Oil hits record highs above US$126

Tan Hong Ming

Oil Trades Near Record $123.93 on Signs of Stronger U.S. Demand

YB Lim Penang

Travels on economy class, see here, then here.

Oil struck a record high at $119.93 a barrel on Monday

Penang Bridge - The Star Online

Tuesday April 22, 2008 MYT 2:16:15 PM

PM: Many reasons for Penang bridge delay

KUALA LUMPUR: The nine-month delay in the Penang second bridge project is due to problems in land acquisition, design and rising cost, said Datuk Seri Abdullah Ahmad Badawi.

Oil hits $118 for the first time

Oil price above US$113 for first time

Piperack and Substation

We are starting work on some ancilliary works in the total construction of a blast furnace. Work starts today and is anticipated to be completed in four months.

Port Warehouses - Bremen Door Updates

We have received an order for a series of industrial foldaway doors for a port warehousing project in Malaysia.

We will be providing quotes regionally for such similar facilites to see if we can go regional from this base in Malaysia.

Stagflation

The Wall Street Journal Says

As rice prices hit new highs, farmers across Asia are hoarding their crops, raising the prospect of a shortage in Asia and Africa that could lead to widespread unrest.

Rice prices in Asia have doubled since the beginning of the year, driven higher by rising demand, a steady depletion of government stockpiles and a pest outbreak in Vietnam, the world's second-largest exporter after Thailand.

On Thursday, medium-grade rice exported from Thailand -- a de facto market benchmark -- reached $760 a metric ton, up from $360 a ton at the end of last year.

Business Conditions Survey

SIGNS OF MORE CHALLENGING TIMES AHEAD (MIER)
* BCI settles lower at 105.5 points, still above water
* Both sales and production volume down
* New domestic orders slightly better
* New export orders significantly lower
* Lower capital spending

Nokia Mobile Codes

Can you read this code?

Mobile Phone Projectors

Nestle

We are almost finished with the ERA project in Nestle. We are looking for work but price inflation in many items remain a big obstacle.

Steel Reinforcement Bars

It now costs almost RM3200 to procure a tonne of high tensile steel reinforcement bars. Apparently there is still escalations to come.

There is also a shortage of corrugated roofing material in the market right now with price increases also anticipated in the near future.

This year has been, so far, primarily about the 12th General Elections of Malaysia (otherwise now known as the Political Tsunami) and INFLATION.

Political Tsunami

Malaysia's 2008 12 General Elections on the 8th March 08 have had many unexpected results and have been aptly nick named a Political Tsunami.

Gamuda on The Edge Daily

28-02-2008: Lin: I was surprised by the reaction
by Jose Barrock & Siow Chen Ming Email us your feedback at fd@bizedge.com

Question and answer session with Gamuda’s managing director Datuk Lin Yun Ling.

Q: Did you expect this reaction?

Firstly, I was in Singapore attending a seminar on parenting. The impression created was that I was running away. I was a bit surprised at the strength of the reaction, but on hindsight I can see how it came about. I’m trying to share with you how I see it.

Even when we went for listing 16 years ago, I had a 16% stake and other directors had about 7% to 8%. And over the past 15 years I had made placements once every five or six years. In fact this is the fourth one. I remember after the last placement, (in April 2002), the price went down to RM6 (from RM6.85) but then eventually it went back up again.

Initially I thought there would be a reaction but it would get over and the share price would come right back again. But on hindsight, I see that the nervousness was in the signal that I was leaving. A lot of people were unhappy that I had not given prior notice. And where will Gamuda be without a successor? The concerns were well founded.

Q: Why the sale?

Even before the placement, all the other directors had 0.5 % to1% shares in the company. In fact, in the last 10 years we have not perceived ourselves to be shareholders with a controlling block. Even when my stake in the group was reduced, it did not stop our efforts to grow the group. If we have a job to do, we will want to do it well… we get not only job satisfaction, our self esteem, our satisfaction, we get a lot of gratification from it.

I don’t think of the impact on my stake. A lot of it has to do with passion. I don’t claim that I love every part of my job… (for instance) If I get a job in Vietnam which impacts the group, I get a sense of pride, satisfaction, regardless of the share price. When I go home, I think about it (the new job). I don’t even know how much the share price is. Its quite obvious that a group of our size, Gamuda will evolve very soon into a group run by a CEO and senior management who are non-shareholders.

