN

TOP 10

BUSINESS REVIEW ASIA EXPLORES THE SUCCESS OF THE TOP COMPANIES ON INDIA’S NATIONAL STOCK EXCHANGE (NSE) Writ ten by: NYE LONGMAN

India has one of the world’s leading economies; in fact, it has just overtaken its old colonial ruler Britain as the fifth largest in the world.

Facilitating the growth of the country and its leading companies, the National Stock Exchange (NSE) is India’s largest and is also the fourth largest in the world by equity trading.

Ranking the 10 largest Indian companies on the NSE by market capitalisation, Business Review Asia takes an in-depth look at what makes each company tick.

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TOP 10

Coal India Limited (CIL)

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Hindustan Unilever (HUL) India’s largest FMCG company, Hindustand Unilever has been in the country for almost a century and claims to have contact with two thirds of the country’s population of 1.25 billion. Employing over 18,000 people in India, the company’s brand portfolio covers a diverse range of brands, from drinks, packaged foods, and cosmetics, to an assortment of toiletries. The company undertakes a number of social activities across the country and is perhaps most notable for its support of India’s first transgender music band, through its Brooke Bond Red Label tea brand.

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Coal India Limited (CIL) started around 40 years ago when assorted privatelyowned mines were nationalised. With a presence in 82 mining areas CIL, consists of seven fully-owned coal producing subsidiaries supported by its own mining planning and consultancy company. Effectively owning a monopoly in a subcontinent rich in the resource, CIL produces around 84 percent of the country’s coal. Alongside its mines, CIL’s management expertise is deployed across a number of other industry segments including workshops and hospitals. The company owns 26 technical and management training institutes and over 100 vocational training centres.

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T O P 1 0 O F F S H O R E W I N D FA R M S

08 HDFC

Housing Development Finance Corporation is one of the country’s major housing finance lenders. The bulk of its offering to customers focuses on loans, mortgages, life insurance, general insurance, and mutual funds. It has won numerous awards over the years, including one for having the ‘Best Board in India’.

State Bank of India (SBI) A Fortune500 company, with around 20 percent of India’s market share in deposits and loans, State Bank of India has over 200 years of history. While its offering is similar to that of HDFC Bank, SBI’s reach is not only confined to its home country; its operations have grown to span 36 countries and 191 offices.

Alongside traditional banking activities, SBI has operations that cover funds management, commercial services, capital management, and a number of insurance services.

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TOP 10

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Infosys Technologies Limited Another Indian multinational, Infosys provides a number of technological services, including business consulting, information technology and outsourcing. With almost 200,000 employees across the globe (including a significant presence in the USA) the company has strong partnerships with IBM, Oracle, Microsoft, and SAP. Services-wise, Infosys is expert in big data, cloud, customer services, commerce, and procurement.

Industries that benefit from these include oil and gas, retail, and automotive. Recently, the company has announced that it sees India as a potential market for rolling out automation services.

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Oil and Natural Gas Corporation (ONGC) Another company owned and administered by the Indian Government, Oil and Natural Gas Corporation is responsible for processing the country’s reserves – both of which are available in respectable quantities.

Alongside exploitation of India’s natural assets, the company has an international reach, through a range of subsidiaries. ONGC has operations in Africa, Greater Asia, the Middle East and South America.

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T O P 1 0 O F F S H O R E W I N D FA R M S

HDFC Bank

ITC

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ITC is a diversified Indian conglomerate company specialised in FMCG, hotels, packaging, IT solutions and agri-business, having originally focused solely on tobacco. For the past seven years, ITC has pioneered expanding internet access to some of India’s poorest and claims to have reached millions through providing internetready computers to thousands of villages. It employs nearly 30,000 people across the country.

The Housing Development Finance Corporation Limited (HDFC) Bank was one of the first banks in the country to receive approval to open up banking in the private sector and, since then, it has gone from strength to strength. With a user base covering some 37 million people, the bank provides a broad portfolio of services to every segment of Indian society.

In recent months, the bank has embarked on a wide-ranging digitalisation drive. This includes rolling out a new digital Omni-channel banking platform. Nitin Chugh, Country Head of Digital Banking at HDFC said: “Our digital banking objective is to provide our customers enhanced experience across all technology and digital touch points.�

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TOP 10

Reliance Industries India’s third most profitable company, Reliance Industries is a conglomerate with interests in energy, petrochemicals, textiles, retail, and telecoms. With such a diverse amount of companies and partnerships, the company is responsible for around 20 percent of India’s total export volumes. Using its massive scale, the company was able to sell over seven million of its Lyf smartphones in a single year. It has an AAA domestic credit rating from Fitch.

