Building on new goals and big dreams
By NISHA RAMCHANDANI
AS a corporate leader, Lian Beng Group's executive chairman Ong Pang Aik is perceptive, far-sighted and persevering. So it's not surprising that he was named Ernst & Young (E&Y) Entrepreneur Of The Year - Construction.
Lian Beng Construction was started in 1973 by Mr Ong's father, Ong Sek Chong, as a sub-contractor that took on small-scale civil engineering and building projects. In 1978, at the tender age of 17, Mr Ong joined the business before going on to take over the reins of the company in the early 1980s.
Today, Lian Beng Group is an integrated engineering and construction support services provider.
'I simply saw it as my duty, being the son in the family, to help my father as much as possible so he could put food on the table,' Mr Ong recalls. He started helping out during the holidays. And once he had completed his National Service, joining the company was a 'natural progression'.
As a leader, Mr Ong is very hands on, making a point to personally visit sites and employees to ensure everything runs smoothly.
In 2000, when the construction industry went through an extended downturn, Mr Ong stopped bidding for new projects, Instead, he took on projects given up by companies that had run into financial trouble.
'As there was very little demand during that period, tender prices fell to an all-time low,' he says. 'It was hard to secure finance. I felt the returns were not worth the risk. Some risks had already been absorbed by the companies in trouble. So we also took the opportunity to buy over construction equipment and machinery at fire-sale prices.'
His perceptiveness was one of the main reasons Lian Beng emerged stronger from the downturn.
Criteria for the E&Y award include personal integrity, corporate financial performance and entrepreneurial spirit, which can present a possible conflict of interest at times.
'It can be difficult to juggle as people tend to place financial performance before everything else as the most obvious measure of success,' says Mr Ong. 'But I think that's putting the cart before the horse, and any success by that formula is likely to be short-lived.'
His long-term vision is obvious in the way he runs the business. For starters, he has focused his efforts in Singapore before looking elsewhere, before venturing into foreign territory.
For now he has set his sights on high-end residential developments, which he is pursuing through a wholly-owned unit called Millennium International. 'We also hope to enter the international market with this new subsidiary,' he says.
Millennium International's first contract was worth $99.5 million, as the main contractor for the Ritz-Carlton Residences at Cairnhill.
Other major contract wins by Lian Beng group include a $58.5 million contract to do piling and basement works at all three hotel towers at the Marina Bay Sands integrated resort.
Mr Ong could see years ago that the construction industry would hit a wall in terms of labour shortage. So he teamed up with two companies - one local and one Bangladeshi - to set up a vocational training school in Dhaka to ensure a steady stream of skilled workers. This move has even generated additional income for the group, as other market players tap the school for skilled employees.
Despite the slowing economy and gloomy outlook, Mr Ong is optimistic that the construction industry will turn around once things settle down.
'We will continue to keep our operations lean and work at improving staff productivity and morale,' he says. 'We will also look out for new opportunities that may arise out of this crisis and be nimble to capture them.'
Lian Beng Group reported net earnings of $11.9 million for the full year ended May 31, 2008 - more than three times the previous year's $3.5 million. This was on a 40 per cent increase in revenue to $194.8 million.
The order book is worth $736 million, and the group expects this to sustain its business through the next 24 months.
But Mr Ong is not one to rest on his laurels.
'I believe in setting new goals and dreaming bigger dreams to keep moving forward,' he says.
This article was first published in The Business Times on November 28, 2008.