Brothers adapting to changes while continuing late father’s legacy

DRIVEN by the need to defend their father’s legacy, the three brothers of the Naza Group have forged a bond tighter than ever to steer the group into the next stage.

The three of them, who head the multi-billion group, work on the same floor and drill down to even the smallest of details on business matters, as they instil professionalism into the group that is owned by the family of the late Tan Sri SM Nasimuddin SM Amin.

Known primarily for its prowess in the automotive sector and property development, the group is now moving into construction and engineering, the provision of telecommunications services as well as food and agriculture.

SM Nasarudin SM Nasimuddin says they are well aware that they are there because of their late dad’s achievements.

The late Nasimuddin began the Naza Group’s automotive business in 1975. At just 21, he utilised his savings, which was earned from helping his father’s construction business, and began importing used Japanese cars.

After selling off his entire stock within three months, Nasimuddin began a dealership for used luxury vehicles in Kuala Lumpur. He later succeeded in applying and receiving his own approved permits to import used luxury vehicles.

In 1996, South Korea’s Kia Motors Corp appointed Naza as the franchise holder for the brand in Malaysia.

The assembly of completely-knocked-down packs for Kia started in 2001, and by 2003, Naza Automotive Manufacturing Sdn Bhd (NAM) was established. The construction of the manufacturing plant was completed in Gurun, Kedah, in 2004.

The factory has built 200,000 cars to-date and Naza is ranked in the top-three among Kia distributors in Asean.

Nasimuddin also began the group’s partnership with French carmaker, Automobiles Peugeot, in 2006 and obtained the franchise for the marque in 2008. Naza is the largest Peugeot distributor in Asean.

Today, the Naza group owns distributorships and dealerships for nine car brands – Kia, Peugeot, Brabus, Koenigsegg, Maserati, Citroen, Chevrolet, Mercedes-Benz and Ferrari. It is also a distributor of motorbikes such as Aprilia, Ducati and Piaggio.

Although it has been nine years since his passing, the late Nasimuddin is still remembered today as a visionary who created an automotive conglomerate in Malaysia.

On a more serious note, Nasarudin acknowledges that their father built a strong foundation. This legacy is still very much present in corporate Malaysia today.

“What we are doing now is to instil professionalism into Naza. When dad passed away, he actually had 100 active companies with no holding companies! What we did was to put the proper structure, diligence and auditors into the companies,” says Nasarudin.

“We are continuing dad’s legacy, which is to grow his businesses. He taught us to have humility, to stay focused and be disciplined always. However, on our part, we are adapting and changing the way business is being done. If there are good opportunities in new businesses, then we want to take advantage of them,” he says.

SM Faliq SM Nasimuddin adds by saying that the Naza Group today has some 3,000 staff, and staying efficient is one of its main priorities.

“If we become too big, then we move like an elephant. Our motto is to have low cost, high impact and execute fast,” he says resolutely.

Datuk Wira SM Faisal SM Nasimuddin says that as they want to attract skilled and talented people into their organisation, they have to set an example of their own.

“Young people today are willing to learn. They are looking for role models to guide them. We feel that we need to attract young people. We have to do that via our own conduct,” he says.

Thus, in a matter of less than 10 years, the Naza brothers have established new core businesses, not just to explore new opportunities but also to ensure that the group’s profitability remains sustainable.

New businesses

One such new core, which has gained traction over a short period of time, is its engineering and construction arm. In 2010, the Naza Group set up Naza Engineering & Construction Sdn Bhd (Naza EC), initially to complement its property arm, Naza TTDI Sdn Bhd.

Today, Naza EC has all the necessary licences and offers complete construction solutions, specialising in civil engineering and infrastructure works. Naza EC is registered with the Construction Industry Development Board as a Grade 7 construction company.

It has some RM1.1bil to RM1.2bil worth of external work in its order book. It is building a road in Pengerang, Johor, a bridge along with elevated roadworks in Bagan Datoh, Perak, and a bridge for the Tun Razak Exchange.

Meanwhile, Naza Communications Sdn Bhd was formed in 2014 and is involved in the business of integrated telecommunications infrastructure services.

The company is licensed under the Communications and Multimedia Act 1998 to own and be a Network Facilities Provider and Network Service Provider. It is also a registered entity under the Finance Ministry.

The company is currently providing engineering designs and solutions to top telcos such as Maxis Bhd, Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd and U-Mobile Sdn Bhd.

In a short period of time too, the company has erected some 300 telco towers, predominantly in Perak and Kedah. The aim is to construct a total of 1,000 towers over the next five years. So far, Naza Communications has invested some RM20mil to build the 300 towers along with the fibre installation. “As entrepreneurs, whenever there is a problem, we see a solution. In the case of this tower business, the problem is that there is not one government body which has a blueprint for the telcos in the states. So, we studied the business of telco infrastructure and gave a proposal. I know it’s seen as a difficult business because there are 100 licences out there, and it’s a piranha-infested industry,” says Nasarudin.

“Our value is that we have a rela- tionship with the state. In Perak, for example, we have two state partners. Today, we have many partners in Perak and Kedah,” he says.

He says that tower infrastructure is a good business, as it is almost like a concession.

“I think we have a niche because we have a relationship with the councils and are quite efficient in getting the approvals, acquiring locations and getting the entire process moving,” he says.

However, the business needs a fair bit of capital upfront. For the first 300 towers, the group forked out RM20mil of its own money.

“We are now talking to some investors who might be interested to join forces with us for this business. For all the businesses that we enter, we have a three to five-year clear roadmap, or else why would a shareholder or investor be interested?” says Faliq.

Recently, Naza Group participated in a Malaysian Communications and Multimedia Commission tender and won the package for the deployment and maintenance of tower sharing worth RM140mil.

On its third venture, the Naza Group has ventured more seriously into the food and agriculture business. Prior to this, it already had Wood Vision Sdn Bhd, which was mainly the plantation arm that was formed in 1995.

The company has over 20 years of experience in running, managing and maintaining oil palm plantations.

It has around 4,000ha of oil palm land, with plans to expand it to 30,000ha over the next five years. The company’s land acquisition exercise will be used to increase its oil palm crops and will also be integrated with livestock such as cattle and goat breeding, as well as bird’s nest farming.

Naza’s strategy for agriculture is hinged on food security.

“World population is getting bigger and food prices are getting higher. Food scarcity is very real. Presently, a lot of food is being re-exported to China and Dubai at a massive mark-up price. So, we are also exploring biotech to bring down the cost of food for the people,” explains Faisal.

He says that it is also looking at addressing seeding, contract farming and bringing more agropreneurs to its platform.

Faisal says that Naza is now one of Malaysia’s appointed parties for the export of pineapples and rock melon.

“Yes, we have started exporting our pineapples. It’s still small, but we see opportunity and potential in this area,” he says.

So, would the listing of any one of its businesses be a possibility?

Yes. Part of the family roadmap is to eventually extract value from its businesses, although it all depends on pricing.

“We are very open, but only when the time and pricing is right. So, for now, we may keep it private for a while. Nonetheless, as said before, all the businesses that we go into, there is already a three to fiveyear roadmap on how to grow it. We know that ultimately, the shareholders want to monetise some value,” says Faliq.

Faisal adds that the extraction of value could be in the form of the listing of one of the individual business divisions, or via the entry of a private equity investor.

“The family is very open as long as the business can be taken to the next level,” he concludes.