A healthy approach to challenges

Dr Goh believes that once you realise learning never stops, and you need to move out of familiar surroundings to develop new skills, change should not be so frightening.
Dr Goh believes that once you realise learning never stops, and you need to move out of familiar surroundings to develop new skills, change should not be so frightening.PHOTO: SGX

Goh Jin Hian on the midlife crisis that led to his entering a new field - and thriving

Five years ago, Dr Goh Jin Hian took a vault into the unknown.

In March 2011, when global economies were reeling from the aftermath of the euro zone crisis, the general practitioner left a 14-year career in the healthcare industry to start oil and gas trading firm International Energy Group (IEG).

This journey eventually culminated in his appointment last July as the chief executive officer of Singapore Exchange-listed investment holding company, New Silkroutes Group (NSG).

"At that time, Europe was still in the throes of a crisis, and when I said I wanted to do something different, headhunters told me I was crazy, and that only one-third of people who change jobs at a time like this would succeed. Even my own parents thought I was nuts," Dr Goh recalled with a laugh.

The 48-year-old is the son of former prime minister and current Emeritus Senior Minister Goh Chok Tong. He held several executive senior positions in Parkway Holdings - now known as IHH Healthcare - between 1999 and 2011, including CEO of Gleneagles Hospital, president of Singapore operations, as well as senior vice-president of growth, innovation & strategy.

QUANTUM LEAP

I was 43 in 2011. I had to decide whether to stay on - and if so, be a one-organisation person until the day I retire - or do something different.

DR GOH JIN HIAN, who left a 14-year career in Singapore's healthcare industry to start oil and gas trading firm International Energy Group.

The Bachelor of Medicine and Bachelor of Surgery graduate from the National University of Singapore described his decision to exit a familiar environment as "a kind of midlife crisis".

"I was 43 in 2011. I had to decide whether to stay on - and if so, be a one-organisation person until the day I retire - or do something different," said Dr Goh, who also has a Master of Business Administration from the University of Hull, and completed the Wharton Advanced Management Programme in 2005.

A compelling challenge

The transition was tougher than expected. "Entering the oil and gas industry was not as easy as it looked," Dr Goh said. The opportunity for him to join NSG emerged three years later, in early 2014.

"My entry into the group was not something I actively sought - it came about when the company was still operating under the name of Digiland," he recalled. "Through a mutual friend, I met the chairman, Mr Cai Sui Xin. He was eager to take the company out of the SGX Watchlist and turn the business around. We believed it was a challenge we could tackle."

Established in 1994 as a wholesaler of computer peripherals and hardware, Digiland International was placed on the SGX Watchlist in December 2011 after reporting several consecutive years of losses.

By the time Dr Goh stepped in, Digiland had already obtained a permit to trade marine oil. That eventually paved the way for IEG to be incorporated into the restructured Digiland group.

The reorganised entity, which exited the SGX Watchlist in November 2014, was renamed New Silkroutes Group last July.

"We wanted a corporate identity that better reflected our ambitions - trade on the ancient Silk Road was a significant factor in the development of the civilisations of China, the Indian sub-continent, Persia, Europe and Arabia," he said.

"The name also captures the essence of the exchange of ideas, cultures, philosophies and technologies."

For better or worse

The road ahead, however, remained bumpy. Crude prices began tumbling in mid-2014, but management stuck to its guns. Several developments worked in their favour. As crude prices sank and trading companies shuttered, teams that were nearly impossible to hire became available for more modest and reasonable terms.

Again, lower crude prices were a boon. "With oil prices plunging by more than half, small credit lines that would not have been very meaningful six months ago suddenly became something we could work with," he said.

Oil prices plummeted from a peak of more than US$100 a barrel in July 2014 to end last year at around US$37 a barrel. The group focused only on profitable oil trades. "We structured our trades with friendly counterparties to ensure specific margins were locked in."

Through IEG, the group's fortunes began to recover. The wholly owned unit is on track to post revenues of more than US$225 million (S$313 million) for its financial year ending June 30, 2017 - marking the group's highest revenue in more than a decade. Under the Digiland brand, the company last chalked up revenues exceeding US$200 million 12 years ago, in FY2004.

