Yoma sees prom­ise in JCB part­ner­ship

In­ter­view with Melvyn Pun, Group CEO at Yoma Strate­gic Hold­ings Lim­ited

Mizzima Business Weekly - - CONTENTS - Aung Thura

Myan­mar’s prom­i­nent Yoma Strate­gic Hold­ings Lim­ited, rooted in real es­tate, con­sumer busi­ness and au­to­mo­tives and equip­ment, re­cently stepped up to en­gage with a busi­ness sell­ing con­struc­tion equip­ment of the UK-based and world-class brand JCB. Yoma’s wholly-owned sub­sidiary, Con­ve­nience Pros­per­ity Com­pany Lim­ited-CPCL is now the ex­clu­sive dis­trib­u­tor for JCB con­struc­tion equip­ment in Myan­mar. Group CEO Melvyn Pun firmly be­lieves that the Yoma JCB dis­tri­bu­tion busi­ness will be­come an­other main pil­lar of the mother com­pany in the com­ing years. In this ex­clu­sive in­ter­view with Mizzima’s chief busi­ness re­porter Aung Thura, Melvyn Pun of­fers in­sight into the Yoma JCB busi­ness plan.

Mizzima: Can you tell us Yoma JCB’s over­all plan in Myan­mar?

Melvyn Pun: We have been in dis­cus­sion with JCB for quite a while to see if we could work to­gether in Myanamr. We are glad to be able to rep­re­sent a leading con­struc­tion equip­ment brand like JCB in Myan­mar. The coun­try needs to de­velop its in­fra­struc­ture; not just con­struc­tion of build­ings, apart­ments, hous­ing or con­do­min­ims but also the build­ing of power plants, and all the in­fra­struc­tures needed for rail­ways and air­ports. To build qual­ity in­fra­struc­ture, you need qual­ity equip­ment, and this is where the in­ter­na­tional qual­ity of JBC can play a part.

Could you tell us about how the part­ner­ship came about be­tween Yoma’s CPCL and JCB?

Five years ago, Yoma Strate­gic took on a re­search to re­view Myan­mar’s en­tire au­to­mo­tive and heavy equip­ment sec­tors. We looked at each cat­e­gory: pas­sen­ger cars, com­mer­cial ve­hi­cles, agri­cul­ture equip­ment as well as con­struc­tion equip­ment. At that time, it was ob­vi­ous

that there was a lot of op­por­tu­nity in the con­struc­tion equip­ment space. How­ever, we felt quite strongly that we were not ready to be in that sec­tor as yet be­cause we did not have the right team in place. Dur­ing that time, we had the op­por­tu­nity to meet with the JCB team and learned about their prod­ucts then. How­ever, my team rec­og­nized it was not the right op­por­tu­nity to work to­gether yet. An­other op­por­tu­nity came along last year when JCB ap­proached us again to dis­cuss ways to work to­gether. This time, we felt we were ready. This is be­cause over the past seven years, we were able to build a very good net­work in Myan­mar through our agri­cul­ture equip­ment busi­ness. Through our wholly-ownded sub­sidiary busi­ness, Con­ve­nience Pros­per­ity Com­pany Lim­ited ”CPCL”), we were dis­tribut­ing New Hol­land trac­tors and we be­came very suc­cess­ful, both in terms of cov­er­ing a large part of the coun­try as well as pro­vid­ing very good ser­vices to our cus­tomers. This helped us build a strong mar­ket net­work. Of course, agri­cul­ture is very dif­fer­ent from con­struc­tion but our ap­proach is sim­i­lar – we are work­ing with JCB and New Hol­land lever­age the same branch net­work that we will have through­out the coun­try and hope­fully that gives us a very ef­fi­cient way to in­tro­duce JCB prod­ucts to the mar­ket.

How did you pre­pare for this part­ner­ship?

A lot of work went to the prepa­ra­tion. First of all, we had to un­der­stand and thor­oughly re­search the mar­ket. Each coun­try has dif­fer­ent re­quire­ments but, par­tic­u­larly for Myan­mar, the re­quire­ments are quite new. There are a lot of dif­fer­ent types of projects and we need to un­der­stand what equip­ment is suit­able for Myan­mar and what are the chal­lenges. Myan­mar needs a lot of con­struc­tion and ac­tu­ally Myan­mar needs very ver­sa­tile equip­ment that are able to do dif­fer­ent types of con­struc­tion jobs. It is not ef­fi­cient to have one type of equip­ment that is ded­i­cated just for build­ing roads, or for con­struc­tion of build­ings. Ide­ally, you want to build equip­ment that you can main­tain eas­ily but it can do many things at the same time. Luck­ily, JCB of­fers us this op­tion.