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T O P 1 0 O F F S H O R E W I N D FA R M S

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Tata Consultancy Services (TCS) One of the world’s ‘Big Four’ IT services companies, Tata Consultancy Services (TCS) accounts for as much as 70 percent of Tata Sons’ revenues. With a whopping 67 subsidiary companies, TCS has a range of technological capabilities which include building and maintaining applications, engineering, business consulting and outsourcing, as well as IT infrastructure and asset leveraging. With well over 370,000 employees in 46 countries, TCS is a truly global employer, partnering with a number of leading universities at home and abroad, particularly in the US. 29

d n a s r a e y 5 2 o t d a o r e th g f l #m

Wadlow m o T y b epper P Written s e m a

by J Produced

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PIZZA HUT IS CELEBRATING A QUARTER OF A CENTURY IN PAKISTAN, AND WHILE ITS LEGACY REMAINS STRONG, THE RESTAURANT BRAND IS STRIVING FOR #MLFG – TO BECOME THE MOST-LOVED, FASTEST-GROWING IN THE MARKET

F

rom night-time cocktail bars in the UK to robot waiters in China, the Pizza Hut brand is making its mark all around the world. The most iconic international pizza brand has become a household name for millions of people, and 2017 marks 25 years since arriving in Pakistan.

Now firmly established in the country, the past year in particular has heralded substantial growth and regeneration, with the year ahead showing no sign of losing that momentum. Enter Tony Ozanne, Chief Operating Officer (COO) at Pizza Hut Pakistan, owned

by MCR Pvt. Ltd. and under the Yum! umbrella of food brands.

Tasked with making sure the company stays clear of increasing

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local competitors and continues to offer relevance and quality to customers, Ozanne’s remit can be condensed into the hashtag #mlfg – the global Pizza Hut ambition to become the most-loved, fastest growing food brand. Despite being able to build on 25 years of heritage, the Australian COO arrived with timely added urgency in January 2016.

“Pizza Hut has gone through two franchise terms and is the first international brand in Pakistan, so over the years it may have rested on its laurels a little,” he explains.

“Competition has come to the market so we’re getting things up to speed.

FOOD & DRINK

2,500 Our existing assets are a massive opportunity and Yum! has also tasked us with a fairly aggressive expansion plan regarding new stores as well. This has been my focus for the last 12-14 months, at the same time focussing on enhancing the operations and staff standards whilst building a culture of recognition.”

Seemingly destined for primary school teaching, Ozanne decided to pursue a career in the food industry instead, with another of Yum!’s brands the springboard to where he is today.

NUMBER OF EMPLOYEES AT PIZZA HUT - PAKISTAN

“I started when I was 15 as a casual cook at KFC in Australia when I was going through school and university.

I graduated as a primary teacher but never taught because I got offered an assistant manager job at KFC. I worked my way up with KFC and ended up in Dubai in 2002 working with Yum! This is where I first came into contact with Pizza Hut in the Pakistan market as I was working alongside the franchisor.”

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AN EPITOME OF CLASS, SOPHISTICATION AND LUXURY New City Housing Society is an ideally located gated community in the heart of Wah, Pakistan. The community, spread over a 1000 acres, is aesthetically planned and efficiently designed to bring affluence in living standards with luxury and practicality of a modern lifestyle.

A mere 20 minutes’ drive from Islamabad, the capital city, New City Housing Society offers elegant architecture complete with world class amenities, recreational amusements and an enthralling night life that gives you ‘more value for your investment’.

www.newcity.com.pk

FOOD & DRINK

LANDMARK Though acknowledging that there is much more to come from Pizza Hut in Pakistan, a 25-year birthday celebration is not to be taken lightly.

Indeed, Ozanne outlines plans to make the most of the landmark anniversary.

“Our International President Milind Pant is coming over to mark the occasion,” he says, “and we’re also planning year-long activities such as special promotions and messaging.

This is a great chance to celebrate our heritage and refresh interest

in Pizza Hut at the same time.”

The year leading up to this point has witnessed some other important milestones. Not only is Pizza Hut the longest-standing international food brand in Pakistan, it is also the largest with 72 stores, 16 of which being new additions built in 2016.

1992

THE YEAR PIZZA HUT PAKISTAN WAS FOUNDED

Š2017 Welbilt, Inc.

Welbilt Bringing innovation to the table | welbilt.com

FOOD & DRINK

MOMENTUM Such growth is set to continue this year. Ozanne reveals that 13 stores will be opened with another 11 refurbished, while 2018 will see another 14 new stores, taking the total up to 99. “We may sneak another one in there to hit the 100 mark,” he quips.

By the end of 2018, almost all of the company’s restaurant estate will either be new or refurbished, fitted with enhanced décor and modernised features for staff and customers.

The size of stores is also shifting to meet modern consumer demand.

“Traditionally Pizza Hut has been a destination restaurant with massive assets sometimes two, three, even four storeys high, capable

of seating hundreds of people,” says Ozanne. “But times have changed and now dining in is sitting alongside delivery and takeaway, so we’re reducing the size of new assets to accommodate this. We’re looking at anywhere from 40-80 seats as opposed to hundreds.”

New sizes, structures and operating models brings with it the opportunity to explore new concepts for sites as well. Ozanne refers to a ‘super delco’ which is a delivery and takeaway outlet that still has seating and table service, something which he

w w w. p i z z a h u t . c o m . p k

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P I Z Z A H U T - PA K I S TA N

Karachi LOCATION OF PIZZA HUT PAKISTAN’S HQ

The most loved and fastest growing restaurant chain in Pakistan 40

April 2017

pointed out as important to maintain.

