Article from: Malaysia Retailer | Vol 8 | No 4 | 2020 | Datuk Seri Johari Abdul Ghani
Armed with experience in business and politics, Datuk Seri Johari Abdul Ghani is an accomplished man with a rich perspective of industry and society. Tapping on his invaluable experience as former Minister of Finance II and a leading corporate figure, he expounds on current matters in society and the economy.
atuk Seri Johari Abdul D Ghani, Chairman of KUB Malaysia and C. I. Holdings Berhad, the largest shareholder of both companies, is a leading figure in Malaysia’s financial industry. An accountant by profession, Datuk Seri Johari is a Malaysian politician and was formerly Minister of Finance II from 2016 to 2018.
EDUCATION – A KEY CATALYST
Speaking about his humble beginnings, Datuk Seri Johari explains that education is key to his success in the business and political arena. “My parents are key influencers in my life. I came from a family that was economically challenged and my parents were not well-educated. Despite that, my mother and late father emphasised the importance of education in breaking the vicious cycle of poverty in the family,” he explains.
“It is not the assets or money left to me by my parents that has helped me but the education that they emphasised on that has been a major driver,” he stresses.
On his choice of accountancy as a profession, Datuk Seri Johari says, “Since my early school days, it has been my dream to be involved in the business world, where I don’t need to report to anyone. I noticed that a common characteristic of businessmen is that they have good financial literacy.”
He explains that accountancy gives one an edge in financial literacy and sets the path for good business acumen. “I believe that a good accountant is able to multi-task, make quick decisions and is a fast learner – common characteristics of a good business leader,” he adds.
E-COMMERCE COMPLEMENTS THE RETAIL BUSINESS
As an experienced businessman and corporate figure, Datuk Seri Johari shares his thoughts on e-commerce and its growing influence in today’s society. With the COVID-19 pandemic adversely affecting the retail sector in Malaysia and globally, Datuk Seri Johari says that e-commerce is a platform that complements and supports the brick and mortar retail concept.
“Regardless of what is said about the wonders of e-commerce, physical retail outlets will always be there,” he says. He reiterates that the only difference is that 20 to 30 years ago, retail outlets were the only option for customers, however, today consumers can enjoy the convenience of online stores.
He explains that one of the main advantages of e-commerce is convenience. “It has the ability to disrupt the normal retail ecosystem, however, for good e-commerce, you need a strong and efficient ecosystem which includes logistics partners, infrastructure and warehousing, among others. This calls for digital technology advancement,” he elaborates.
Datuk Seri Johari explains that e-commerce is borderless, however, retail shops have limitations in customer reach. With e-commerce, the million-dollar question is “which platform” can scale-up to cater to millions of customers.
On his thoughts of the poor footfall and sales performance of department stores in Malaysia and globally that has led to many closing down after having been in business for decades, Datuk Seri Johari says with urbanisation and the rapid pace of new township developments, more retail space has been made available, causing an influx.
With this phenomenon, there is a glut in retail space resulting in brand owners making demands on shopping malls, and duplicate stores becoming available across various malls, thus cannibalising
consumers. “The same number of consumers who frequent these stores are now split in numbers as the same stores are available across various malls,” he explains. Hence, retailers are then no longer able to obtain large numbers of consumers. “In retail, you need numbers, and without numbers, you do not have throughput,” he stresses.
His advice is for retailers to strategically plan their presence in the respective target markets and locations in order to capitalise on the right target market and consumer groups.
Datuk Seri Johari also advises malls to have their own specific identity, effective mall management strategy and a strategic combination of tenants mix that can cater to the needs of the predominant consumer groups in a particular area or locality. At the same time, he advises retailers to capitalise on e-commerce and bridge the gap between purchasing online and in retail outlets. “Retail shops and e-commerce have to complement each other and co-exist,” he stresses.
Brands Marked overseas by C. I. Holdings.
