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Monday, August 18, 2008

Cambodia’s Transforming Tycoon

Cambodia’s Transforming Tycoon

By Raphael Minder (The Financial Times)

About an hour into our meeting, Kith Meng, Cambodia’s leading entrepreneur, dips a finger into an intriguing little flask on his coffee table and applies a fragrant yellow ointment to his neck and temples. “It’s Chinese,” he says. “When you have a muscle cramp, it helps take the pain away.”

The massage brings a smile to the face of a man who seems to find it hard to wind down. A self-confessed workaholic, the 39-year-old cannot imagine ever retiring or selling his Royal Group conglomerate because, he says, “this business is my passion”. He adds: “If I don’t work, I get sick. I don’t like to take it easy, I like to get things done.”

Such energy and intensity set him apart from the more relaxed attitude of the average Cambodian.

Mr Kith Meng has been at the forefront of Cambodia’s transform­ation from a backward, war-torn country into one of Asia’s fastest-growing economies, averaging 9 per cent growth a year over the past decade. Royal Group’s businesses include the country’s biggest mobile phone company, its first broadband provider and a bank that pioneered ATMs. It is about to launch phone banking.

Such activities have put Mr Kith Meng on a very different path from his fellow ethnic Chinese, who have tended to build family businesses in traditional sectors such as farming, mining and logging.

“We are going into every sector we can because Cambodia needs every sector to grow,” he says. “After that, we’ll see in what industry we want to be an Asian player.”

With such ambitions in mind, he has already started touring financial centres such as Singapore and Hong Kong to see how and when Royal Group should widen its presence in the region as well as list the equity of a company that has already made him a billionaire. (He refuses to value his assets precisely.)

Mr Kith Meng also has casino interests in Cambodia and one of his recent trips abroad was to Macao, the world’s largest gaming centre, accompanied by western bankers. His conclusion is unambiguous, and typical of a man who believes Cambodians must shed their inferiority complex towards other Asians. “Macao is already so crowded,” he says. “I think people in Macao should be looking here, not us looking there.”

Although he has so far confined his activities to his homeland, his ascent has started to draw comparisons with more renowned and far-reaching Asian tycoons, including Thaksin Shinawatra, the Thai businessman and ousted former prime minister. Mr Kith Meng scoffs at that particular comparison, insisting he has no desire to use his wealth as a political launchpad as Mr Thaksin did in Thailand, where he created his own political party. “I am a businessman and just don’t have any of that [political] ambition,” he says.

In fact, insiders say Mr Kith Meng’s allegiance to Hun Sen, Cambodia’s long-standing prime minister, has been crucial to his success. Royal Group’s meeting rooms are adorned with pictures of the Hun Sen family, confirming what he describes as “very good relations with the government”.

Mr Hun Sen was returned to power in a landslide electoral victory last month with the backing of a business community that has benefited from strong growth and political stability after decades of war. Still, the government’s record has continued to be stained by international corruption studies that rank Cambodia among the most corrupt nations in the world. On that topic, Mr Kith Meng echoes government officials, emphasising the billions of dollars of foreign investment that have poured into Cambodia in recent years as vindication of Mr Hun Sen’s efforts to guarantee a fair and transparent business and legal environment.

“From outside, people can make any statement they want, but those [investors] who actually come here realise that Cambodia is a place where they should do business,” he says.

Even though he also holds the honorific title of Okhna, the Cambodian equivalent of a British peerage, associates and some other local businessmen say he steers clear of fellow Cambodian high-flyers. While Royal Group is set to build one of the skyscrapers that are redrawing Phnom Penh’s skyline, the company’s headquarters are in a nondescript office block and are entered via an electronics dealership with peeling walls.

Asked about this surprisingly low-key location, Mark Hanna, his Irish chief financial officer, says: “It might seem strange but I don’t think he’ll ever move from here. Perhaps it’s a mix of feng shui, good luck and superstition.” Meanwhile, Mr Kith Meng has his own take on good fortune: “Luck is about intelligence and timing.”

Mr Kith Meng’s workplace may be modest but he does have some flashy tastes. His oversized Cartier gold watch is overshadowed only by his diamond ring. He also has a penchant for luxury cars, owning a Rolls-Royce and a Bentley. He has no plans to settle down. “I’m single because when you’re a workaholic you don’t have time for that,’’ he grins.

Mr Kith Meng’s meteoric rise has drawn a mix of envy and disdain from some rival businessmen.“I can assure you that he has plenty of enemies here,” says a local financier. But he denies feeling threatened, describing his bodyguards as assistants who are “just here to support me”.

He makes no qualms about taking a different stance from the local elite, which tends to close ranks rather than open its doors to foreigners. “I [make joint ventures] with international companies, not Cambodian ones,” he says.

That openness may stem from an adolescence spent in Australia in the aftermath of the Khmer Rouge regime (see below). However, despite having Australian citizenship and maintaining a home there, Mr Kith Meng has “mixed memories” from his youth in Canberra. “In the late 1980s, Australia was a very discriminatory society,” he says. “I think that society has now changed completely.”

Now, Royal Group’s most important Australian connection is its joint venture with ANZ bank. Meanwhile, its telecoms business is a partnership with Luxembourg-registered Millicom International Cellular. Mr Kith Meng also has exclusive distribution rights in Cambodia for a gamut of multi­nationals, including Canon, Siemens and Motorola, as well as the restaurant chains Pizza Hut and KFC. Mr Hanna is among a dozen English-speaking executives working for the group, including a team of former bankers from Macquarie, hired to set up an investment bank for the sprawling business empire. “We, as Cambodians, need outside expertise,” says Mr Kith Meng.

Unsurprisingly, he likes to monitor any international news or report relating to Cambodia.

He cites reading as a favourite hobby, although he has to check with an assistant for the exact title of the book he is currently enjoying. “Hey, what’s the name of that book that I’m reading, that you bought for me?” he shouts across the room. “ Don’t Sweat the Small Stuffby Richard Carlson,” comes the answer. Wise advice, perhaps, but probably something Mr Kith Meng worked out long before starting the first chapter.

‘All this suffering has made me see that I had to be somebody’

As builders erect shopping malls and residential towers around Phnom Penh and chauffeurs wait for businessmen outside trendy restaurants, it is hard to believe it used to be a wasteland – the consequence of the Khmer Rouge regime.

Like most Cambodians born before Pol Pot took power in 1975, Mr Kith Meng experienced the repression first-hand. He calls it “the painful story about my life”.

Because his father was a provincial landlord and businessman, his family was an obvious target. They were forcibly separated and both his father and mother starved to death. In 1980, after the Vietnam-led overthrow of the Khmer Rouge, he was reunited with some family members in Phnom Penh. They then travelled as refugees to a United Nations camp in Thailand. From there , they emigrated to Australia, returning to Cambodia in 1991. As the long-postponed trial of former Khmer Rouge leaders is about to judge its first case, some younger Cambodians have questioned its value. But Mr Kith Meng is adamant that “justice must be given”.

His intransigence leaves little doubt that his past has shaped him. “All this suffering has made me stronger, made me see that I had to be somebody,” he says.

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