Indeed, there are only a very small number of delivery/takeaway only units, Karachi being the city where this has seen the most success.

Other concept ideas recently discussed with Yum! include motorway sites and units made from non-traditional materials such as shipping containers. Joint ventures with entertainment venues such as cinemas are also being considered.

FOOD & DRINK

NEW PLACES NEW PEOPLE While the big cities such as Karachi, Lahore and Islamabad are important focal points where Pizza Hut is most established as a brand, it is the smaller cities that hold the most potential for growth. “These may be places with two or three million people but who have never seen an international food brand before,” Ozanne adds. “They will be familiar with pizza of course, but Pizza Hut will be totally new to them. This creates a set of new challenges from supply chain and logistics through to marketing and education of our brand.”

Around half of the 13 new store locations for 2017 have been decided.

It is a challenging process which involves careful consideration of an array of factors, from supplier networks and energy supplies to footfall and scope of local competition.

One might believe that recruitment poses another challenge when opening a new store. However, for Pizza Hut in Pakistan, the opposite

has been the case.

Ozanne explains: “The recruitment side isn’t actually a big challenge for us, and being part of a big group with Yum! is a big benefit in terms of training provision. If we put an ad out locally and say we are recruiting, there are lines down the street of people wanting to apply, so we have the luxury of being able to filter out the best candidates. We have international brand appeal, so getting people to join us is not an issue.”

The international brand appeal of Pizza Hut can in fact present a retention challenge in some instances, for ambitious local competitors may be willing to prize away employees.

However, the development of new stores and resultant recruitment drives carries with it a positive message to the new communities Pizza Hut is arriving in. “We also hire a lot more staff per store here than we do in other locations such as Australia,” Ozanne adds. “We can have anywhere up to 20-30 people working in a store at any one time, with 15 riders waiting on deliveries.”

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Tony Ozanne Chief Operating Officer Ozanne started working at KFC Australia as a casual cook in KFC Bendigo back in 1985 whilst at school and university, Tony decided to pursue a career in the food category versus the Primary School degree he graduated with.

This saw the opportunity to grow the management and multisite management experiences around Australia and the world, with a 5 ½ year stint in the Middle East giving the first exposure to Pizza Hut after a long KFC career.

Tony has worked with the franchisor side (Yum) and franchisees in both brands (KFC-Pizza Hut) with an operations background and multi country responsibilities in Melbourne, Sydney, Perth, Canberra and the Middle East, North Africa and Pakistan.

In 2002 Tony left the industry to start his own Business Coaching business in Canberra working with small- medium sized businesses before being lured back to the Yum family working as Chief Operating Officer in Pakistan since January 2016.

FOOD & DRINK

BRAND OF CHOICE Asides expanding Pizza Hut’s physical presence, Ozanne is seeking to add more relevance to the brand and bring pizza to a larger number of Pakistani consumers.

One of the major ways of doing this, and something backed up by extensive consumer research, is developing a value offering that is more affordable to working locals.

“Other Quick Service Restaurants (QSR’s) have had a lot of success with this and it has opened up a new layer of customers with cheaper offerings,” Ozanne comments. “The challenge of price is one where we are constantly seeking to develop offerings of value, creating bundles and deals which focus on quality full meals for the family and allow us to compete more with the traditional QSR’s on a per head price basis.”

However, for Ozanne, the key to making this work for Pizza Hut is to successfully cater for local tastes.

“We’re seeing how we can reinvigorate products to an entry level so we can get people sampling what we have to offer,” he continues, pointing out that almost 80 percent of pizza sales come from just four topping choices which all appeal to the localised palette: Chicken Fajita, Chicken Supreme, Chicken Tikka and Fajita Sicilian. Pizza Hut has

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P I Z Z A H U T PA K I S TA N hit a sweet spot with spicy chicken flavours in particular, unique to Pakistan’s restaurants and something which can be exploited further.

Another means of adding relevance to consumers and bringing more people in contact with the brand is through technology, particularly digital services. “Our online business is growing all the time and there are still opportunities for us to enhance the offering on the website,” says Ozanne. “Upwards of 10 percent of orders are now coming via the website and this trend is

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continuing to grow.” Pizza Hut Pakistan is also working on an iOS version of its app, having successfully released an Android version.

Technology behind the scenes can help improve the customer experience, too. Ozanne and his team will be looking at bringing systems up to date, for instance reporting and integration of manual processes. A specific area this could enhance is the processing of online orders, which is currently delivered manually through call centres rather than being automatically sent to the appropriate restaurant kitchen.

Rollout of free Wi-Fi and even introduction of charging stations

FOOD & DRINK

for devices are among other considerations.

This will all aid in the battle to compete with local competitors, especially the copycat challengers who adopt very similar concepts and appearances. With legal protection of copyright not the same as it is in other markets such as the UK, Pizza Hut has little choice but to differentiate itself through quality and appeals to its rich heritage.