Of course, you have many successful examples, but I’m not saying it’s the best. You also have many examples where the controlling shareholders manage the group. You look at CapitaLand, Southeast Asia’s largest developer. The company’s growth is more than 30% a year, but none of the top people have a stake in the company. Closer to home, like in IJM (Corp Bhd), (Datuk) Krishnan Tan doesn’t have a stake in the company. (Tan is the managing director of IJM Corp)

What I was saying is that I have done share placements over the last 16 years since listing. Every five-six years I did one placement, the last one was in 2002. Gamuda will evolve to be a group like CapitaLand. My responsibility is to see that in five years or slightly more from now, there will be a group of people that can replace the current group and there will be a CEO who will succeed me. There is succession planning. Of course as with any group, succession planning and senior management development is a very critical part of our work in the management. I spend a lot of time working... I make it a point to work with our top 30 people myself, not going through anyone so that I can size him up, know how far he can go and move him up as quickly as possible.

I think most people in the industry will acknowledge the strength and depth of our senior management. In our group, among the current second echelon who are in their early 40s or mid 40s, there are two or three people who do have the potential to take over. As you know this is not an overnight process. You hurry too fast, you might break him. So, we know how to challenge them and, in the mean time, enable them to grow.
But also you have to know that I am only in my early 50s. I think my colleagues and me (in the first echelon) can still contribute to the group. Don’t put us out so soon. I mean, someone suggested to me ‘a management lock up of five years’. That’s the easy part. If you put yourself in my shoes, and if you have brought up Gamuda to what it is now... are you going to leave it in a way that it then collapses immediately? It is more personal… it is a matter of pride, legacy and self esteem.

I am definitely not prepared to leave the company in such a situation. I never think that the sale is going to tilt the balance of power or anything. To start of with, I only had 5.23%. It’s not like I have 30% and when I do a placement it will tilt the balance of power and I lose control of the company. My people do not listen to my instruction because I had a 5% stake. It’s because they think I have a damn good idea.

Q: Why sell a big block now when the market generally thinks that there is a lot more going for Gamuda?

I think there is a lot of fear that we cannot achieve the guidance we have given. That definitely is not the case. There is never a right time for a CEO to sell. People will say, if the next two years are so good, why don’t you wait for these two years and then sell. But in two years from now, we can still be even better than now. So there really is never a good time.

Q: There are some concerns in the market on the viability of certain projects of the group, such as the double-tracking project where the cost of raw materials has gone up significantly and that has an impact on Gamuda. What is your comment?

In our guidance, whether it is good or bad news, we just put it all on the table. I know that people will say there are problems with the double-tracking project and that there is a problem with the bumi contractors. These are things that we have got ways of dealing with and we are very comfortable with the strategies that are in place. If there is anything, we would tell investors for sure.

Q: What is the reaction of Fidelity, Gamuda’s largest shareholder?

Actually, I am not supposed to share this. But as far as I know, they haven’t shown anything. This is the feedback I get from my people. But the filings take two weeks to come, so I wouldn’t know until the filings.

Q: Do you know who bought your block?

I do know but it (the placement) was done by Credit Suisse. They won’t tell me because these are the wishes of their clients.

Q: Is there a possibility for Gamuda to be taken over?

I am not saying that it is not possible. If it is substantially undervalued for a long time, then it will increase the possibility of that. But my own view is that it is not a very straight forward proposition.

If I put myself in the shoes of the acquirer, he will have to ask himself whether he can retain the senior people or not… not just myself but the top 20-30 of them. It’s a very people dependent business. Even like the Vietnam project I have ties with certain top-level people but I don’t know the mid-level people. Only my chief there will know how to handle them. If that guy goes, even I will have a problem. So, the acquirer will have to be able to retain the senior people. It is not a given that you can easily retain people. My people and I have been together for 20-over years. We grew up together, prospered together, went through thick and thin… so the bonds are there.

Q: In hindsight, would you have done the share disposal differently?

We should take the blame for the communication part. It created the impression that I am only there for the next 18 months and then I am going to leave… for that we have to take the blame.

Q: Can we safely say that you will be in Gamuda for the next five years?

Most of the time my word is good enough. I am not used to giving more than my words. But, anyway, the reasoning is there. I was joking with somebody just yesterday night, I can play golf and fly around the world but after two months I will come running back to the job because it is so boring. If you do it two weeks in a year it’s a lot of fun. But if do it too long, your adrenaline doesn’t flow, then you will come running back.