How do you view the ben­e­fits from the JCB net­work?

JCB is a very prom­i­nent brand be­cause it is one of the most pres­ti­gious brands in the U.K., with a very strong Bri­tish her­itage. At the same time, JCB is also very suc­cess­ful in In­dia where it has a dom­i­nant po­si­tion in the ru­ral mar­ket. This shows us they are able to de­sign their prod­ucts that are not only high qual­ity, but at the same time, it has cost-ef­fi­ciency that al­lows JBC prod­ucts to be very strong in In­dia. We are also lucky be­cause we are strate­gi­cally close to In­dia, which means we can uti­lize the very large plant in In­dia to man­u­fac­ture JCB ma­chines at a very ef­fi­cient cost. So we can get the prod­ucts, the fa­cil­i­ties, the prices.

The other thing which is equally im­por­tant is the part­ner­ship. JCB has re­ally im­pressed us in terms of their ap­proach to the part­ner­ship with us but also with the cus­tomers. They fully un­der­stand us. And the busi­ness is not about sell­ing one unit to one cus­tomer and hop­ing that we find an­other cus­tomer some other time. The ap­proach is to help busi­ness own­ers and in­di­vid­u­als grow their busi­nesses. One per­son may be look­ing to build roads, one per­son may be look­ing to build build­ings but maybe oth­ers need, for ex­am­ple, to build a power plant.

cus­tomer is very dif­fer­ent and our ap­proach is to work with our cus­tomers to pro­vide them with a to­tal so­lu­tion which in­cludes de­sign­ing a process in terms of sup­port ser­vices and sup­port­ing the busi­ness. That is very im­por­tant.

Do you have leas­ing and hire-pur­chase op­tions?

We will be pro­vid­ing a whole range of so­lu­tions, we will also be sell­ing in­di­vid­ual units . as well as work banks such as Yoma Bank to pro­vide hire-pur­chase fi­nanc­ing ar­range­ments. At the same time, we will pro­vide leas­ing op­tions. We are look­ing at a range of dif­fer­ent ways to pro­vide so­lu­tions to each client’s need. It will be an on­go­ing di­a­logue. So peo­ple can phone up to ask ques­tions or to pro­vide sup­port. We will also have so­cial me­dia such as Face­book to com­mu­ni­cate and help our clients.

Can you tell us the spe­cific strate­gies?

First of all, we want to pro­vide a to­tal ser­vice. The key is our abil­ity to lis­ten to the cus­tomers and pro­vide equip­ment so­lu­tions for their busi­ness. Af­ter-sale ser­vice is also very im­por­tant, and will not dis­ap­pear af­ter sell­ing the prod­ucts (units). Of equal im­por­tance is the af­ford­abil­ity of the prod­ucts as well as to pro­vide fi­nanc­ing when there is a need.

We will pro­vide leas­ing op­tions as well as work with banks to pro­vide fi­nanc­ing op­tions. We un­der­stand that some­times these equip­ment are quite ex­pen­sive, but it does help the busi­nesses to be more ef­fi­cient, and al­low busi­nesses to ac­com­plish projects. We will work with clients to find so­lu­tions that en­ables the link­ing of pay­ment pe­ri­ods to the busi­ness. On the cus­tomer ser­vice front, Yoma JCB has an ad­vanced telem­at­ics tech­nol­ogy in Myan­mar, called LiveLink, to con­trol and track their con­struc­tion equip­ment ma­chines 24/7.

How do you view the po­ten­tial for con­struc­tion in Myan­mar?

I have no doubt that there will be a lot of projects com­ing up both from lo­cal in­vestors as well as in­ter­na­tional in­vestors. Ac­cord­ing to my day-to-day dis­cus­sions with busi­ness part­ners as well as prospec­tive new part­ners, we know that there are many in­vestors who are very in­ter­ested to make long- term in­vest­ments in Myan­mar, whether it’s rail­ways, build­ings or the up­grad­ing of ex­ist­ing in­fra­struc­ture.We would look at how much the tele­com-in­fra­struc­ture think you will have a sim­i­lar level of growth in all the oth­ers in­fra­struc­ture bases. I think that is very pos­i­tive and the new MIC (Myan­mar In­vest­ment Com­mis­sion) and the law has come out, the pro­ce­dures are com­ing out. These all are aimed to re­duce bu­reau­cracy and re­ally tar­get in­vestors to make in­vest­ments in an eas­ier way. You may say that things are have not re­ally changed yet. My per­sonal opin­ion is we are very much in the right di­rec­tion. I have al­ready seen some of those changes that will lead to in­vest­ments in the very near term.

