Growth strategies to tackle change and thrive

In a global environment marked with uncertainties, CEOs from YCH Group, Singapore Exchange and Olam International tell Wong Siew Ying they are diversifying their business, building up their capabilities and adapting to change in order to drive growth.

(From left) YCH Group executive chairman Robert Yap, SGX chief Loh Boon Chye, and Olam CEO Sunny Verghese.
(From left) YCH Group executive chairman Robert Yap, SGX chief Loh Boon Chye, and Olam CEO Sunny Verghese.PHOTOS: YCH GROUP, SGX & OLAM INTERNATIONAL


Key lessons in 2016: "The obvious one is that politics is very unpredictable as seen in Donald Trump's presidential election win. On the whole, I think there will continue to be uncertainty, but it's not all bad.

There are some bright sparks. I think Chinese President Xi Jinping should be consistent with his economic policies.

The One Belt, One Road initiative will provide a lot of opportunities for companies, including ourselves as we are plugged into the regional and global markets. China accounts for about onethird of our business and its economy is still growing at 6 to 7 per cent. Slower growth, but not no growth."

Top business priorities in 2017: "An area we want to focus on is helping Singapore retailers strengthen their online-to-offline strategy through our e-commerce fulfilment business. We are exploring solutions with the Singapore Tourism Board to enhance the shopping experience, for example, by offering services to ship purchases to anywhere the customers want - be it to their home, to the hotel or the airport.

Urban logistics is another area. It looks at how to create a more efficient flow for products within the city by consolidating and tracking the delivery of goods. It helps to ease congestion around the stores and the use of 'green trucks' will reduce pollution too. We can draw experience from our city supply-chain super hub in China."

Opportunities and challenges this year: "We believe logistics and supply-chain management can be a key growth engine for Singapore. We are in Asean, right in the centre between China and India - two growth engines in the world. There will be movement in cargo, and consumption will rise. In all, you are looking at about three billion in population. That consumption engine is huge.

Even though Singapore is a small country, we are at the centre of all that. Being ahead of the curve in terms of technology and capabilities, I think we are in a good position to tap that three-billion-population market. There's a lot of work to do."


Key lessons in 2016: "The way global markets have reacted to events such as Brexit and the US presidential election serves to remind us of the close relationship between geopolitics and the world economy. In a year of 'black swans', one can no longer dismiss the likelihood of low-probability scenarios.

Across Europe, the US and even parts of Asia, we have started to witness the rise of populism, along with policies that may not always be in the best interests of the economy. These events show how crucial it is to have responsible governance and forward-looking leadership.

For the SGX, with market volatility becoming the norm, it is important that we continue to diversify our business."

Top business priorities in 2017: "We will expand the scope of our securities market to transcend local limitations, attract more regional and international companies to raise capital on the SGX, while remaining committed to supporting local corporates and small and medium-sized enterprises.

In derivatives, we plan to enhance our position as a hub to invest, trade and risk-manage all major Asian markets. We will build on our development of pan-Asian products and services, including Asian currency futures, yuan clearing services, our steel product suite, and power and gas derivatives.

We will continue to engage with retail and institutional investors as well as market makers and liquidity providers to improve liquidity and create a vibrant secondary market."

Opportunities and challenges this year: "We plan to focus on growing our new economy sectors - including consumer, healthcare and technology.

Following the Baltic Exchange acquisition, we will build on our leadership in seaborne commodities and shipping derivatives and grow our index and data business.

Investors will continue to react and adjust to slowing growth as well as uncertainties of Brexit on the European economy, while we are all waiting to gauge the impact of a Trump presidency on the US. These concerns are reflected in relatively subdued trading volumes, not just in Singapore, but also in Asia and around the world.

For our part, the SGX will build on our regulatory drive to strengthen investor trust in the market. The establishment of our regulatory function, slated for the second half of the year, is part of our efforts in this direction."


Key lessons in 2016: "Emerging long-term trends that have become more apparent in 2016 - including a post-globalisation era, the sunset of oil, capital superabundance, rise of platform businesses (for example, Airbnb), digital revolution, and accelerating geopolitical uncertainty - will upend the way we lead, organise, manage and finance our businesses going forward.

While Olam has done well in 2016, this drives home the point that we need to adapt to this changing context to remain successful.

We believe that the tide is now turning to companies pursuing a more purpose-driven model that seeks to solve large intractable problems and which emphasises responsibility to multiple stakeholders."

Top business priorities in 2017: "In 2017, we will be entering the second year of our three-year strategic plan. We see significant opportunities for profitable growth in the agri-sector.

We will continue to pursue our growth strategy of identifying businesses that are close adjacencies to our existing businesses that share customers, channels, costs and capabilities with our existing businesses.

For example, in our edible nuts business we entered the walnut and pistachio business in 2016 and plan to enter the pecan and superfoods (chia and quinoa) business in 2017. Similarly, we are expanding into the animal feeds business, a close adjacency to our grains platform."

Opportunities and challenges this year: "The recent Brexit vote, the rise of Donald Trump in the US and the results of the Italian referendum reflect the concerns of some sections of society in the affected countries.

The lack of safety nets for these sections of society that have been impacted by globalisation is likely to result in lower global trade which will have a direct consequence on global growth.

With our presence across 70 countries, we are monitoring and preparing for difficult potential scenarios. That said, we remain confident about the strength of our portfolio and business model."

A version of this article appeared in the print edition of The Straits Times on January 03, 2017, with the headline 'Growth strategies to tackle change and thrive'. Subscribe