In a move that boosts the group's outlook, IEG set up a joint venture with Malta's government last May to develop the European island into an energy trading hub for both continents. IEG also expects to eventually own and manage oil storage facilities in Asia and Europe.

Lofty ambitions

As the group's expansion strategies began to take shape, funding needs also escalated.

As a result, New Silkroutes Capital was born.

Set up this year, the Singapore- based subsidiary offers investment management and advisory services to institutions, enterprises and high net worth individuals. It has a joint venture in New York that will launch funds for the energy and resource, healthcare, technology and real estate asset classes, as well as develop structured products. The group's asset management joint venture is also applying for the Capital Markets Services licence from the Monetary Authority of Singapore, which will allow it to offer private equity funds in the region.

Last month, New Silkroutes Group marked its entry into healthcare - a sector close to Dr Goh's heart - by acquiring a 51 per cent stake in Singapore-based Healthsciences International (HSI). A healthcare practice group with expertise in designing, developing and running hospitals, HSI also operates three clinics in Singapore.

The group will continue to seek acquisitions of suitable healthcare services companies - ranging from hospitals and pharmacies to imaging centres and laboratories - in the Asia-Pacific region, he said.

As for the restructured Digiland business, now the group's infocomm technology division, it will focus on big-data analytics, facilities management, and cloud-based services for e-government projects, Dr Goh said.

It will also help regional governments develop public housing schemes, advising them on policies, using the success of the Housing Board programmes as a model.

Management hopes to mould NSG into an investment holding company with businesses in investment management, energy and resources, technology as well as healthcare. This multi-pronged approach aims to turn the group into "a leadership stock" on the SGX, Dr Goh said.

As part of its transformation, the group carried out an exercise in August last year to consolidate every 500 ordinary shares into one single share to reduce sharp swings in its stock price and comply with SGX's minimum trading price rule. Completed in December, the exercise is the largest of its kind in Singapore's corporate history.

Proof is in the pudding

With NSG issuing more announcements over the past 12 months than in the past 12 years, and changing management five times over that period, shareholder confusion has prevailed.

But the proof has been in the pudding. The group's market capitalisation, which plummeted by more than 60 per cent to around S$50 million in FY2011, has since more than doubled to nearly S$120 million today. For the year-to-date, the stock is the best-performing constituent of the SGX Mineral Oil & Gas Index, with a total return of 109 per cent. "As an investment holding company, we are strategically diversified, and this diversity is not random - there's actually a method to the madness," he said.

NSG currently derives more than 90 per cent of its revenues from IEG because the average size of an oil trade is large, Dr Goh said. But the energy division does not command more than 60 per cent of group profits.

"While IEG will still account for a significant number, you will see increasing contributions from healthcare, asset management and the systems division."

Adapt or perish

"As with many growth companies, there's a need to deepen the management bench. We've been very lean over the last 20 months, without much capital to spare for hiring new talent. Now that we do, our growth should be more exponential going forward," Dr Goh said.

Looking back on the past 20 months, where change has been the only constant, Dr Goh highlighted the importance of being adaptable. "Change is inevitable, and everyone should embrace it. You need to be willing to take risks and step out of your comfort zone."

Lifelong learning is another principle close to his heart. "Once you realise learning never stops, and you need to move out of familiar surroundings to develop new skills, change should not be so frightening."

The father of three girls aged 12, 14 and 16 constantly reminds his children to develop a thirst for knowledge. It's also important to develop a clear moral code, he said. "Your word must be your bond, and you should always do things that are consistent with your ethics."

•This is an edited excerpt from Singapore Exchange's Kopi-C: The Company Brew column that features C-level executives of firms listed on SGX. A longer version can be found on SGX's My Gateway website: www.sgx.com/mygateway

A version of this article appeared in the print edition of The Straits Times on October 31, 2016, with the headline 'A healthy approach to challenges'. Print Edition | Subscribe