What are you look­ing to in­vest in Yoma JCB?

For the Yoma JCB busi­ness, our aim is ini­tially to lever­age our ex­ist­ing branch net­work to grow mar­ket share. So the ini­tial cap­i­tal re­quire­ment is not very high as we are us­ing ex­ist­ing branches. We will have 14 branches by the end of this year and are look­ing to use these branches to sell JCB equip­ments. Most of the in­vest­ments will be work­ing cap­i­tal to en­sure we have the in­ven­tory in place and to also train our new staff. There will be a lot of train­ing and we will also pro­vide train­ing to our cus­tomers so that they can use the equip­ment ef­fi­ciently. Ini­tially, it will not be a very large in­vest­ment amount. Over the com­ing years, we will slowly in­crease, and we an­tic­i­pate the in­vest­ment to be around US$5 mil­lion over the next few years.

What about job op­por­tu­ni­ties with Yoma JCB?

Over the next three to five years, I think the whole or­ga­ni­za­tion will have more than one hun­dred staff. It will not be just a mat­ter of our own staff; our cus­tomers and part­ners will also cre­ate jobs as well. So you will see a lot of our cus­tomers pro­vide train­ing and pro­vid­ing sup­port to see how they can work more ef­fi­ciently.

How is the gov­ern­ment helping con­struc­tion?

Of course, the gov­ern­ment has a lot of projects that they need to look at. I don’t think there is a need for the gov­ern­ment to help the con­struc­tion in­dus­try, other than to pro­vide a con­du­sive plat­form for in­vest­ments to come in and be chan­neled to spe­cific in­fra­struc­ture ar­eas where we see the most needs.

What are the chal­lenges in build­ing in­fra­struc­ture in Myan­mar?

There are many, many projects. Of course, every com­pany needs to find its own way to op­er­ate ef­fi­ciently. our Yoma Cen­tral project, and have spo­ken to many in­ter­na­tional con­trac­tors. Many of them are al­ready in Myan­mar with on­go­ing con­struc­tion work. Our main con­struc­tion part­ners will be in­ter­na­tional com­pa­nies as well. So you will see them com­ing in.

Yoma and FMI are fo­cused on three main pil­lars: health­care, real es­tate and the fi­nan­cial sec­tor. How does Yoma JCB now fit in with Yoma’s over­all plan for Myan­mar?

The three pil­lars you out­lined are the three pil­lars for First Myan­mar In­vest­ment, which is an af­fil­i­ate com­pany of Yoma Strate­gic Hold­ings Com­pany Lim­ited, and these are the ar­eas that they will con­tinue to fo­cus on. The three pil­lars for Yoma Strate­gic Hold­ings are real es­tate, con­sumer as well as the au­toma­tion and heavy equip­ment sec­tor. Yoma JCB, is part of the heavy equip­ment busi­ness and this busi­ness is grow­ing very fast. The heavy equip­ment and au­to­mo­tive busi­ness in­clude pas­sen­ger ve­hi­cles, com­mer­cial ve­hi­cles like trucks; it will also in­clude agri­cul­tural equip­ment such as New Hol­land trac­tors as well as the JCB busi­ness. These are the prod­ucts that we mainly sell and then on top of that we will do leas­ing. In time, Yoma’s three pil­lars be­tween real es­tate, the au­to­mo­tive and heavy equip­ment and the con­sumer busi­ness should be around the same sizes as each other. So, each of them will have its own role to play.

Is there any­thing you would like to add?

Heavy equip­ments have very flex­i­ble use. I mean you will see the same equip­ment that you can have on the road, digging the soil up, and same equip­ment can be de­ployed flood ar­eas, and you can see the same equip­ment in a lo­gis­tic cen­tre mov­ing goods from var­i­ous places. So these are very ver­sa­tile pieces of equip­ment that have many dif­fer­ent uses.This is very ex­cit­ing. If you look at the fastest grow­ing busi­ness that we have now, it is the New Hol­land trac­tor busi­ness. And I firmly be­lieve JCB will be­come an­other main pil­lar for us for the com­ing year. The most im­por­tant thing for us is to en­sure that we in­tro­duce the prod­ucts in the right way, re­ally ed­u­cate our cus­tomers on what is the best use for our prod­ucts whether it’s for a lo­gis­tics com­pany or a con­struc­tion com­pany. We would like them to think of the brand JCB when they need to buy a heavy equip­ment ma­chine.

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