C. I. HOLDINGS IN THE PALM OIL INDUSTRY
As the largest shareholder in C.I. Holdings which is involved in manufacturing and packing of all types of edible oils, Datuk Seri Johari says that as a downstream player in the palm oil industry, his company is involved in exporting refined oil to 117 countries spanning Asia, Africa and the Middle East continents.
On the anti-palm oil rhetoric by the West, Datuk Seri Johari explains that 30 years ago, this rhetoric may have been relevant. Today however, countries producing palm oil are also concerned about the environment and are doing everything they can to be sustainable while continuing to supply the world.
“Today, the world produces 59 million metric tonnes of palm oil, of which 85% is produced by Malaysia and Indonesia. Citizens of these countries are also concerned about the environment, and hence these countries are now meeting and subscribing international standards such as RSPO, MSPO and ISPO standards,” he stresses.
He points out that the palm oil industry in the world currently employs 6 million workers under improved conditions, and provides sustenance for 2 to 3 million smallholders. “It not only the responsibility of palm oil industry players to comply with international standards. In fact, even the banking industry is now moving towards responsible financing,” he says.
While it is important to comply with these standards, Datuk Seri Johari also stresses the importance to preserve the palm oil industry so that people and society continue to benefit socioeconomically. At the end of the day, the palm oil industry has enabled many people to emerge from poverty, get a good education and pursue professional careers in the Malaysian and regional economies, he points out.
DIGITALISATION AND INDUSTRY 4.0 IN MALAYSIA
Touching on the dynamics of digitalisation and IR4.0 in Malaysia, Datuk Seri Johari explains that the country is on track, albeit not fast enough. He believes that in order to successfully embark on this, the government has to actively drive digitalisation and IR4.0.
This requires good and efficient infrastructure and the Internet of Things (IoT) spanning, artificial intelligence, cloud computing, robotics and augmented reality. “All this can only work with welldistributed infrastructure both in the urban, suburban and rural areas,” he adds.
Datuk Seri Johari says that despite SMEs driving the Malaysian economy, these industries are still labour-intensive. “Without foreign workers, many SMEs are handicapped because they rely heavily on foreign workers. As long as we continue to rely on foreign workers, Malaysia’s progress into IR4.0 will be at a slower pace,” he notes.
As an example, Datuk Seri Johari reminisces that about three decades ago, one could hardly see foreign workers in hotels. “Now you see a huge number of foreign workers in the hotel industry because locals are not willing to take up low-paying jobs,” he says. According to Datuk Seri Johari, hotel rates in Jakarta are priced much higher than those in Kuala Lumpur. “We have the lowest hotel rates in Kuala Lumpur now compared to Bangkok or Jakarta,” he notes.
He explains that in order for hotels to sustain, they have to hire foreign workers as wages are also kept very low. This has kept local.
About Datuk Seri Johari Abdul Ghani
Datuk Seri Johari Abdul Ghani was born and raised in Kampung Pandan in Kuala Lumpur, and received his secondary education in Sekolah Menengah Aminuddin Baki in Kuala Lumpur. He pursued his tertiary education at Institut Teknologi MARA (ITM) and obtained his Diploma in Accounting before furthering his accounting studies in the United Kingdom. He became a member of the Chartered Association of Certified Accountants in 1988 and was awarded Fellowship of the Chartered Association of Certified Accountants in 1993.
Datuk Seri Johari started his career at the international accounting firm Peat Marwick & Co. (now known as KPMG) as an auditor. Since then, he has held several senior positions in the corporate arena and has helmed renowned Malaysian corporations. He is no stranger to the fast moving consumer goods (FMCG) industry as he had substantial shareholding in KFC Holdings where he managed brands such as KFC, Pizzahut and Ayamas, turning it around into a company with a market capital of more than RM4 billion.