“We have to take some of these local competitors seriously as some

of them are growing quickly and are up to the 20s in terms of store count,” adds Ozanne. “Some of them have very similar branding and logos to Pizza Hut, and this is also a problem for the likes of KFC and McDonald’s.

It is our job to make people aware that we are the original Pizza Hut with the 25 year-legacy and our standards have to reflect that as well.”

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P I Z Z A H U T PA K I S TA N

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FOOD & DRINK

ANOTHER 25 YEARS What will Pizza Hut Pakistan look like in another 25 years’ time?

While Ozanne confirms that robot waiters may not be an immediate priority as they are in China, he does see tremendous opportunity to maximise the brand’s reach.

But how much Pizza Hut can the Pakistani market accommodate?

“Perhaps 150-200 standalone restaurants is a stretch, simply because of the market’s ability to absorb that many Pizza Huts.” The company is already based in 24 cities across Pakistan and evaluating many outstation locations, which have to be proven viable. “There may be 180 million people living in Pakistan but

the number of people that can buy pizza is far less than this, especially considering the rural populations of the country,” Ozanne adds.

Nonetheless, the scope for different style setups is a lot larger, as Ozanne concludes: “I think if we start looking at non-traditional stores then this number could look more like 300400. Kiosks and partnerships with other venues would be key for this to happen. Pizza Hut was especially iconic 10-15 years’ ago, and now we are a generation further down the line so people are growing up with Pizza Hut being familiar to them. There is a great opportunity to build on this heritage.”

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MAINTAINING

POWER Written by Wedaeli Chibelushi Produced by Vince Kielty

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TNB REMACO

WE INTERVIEWED TNB REMACO’S MANAGING DIRECTOR ANUAR YUSOFF ABOUT THE COMPANY’S DIVERSIFICATION PLANS

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NB Repair and Maintenance Sdn. Bhd. (TNB REMACO) is constantly diversifying itself in riding the changing landscape of the industry. Leveraging on technological development and clientele everchanging expectations, TNB REMACO is set to become a premier brand with holistic solutions in delivering customer’s trust in its services.

TNB REMACO is wholly-owned by Tenaga Nasional Berhad (TNB), of which is the largest electricity utility in Malaysia and one of the largest in the region with an asset base totaling USD30 billion and customer base of more than three million users. TNB REMACO was first incorporated as a subsidiary of TNB in 1995. The company is managed independently as a business organization within the corporate structure of the TNB group.

While it shares the group’s core vision, values and culture TNB REMACO nonetheless remains steadfast in the

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realization of its own corporate destiny.

Managing Director Anuar Yusoff explains the transformation in structure: “TNB REMACO used to be a small department supporting TNB generation. We did repair, maintenance and overhaul for their generating plants - their gas, steam and hydro turbines. It was in 1995 when we became a wholly owned subsidiary of TNB that we diligently gearing our resources and expertise in realization of the vision and mission of the company.”

How does TNB REMACO balance diversification with loyalty to its parent power plants? “Previously, we are exclusively servicing TNB’s existing fleet of power plants but has expanded our services for newly developed power plants and has also actively providing services to independent power producers (IPP’s) such as Malakoff and Powertek, as well as oil and gas (O&G) sector,”

ENERGY

ANUAR YUSOFF

MANAGING DIRECTOR TNB REPAIR AND MAINTENANCE SDN. BHD. (TNB REMACO)

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Anuar Yusoff explains. Among the O&G clients serviced by TNB REMACO are Petronas Gas Berhad (PGB), Petronas MLNG and GE Power.

Not only is TNB REMACO diversifying from the traditional energy market, it’s also exploring different geographical spaces. “In the middle of 2004, we started going into international markets,” Anuar Yusoff explains. The company has business presence within the SouthEast Asia and MENA (Middle East and North Africa) region, such as in Myanmar, Singapore, Brunei, Indonesia, Yemen, Kingdom of Arab Saudi and Vietnam. Anuar Yusoff explains that TNB REMACO’s goal is to achieve 10 to 20 percent growth from overseas businesses: “I have to look at every opportunity to grow business locally as well as internationally. For the last three years,

we started going aggressively into the Middle East,” he says. Currently, TNB REMACO has three operations and maintenance (O&M) contracts in Kuwait, two in Pakistan and one in Kingdom of Saudi Arabia.

Although TNB REMACO has built a global presence, its roots are firmly planted in Malaysia: “As of December 2016, we have executed a contract for a Long-Term Service Agreement (LTSA) with Petronas Gas Berhad (PGB), the national petroleum company of Malaysia,” Anuar Yusoff says. PGB awarded a MYR160 million contract to TNB REMACO for the maintenance of its gas turbine and related equipment for Central Utility Facility (CUF) in Gebeng and Kerteh, for a duration of 6 years.

“Customer requirements keep on changing,” Anuar Yusoff says. “They keep on pushing their expectations.

