Daim Zainuddin - Business

Business

His first business venture was in salt production, partly because it seemed easy and partly because his partner’s feng shui indicated that he should work with water. They went to Thailand, Taiwan and Japan to study salt production, weather forecast, soil condition and location. During the start-up they proceeded to clear 600 acres (2.4 km2) of the coastal land of Kuala Selangor, but because the rain came unseasonably early just when the salt had begun to crystallize, they were almost bankrupted by it.

His next venture was in plastics production. After he obtained a license however, another two licenses were issued and this instigated early and keen competition to Daim’s fledgling company. Furthermore, the workers were incited to strike and eventually the venture proved to be another bankrupting business. Fortunately, his other downstream ventures which included the plastic packaging company, Daibochi and the snack food factory, Sedap Food flourished and were later listed on the Kuala Lumpur Stock Exchange (KLSE). He also invested in the Ports’ downstream business with stevedoring, forwarding and low-loader licenses and had set up a manufacturing plant making steel and iron products like manhole covers and telephone posts. The success of these ventures helped towards offsetting loans and borrowings of the failed venture.

Daim’s great break was in 1971, when he decided to venture into land and property development. Together with two other partners, he formed a company, Syarikat Maluri Sdn Bhd of which he held a 60% majority control. The Company bought and developed Taman Maluri, Cheras and Daim became the first full-fledged Malay property developer in Kuala Lumpur. Having ventured into a predominantly Chinese sector, he might have expected to encounter insurmountable problems, but he did not. Why? Firstly, he did his calculations meticulously, paying great attention to details and had an even keener eye on the bottom line and secondly, he paid his contractors in a timely manner like any other good paymaster, and furthermore he was hands-on. Thus, he was able to overcome earlier skepticism especially from the non-Malay buyers about Malays being able to run property development companies successfully.

After gaining a foothold in the property business, he began to look for other challenges to pursue and to prove that a Malaysian of Malay ethnicity could succeed in other fields. At the same time, other corporate and political stars were rising and Daim wanted to be “the Malay to do it” and so, he forged ahead and bought a 30% equity interest in United Estates Project (UEP) now known as Sime Darby–UEP (developer of the popular ‘Subang Jaya’ township) and went on picking up stakes in the share market, mostly strategic rather than controlling stakes.

He was willing to take risks but also saw opportunities before others. When President François Mitterrand of France came into power and decided to nationalize all French banks, Daim saw an opportunity whilst others were grumbling about the new socialist policies. He knew that Malaysian banking regulations did not allow for government-owned banks to operate in Malaysia and therefore knew that Bank Indo-Suez will either have to close its operations in Malaysia or be sold-off. He wrote a ‘cold-call’ letter to the Chairman/President of the Bank registering his interest in the event that they would want to sell. Of course rather than closing down the Bank they decided to sell to Daim and in 1981 he became the owner of Indo-Suez later renamed the Malaysian-French Bank. Later when United Malayan Banking Corporation (then the 2nd largest bank in Malaysia) became available, he exchanged his majority stake in Malaysian-French Bank for a smaller stake in this larger bank.