He also helmed Pemanis Sdn Bhd ((an exclusive bottler of PepsiCo products) as Group Managing Director from 2005 to 2011, managing 14 brands under PepsiCo. Datuk Seri Johari purchased the Pepsi franchise for RM72 million and sold the franchise in 2011 for RM820 million to Asahi, Japan, and won the best deal of the year award in 2011.
Datuk Seri Johari has held several senior positions as Group Managing Director and Chairman in various companies. He previously sat on the Malaysian Economic Council and he formally served on a number of Boards including, amongst others, as the Chairman of Langkawi Development Authority (LADA), Chairman of Urban Development Authority (UDA), Director of Khazanah Nasional Berhad, Trustee of Yayasan Pelaburan Bumiputera which manages funds under Permodalan Nasional Berhad (PNB) and Amanah Saham Berhad (ASN), member of the National Productivity & Export Council and member of the Advisory Council for Agriculture Development under the Ministry of Agriculture Malaysia.
He is also the founder and is currently the Chairman of Yayasan Bena Nusa, established to help reduce urban poverty and improve educational outcomes for children of the urban poor.
A man with an illustrious track record and a golf enthusiast, Datuk Seri Johari is a true-blue Malaysian who loves “nasi goreng kampung” an authentic Malaysian food fare that incorporates a host of flavours. workers away from such jobs as it is almost impossible to survive in the big city with such low wages although the working conditions are conducive in Malaysian hotels.
Datuk Seri Johari observed, “Hotel operators state that Malaysian workers are not interested in taking up these jobs. This is not necessarily true. If you noticed, nowadays, more Malaysian workers are commuting to Singapore to work in hotels there simply because they are paid better wages compared to locally.”
On addressing manpower needs, Datuk Seri Johari shares, “At C.I. Holdings, we have invested in automation and robotics in many areas of our business. We use sensors and artificial intelligence in our manufacturing processes. With automation in place, production volume can be doubled and tripled without having to increase manpower. I believe that investing in automation and digitalisation is an investment into the future,” he adds.
IN GOVERNMENT AND BUSINESS
Datuk Seri Johari spent 25 years in the business world before stepping into government. “In the government, I was able to gain a different perspective on business and administration of the country,” he explains. He says that the government is not driven by profit as in business. Instead, the main aim is to create political stability and economic progression.
“In business, people are not concerned about the rich or poor, but in running the government where growing the economy is a priority, there is a need to bridge the gap between the rich and the poor, where it’s important to create more high income earners to achieve a healthy socioeconomic condition,” he explains.
He elaborates that the government has limitations, and striking the balance between the needs of the rich and poor is often a difficult task. He reminds that, in government, there needs to be checks and balances, especially when the government is focused in growing the economy at a fast pace. “Temptations to bulldoze initiatives to achieve this, regardless of the cost, may well destroy the business ecosystem that we have painstakingly built. Absolute power without the necessary checks and balances can destroy everything.”
Nevertheless, he stresses that having had both perspectives, he wants to continue to embark on initiatives for the betterment of the country and people, especially in creating more employment opportunities. Datuk Seri Johari explains that C.I. Holdings is actively involved in corporate social responsibility (CSR) efforts and this gives him the opportunity to personally reach out to the community while leading his people in charitable work and giving back to society.
On 2 October 2020, Datuk Seri Johari Abdul Ghani accepted the Excellence Award for Corporate Governance (CG) Disclosure from the Minority Shareholder Watchdog Group (MSWG) under the MSWGASEAN Corporate Governance Awards 2019 for KUB Malaysia Berhad and the award for Long-term Value Creation for C.I. Holdings Berhad (CI Holdings). From a total of 866 public-listed companies assessed through the ASEAN CG Scorecard methodology, KUB Malaysia and CI Holdings were in the top 4% of the Corporate Governance Awards 2019. This award is testament to Datuk Seri Johari’s leadership in effective corporate governance in the businesses that he helms.
Source : RETAILER MALAYSIA MAGAZINE