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ENERGY

For an example, TNB used to carry out a planned maintenance outage for roughly 50 days in the late 80s, but now client requested for a shorter outage period, and we have to work 24/7 to fulfill their requirements. To support that, we need to have highly skilled and dedicated personnel, and the latest equipment.” When the petroleum price rise in the early 2000s, TNB REMACO losing some of these employees to the O&G sector.

However, the firm worked hard to develop teams of adept and robust personnel, and during the last five years has managed to maintain a low turnover. Anuar Yusoff adds, “We have a good remuneration package that is within the best in Malaysia. In terms of competencies, we have a systematic training system which is conducted by TNB owned technical training centre, namely ILSAS. We have a training module where for the first three years of entering into TNB REMACO, all personnel will enrol into dedicated training modules that covers both

technical and management courses.”

And in embracing the rapid development of the technological changes, TNB REMACO is keeping abreast with the changes by continuously developing highly skilled personnel. “In terms of technology adaption, we regularly maintaining the integrity of that equipment by sending our personnel for various training and certification program, as we definitely cannot afford to have failed equipment or incompetent personnel,” Anuar Yusoff explains. TNB REMACO also has established a comprehensive condition monitoring program for its client in ensuring reliability and efficiency of their equipment. TNB REMACO also prides itself by having a Repair Centre, which is located in Connaught Bridge, Klang. The Repair Centre can be considered a gem for the industry in view of its capabilities for performing various repair and refurbishment activities.

TNB REMACO is collaborating with Original Equipment Manufacturers

1,000

Number of employees at TNB Remaco

TNB REMACO (OEM’s) for refurbishment of turbine parts and its components, apart from capability to perform bearing re-metalling, and reverse engineering services, just to mention a few of Repair Centre’s capabilities.

TNB REMACO also prides itself on having a varied field of services offering to the potential customers.

Anuar Yusoff says: “We call ourselves a one-stop service provider - any client in energy related industry can utilize our expertise and services. We can assist them to design and build a power plant, perform the O&M of the power plant, conduct scheduled maintenance for the equipment, perform the test and diagnostic activities and also refurbish the turbine parts. At the end of the power plant life or its Power Purchase Agreement (PPA), TNB REMACO can also perform the decommissioning of the power plant and sell the parts. In a nutshell, TNB REMACO is capable to perform various activities during the whole life cycle of the plant”.

We ask Anuar Yusoff whether TNB REMACO has reached its full capacity. “Our target revenue in 2020 will be MYR1.9 billion and we will be

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going more aggressively to overseas market, especially Pakistan,” he stated. TNB REMACO also wanted to increase its presence in the oil and gas industry. Currently, its revenue comprises approximately 90 percent from power sector and only 10 percent from oil and gas sector.

“In the current market condition for O&G sector whereby the petroleum price is dipping below USD60 per barrel, there is a promising chance for us in offering our services to the industry players. This is due to the fact that most of the O&G

ENERGY

“WE CALL OURSELVES A ONE-STOP SERVICE PROVIDER - ANY CLIENTS CAN UTILIZE OUR EXPERTISE AND SERVICES” companies are currently opening its door for alternative service providers rather that exclusively engaging the OEMs, of which is of premium pricing,” Anuar Yusoff says.

TNB REMACO also aspired to establish its name in EPC (Engineering, Procurement and Construction) business. “We aspire to be one of the reputable EPC contractor, because before this we were more involved in the Project Management and Consultancy (PMC), but not in the construction side. We are currently preparing ourselves

to enter into the EPC business.”

Anuar Yusof’s vision for TNB REMACO is clear, and the expansion of business plan for TNB REMACO was built on a solid track record and coupled by its impressive expansion strategy. TNB REMACO is no longer in a single market platform, and has huge potential to grow rapidly whether it be internationally or into other sectors. We can’t wait to see what TNB REMACO does next.

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MAKING FITNESS FUN Written by Nell Walker Produced by Mariana Lee

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CELEBRITY FITNESS

MARTIN DARBY, CEO OF CELEBRITY FITNESS,TELLS US HOW THE BRAND’S UNIQUE APPROACH TO EXERCISE HAS ALLOWED IT TO DOMINATE SOUTH-EAST ASIA

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ven the fittest and most dedicated gym-goer is bound to admit that working out sometimes feels like a repetitious chore. While some fitness centres – often few and far between – make an effort to include more exciting classes and programmes, none can boast such an eclectic and engaging selection – and on a mainstream scale, no less – than Celebrity Fitness.

Celebrity Fitness was registered in Indonesia in 2003 by John Franklin, John Joseph Sweeney, and the late Mike Duane Anderson, a trio which previously worked for another popular Asian fitness brand, California Fitness. They had approached their own boss asking if he would consider expanding to Indonesia; he declined, and so Franklin, Sweeney, and Anderson decided to strike out alone, creating an entertainmentstyle fitness centre developed with Indonesian characteristics in mind.

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The company has since expanded to 62 locations across Indonesia, Malaysia, Singapore, and soon the Philippines, swiftly overtaking Fitness First to become the number one local fitness chain. In 2010, a Brit named Martin Darby became CEO, and has spent the past seven years guiding and shaping that development.

