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Soam was appointed managing director of the
construction giant last month.
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PETALING JAYA: IJM Corp Bhd is essentially managed by the key executives of
Road Builder (M) Holdings Bhd of yesteryear, which the former acquired in
2007.
Datuk Soam Heng Choon was appointed last month as managing director of the
construction giant that has transformed into a well-diversified group with its
pre-tax profit exceeding RM1bil.
The next person after Soam, who has five more years to go before he retires,
is Lee Chun Fai, who is the new deputy CEO and deputy managing director.
Former chief executive officer and managing director Datuk Teh Kean Ming said
the appointment of the two to the top positions showed that IJM practised
meritocracy.
“It does not matter where you come from… if you can assimilate into the IJM
culture and perform, you will be given the due recognition,” he said in an
interview recently.
Soam and Lee were previously from Road Builder prior to the acquisition. A
check on its website also revealed many of the Road Builder employees are
running divisions of IJM now.
When IJM announced in October 2006 the takeover of its nearest competitor,
Road Builder, lock stock and barrel for RM1.56bil, the general view then was
that the former wanted Road Builder for its order book.
According to reports, IJM had said the acquisition was more about manpower
and talent, which was dismissed by many sceptics. But now that has turned out to
be the case – eight years after the merger was completed in end 2007.
IJM is a product of a merger between three medium-sized local construction
companies – IGB Construction Sdn Bhd, Jurutama Sdn Bhd and Mudajaya Sdn Bhd in
1983,
The Employees Provident Fund is the single-largest shareholder in IJM with a
11.85% stake. IJM can count itself as the largest professionally-run company in
Malaysia with an impressive track record of rewarding shareholders and
employees.
It is a tradition that was started by its founders. The first managing
director was Koh Boon Chor followed by Goh Chye Keat. The current deputy
chairman Tan Sri Krishnan Tan was the third MD of IJM and Teh was the
fourth.
“Teh is last of the top management who had worked with the founders. Soam is the first to be holding the top post and who is not from IJM itself. But he has learnt the culture well. IJM rewards those who do well,” said an industry executive.
He citied the example of Tan who was the first non-engineer to be appointed MD of IJM because the founders were confident that he could perform.
IJM is known to run a tight ship, which is vital for a construction company to prevent leakages. There are several checks and balances to ensure that there is no one person authorised to sign off large cheques. All tendering of projects beyond RM1bil will have to go through the board that comprises people well-versed with project management.
“It has to pass muster with the board first who scrutinises all numbers,” said the official.
IJM adopts a system where all its jobs including internal ones are tendered out.
“At IJM, we believe that no department should be a parasite to another. There is no parasite culture here, even within the group, we tender for jobs on a competitive basis, based on market rates,” Teh said.
He explained that everything was based on market rates and that its construction arm cannot subsidise its property arm.
IJM’s phenomenal growth over the past three decades is the result of its unwavering focus on its core competencies, diversification into strategically related businesses and selective expansion into new markets.
It ventured into property development out of necessity during the recession in the mid-80s. There were fewer construction opportunities then but the Government provided land for companies to build mass low and medium cost houses under privatisation programmes.
IJM Land has some 4,900 acres of undeveloped landbank, with a gross development value of RM30bil.
IJM currently owns and operates several toll concessions in Malaysia, namely the Sungai Besi Highway,
New Pantai Expressway and Kajang-Seremban Expressway. It also has a port concession in Kuantan. The opportunity came about when Road Builder was up for sale in 2006.
IJM closed seven sen down to RM7.33 last Thursday giving the company a market capitalisation of RM13bil.
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