“It’s a truly unique brand,” he says. “It’s hard to describe without experiencing it, but it’s an eclectic mix of sound and light; it’s very much a studio-based concept including disco lighting and popular music, with an Asian bias towards K-pop. We have a Mask Dance class that’s like a Venetian ball, the Insanity programme which is a bit punky, the Seduce which is more of a sexy Latino dance, alongside more mainstream popular classes. It is very much a dress-up, immersive, community-driven and exciting fitness centre which is less about the hard work that’s

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H E A LT H C A R E

normally associated with exercise.” a country that’s 97 percent Muslim, Some of the other unusual and so the places people in the UK may wonderful features of Celebrity go to meet friends such as going to Fitness include a drumming-for-fitness bars and clubs are not as popular. An class called Drums Alive, fun boot interactive fitness centre fills that void.” camp, Floating Yoga which allows Another reason for the brand’s 360 degree yoga, a hardcore cycling appeal is the ever-changing roster programme for time-poor members of activities available that ensures called Race 30, a dance academy, continued interest from members and virtual classes enabling staff alike. Celebrity trainers to run their Fitness has formed programmes remotely, relationships with and many, many others. inventors in the United It sounds like a dream States, with whom the for those of us who company will work on find gym environments a piece of equipment uncomfortable and and commit to buying The year that intimidating, but a number of the end Celebrity according to Darby, product in exchange Fitness arrived in Indonesia Celebrity Fitness isn’t for at least six months so much filling a gap of exclusivity. By that in the Asian market – it is the market. time, Celebrity Fitness will know “There’s a concept in London which whether the item works and is popular is not dissimilar, but there, it’s niche,” thanks to member feedback. he explains. “Out here Celebrity “Every quarter our members ask the Fitness is a mass market brand, same question: ‘what’s next?’,” says whereas brands that are more globally Darby. “We survey them, have regular famous like Virgin Active, are the more social media contact with them, and niche players. One of the reasons of course talk to our instructors and for our popularity is that Indonesia is personal trainers. We have to search

2003

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CELEBRITY FITNESS

“While some gyms don’t allow phones, we encourage people to share their experiences and selfies – which we call Selfits ”

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the world for new ideas, particularly in the US where we regularly visit, but really, this business is like fashion: nobody truly knows what’s next.

“The key for a brand like Celebrity Fitness is keeping it fresh. That’s a full-time commitment. It’s about exclusivity, fun, constant change, being nimble, and keeping that interest going. That’s why people come back.”

Celebrity Fitness puts as much effort into keeping its staff happy as the members, with a reward system called STAR – Spirit, Talent, Attentiveness, and Respect – which has recently been refreshed and renamed STAR FISH to include more specific customer service elements.

It allows them to earn badges,

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adding value to their job role and ensuring they also enjoy the experience as much as the customer.

The business takes its influence even further outside of the gym, by teaming up with charitable organisations and awareness-raising movements and using its mainstream influence for good.

“In Malaysia we do a lot with FIT Malaysia, which is a government initiative that’s concerned with obesity and diet,” Darby explains. “We also work with The Kidney Foundation, AIDS awareness, and particularly breast cancer awareness because we’re very female-orientated. Our members can be 60-80 percent female, so we have a campaign called #powertothegirls which raises awareness as well as female empowerment. That is especially exciting in countries where female empowerment still isn’t that common a concept.

“Hashtag campaigns are becoming so big here; Facebook is huge in southeast Asia, with Instagram and other such platforms gaining popularity.

While some gyms don’t allow phones, we encourage people to share their experiences and selfies – which we call Selfits – which is great marketing coming from confident people who are proud that they attend the gym. In the early days, Celebrity Fitness

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was so named because celebrities used our gyms; now, it’s because everybody wants to be a celebrity, and with how huge social media is over here, you can be a celebrity.”

Now, Celebrity Fitness’s main priority is expanding into second tier cities, thus stretching the power of the brand but still managing to maintain interest and excitement in smaller environments. This offers the company’s international experience to people who have never seen anything like it. It has also recently announced a merger with Fitness First Asia, furthering its reach: “Now

the combined company has full Asian rights,” Darby concludes, “so we’ll be looking towards China, Taiwan, Vietnam, Korea – there’s lots of potential growth as the middle class grows here, continuing to open up opportunities. It’ll be a mixture of finding the right new market that both brands can go into, and building on what we have.”

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THE BUSINESS

OF HEALTH Written by Nell Walker Produced by Mariana Lee

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We speak to Union Medical Healthcare about the services it provides and the ways in which it has dominated the market

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nion Medical Healthcare Ltd is the largest aesthetic medical service provider in Hong Kong. Founded in 2005 by CEO Mr. Eddy Tang, the company started with just one building housing a single doctor, and UMH boasts 29 locations with 44 doctors within 12 years. A medical-centric business from the beginning, UMH has been able to differentiate itself from beauty salons and spas thanks to the reliability inherent in having medical professionals on hand – professionals who are committed to the company’s values and protocols.

UMH offers a wide range of aesthetic, medical, dental, chiropractic and health management services, having become number one for injections in Hong Kong and Hong Kong’s Top Service Brand of 2016.

Importantly, the business was set up by a team with diversified backgrounds in business, beauty, and technology, which has contributed enormously to UMH’s success. Tang has over 13 years of experience in the beauty industry, CIO Mr. Ben Luk spent more than 12 years with Google, COO Mr. Gabriel Lee was with Cathay Pacific for 14 years, and Mr. Vam Cheng, General Manager of the Medical Department, has over 20 years of experience in the pharmaceutical

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900

The number of employees working for Union Medical Healthcare Group

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industry having worked in Allergan.

This extensive familiarity with the necessary industries has ensured enormous growth and a bright future for UMH. Ms. Karen Chui is the director of Corporate Finance and Investor Relations at the company, with a decade of investment banking and healthcare experience behind her, and speaks to Business Review Asia about how this enviable level of expansion has been achieved.

“Our strength is to offer medical service embedded with customer service,” she says. “We are the best in Hong Kong because we offered diversified services and the company is managed by a centralized system, while beauty salons are trying to enhance themselves through medical study or employment of medical practitioners, or clinic chains setup by one or two doctors fighting to extend

H E A LT H C A R E

its medical service offerings – customer service is as important to us as medical safety.

“We’re not just any other consumer company you can buy products from and go. Our customers rely on our professionalism, they like our service and our brand, and we will be expanding our medical expertise to continue to stand out from other players.”

UMH sells treatment packages in advance, and it is the first in its sector to introduce the concept of a seven day cooling off period, whereby customers are eligible for a refund without explanation within seven days and there is no incentive for UMH staffs to attempt overselling or forcing customers to buy a particular package, because patients

“Our strength is to offer medical service embedded with customer service” – Ms. Karen Chui, Director of Corporate Finance

have an escape clause regardless, and that patients are comfortable and confident in their choice.

It is a testament to this confidence that 83 percent of UMH’s key clients had unfinished packages in 2015 purchased new packages in 2016, which is an important KPI for the company to achieve because approximately 70 percent of revenue comes from these key clients in 2016. The minority of clients come to UMH through external referees, and thanks to its reputation as a high-quality service, very little advertising is required.

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705

Another rule UMH bookings. Our consultants has implemented which also follow up with clients adds to the quality of to make sure they’re happy its service is to treat all with us, and if the medical staff equally in terms of condition escalates, a their medical knowledge; doctor will be contacted.

Annual even if theirs is extensive, We are to respond to revenue for UMH chooses to complaints in 48 hours, it the Union Medical assume they know is a gesture to show that Healthcare nothing so everybody we value and respect Group receives an equal two our clients. Most of our weeks of full-time customers are paying training spanning various modules. out of pocket, so they have high “We have to nurture them and ensure demands on the level of quality.” they know overselling isn’t what we Customers can even transfer to want,” Chui explains. “In terms of the another consultant or doctor if they are medical modules, our doctors take the unhappy with their service; according lead on training about medications, to Chui, customers trust the brand they side effects, injections, and there generally trust all of the staff: “Because is an annual emergency drill where we’re number one in the industry, we our staffs are trained on protocols in must do the best we can over time to case of emergency. We also enjoy retain that,” she says. “The Hong Kong the privileged to be trained by the government is issuing guidelines that pharmaceutical companies directly will allow them more control over the on medications and equipment.” use of medical aesthetic equipment “Unlike other service providers and of the doctors and delivery of where you get no personal service or services, but we have no issue we only can hardly book a place to enjoy the choose the best for our customers. services they paid for, we encouraged We welcome the type of management our clients to make advance treatment that means inappropriate service

Million HKD

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providers will be eliminated.”

A large element of the everimproving relationship between UMH and customers is the betterment of its technology, specifically the iPads it uses for the centralisation of information. “It was challenging to roll out the iPads five years ago,” says Chui. “Standalone clinics might not be so efficient in business and operations. A lot of people in the industry agreed with our vision and admire our system and wanted it too.”

While the change was easy enough for the behind-the-scenes technology experts, making it an integral part of the customer communication process and efficient management were trickier – but the advance in technology was necessary for UMH. “We believe systematic management is the key to a sustainable and scalable expansion. None of my senior management are doctors,” Chui explains, “However, we respect doctors and treat them as

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“Apart from the monetary interest, we provide an element to enhance themselves in their medical expertise, which they would then be able to deliver those new skills to the customers” – Ms. Karen Chui

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partners, and we do want to make a difference in terms of how the industry can grow to be even healthier – offering professional medical services embedded with customer service. “ UMH intends to expand further and with far more aggression. Chui says that it is the strategy for UMH to achieve 15 percent annual growth for the next 3-5 years with the increase in service floor area together with the consolidation of the fragmented market in Hong Kong. The dental business began in late 2013 and has proved hugely successful, so the next step is to introduce even more choice and versatility to the company’s services. The PRC business only commenced two years ago, and UMH is looking forward to play a key role

to this underdeveloped market in the near future. Of course, the business’s most important relationships is with its medical professionals, and we work hard to retain their loyalty; with no doctors, there are no patients.

“On top of basic training, our doctors receive additional training externally via our international medical counterparts, and this is part of the reasons we are able to retain them,” Chui concludes. “Apart from the monetary interest, we provide an element to enhance themselves in their medical expertise, which they would then be able to deliver those new skills to the customers.”

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Delivering patient-centered care across Asia Written by Catherine Rowell Produced by Mariana Lee

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We speak with Singapore Medical Group’s Chief Executive Officer (CEO) and Executive Director Dr Beng Teck Liang on the Group’s brand positioning, growth through innovation and acquisition strategies in the region’s private healthcare sector

“

The last few years have been exciting, to say the least,” says Dr Beng. Since acquiring Singapore Medical Group four years back, Dr Beng has become a driving force within Singapore and Southeast Asia’s healthcare sector. Since then, SMG has expanded fast, streamlined services and acquired new businesses. Not only has the company bounced back into black, it has also become one of the strongest performing healthcare stocks on the SGX (Singapore Exchange).

It is clear that Dr Beng has managed to produce such a positive outlook through two key factors – acquisition and innovation. Moving smart and steady through the fast-changing healthcare landscape, SMG has produced a portfolio that is diverse, and as a result, is now able to cater to ever-changing growing needs and demands. “The patient of today is knowledgeable and has high expectations”, adds Dr Beng. He explains that nearly 40 percent of SMG’s patients come from

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“It is not about jumping on the bandwagon anymore, it is about striving to be at the forefront of digital and connected healthcare developments” – Dr Beng Teck Liang, CEO and Executive Director

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SINGAPORE MEDICAL GROUP

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H E A LT H C A R E

overseas, with a high number of affluent patients from regional cities nearby, such as Jakarta (Indonesia) and Ho Chi Minh (Vietnam). SMG has managed to tap into the region’s growth potential that is unparalleled to any other region in the world.

With a population of 617 million and a healthcare spend of US$94 billion, ASEAN is expected to be the 4th largest economy by 2050.

As patients are growing in number and spending power, and with innovation pushing forward rapidly,

carefully orchestrated business models such as those of SMG, that focus on digitisation and connected healthcare, will benefit from a region that is transforming. “It is not about jumping on the bandwagon anymore, it is about striving to be at the forefront of digital and connected healthcare developments, and that is exactly what we do at SMG” states Dr Beng.

Along with the rise of digitisation worldwide, Dr Beng shifted his medical focus to the dot.com boom

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in the 90s. This developed his passion for medicine and how technology can provide key solutions and create enhanced, high-quality, patient-centred care.

He explains, “I am a firm believer in meaningful and innovative technology. Leveraging off my tech background with HP and GE, I’ve always been an advocate that there is an opportunity to implement more IT and automation within everything we do in healthcare”. This innovative approach is what resounds with current market needs. SMG is reflecting the rise of the new healthcare system, which is one that is digitised and connected.

Within his dual role, Dr Beng drives technological investment with an aim to expand the company’s operations into the Vietnamese and Korean private health sector. SMG has grown both organically and inorganically within all divisions, from Obstetrics and Gynecology, Oncology and Ophthalmology, besides the Group’s smaller niche specialist subgroups, such as its Dental services. These developments have enabled SMG to produce good financial results and resulted in a number of acquisitions in 2016 alone, creating a significant financial turnover for the Group.

The organisation’s acquisition of a diagnostic imaging service provider, alongside a radiology business, has helped the organisation grow and cultivate its existing services and contribute to the organisation’s bottom line. “We’ve made ourselves a specialist in buying and fixing broken businesses and turning them

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“A company is as strong as its employees that help deliver the businesses core services, and this has never been truer than for Singapore Medical Group”

have enabled referring physicians to gain instant access to diagnostic imaging, from various devices, including mobiles.

– Dr Beng Teck Liang, CEO and Executive Director With such a strong momentum and positive results, SMG has expanded services around,” he adds. Through these in an area which Dr Beng believes smart acquisitions, the organisation is prevalent within Singapore has gained the ability to develop its women’s health. The organisation’s own Electronic Medical Record (EMR) recent acquisition of Astra Women’s system, which embeds cloud-based Specialist Group has supported the technologies. These improvements Group’s move into Vietnam’s private

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H E A LT H C A R E

health sector and has made SMG the largest obstetrics and Gynecology Group, with the highest number of doctors practicing in clinics, in Singapore, something Dr Beng highlights with immense pride.

Whilst there are many successes to be proud of at SMG, Dr Beng remains humble, noting that “a company is as strong as its employees that help deliver the businesses core services, and this has never been truer than for Singapore Medical Group. To me, it’s

always down to the staff and I have a great group of people”.

SMG has shown that it is set to become one of the leading private healthcare providers in Asia.

2016 has been a record year and there are no signs of the organisation slowing down, as it continues to ride its wave of expansion and growth.

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