The Edge: From a company that started out as a pure construction play, IJM is now a well-diversified outfit, thanks to a focused management team. But beyond deputy group managing director Teh Kean Ming, are there managers who have been identified to manage and grow the various divisions, such as toll roads, plantations, property and ports?
Krishnan Tan: Each division is run by a strong management team with its succession issues dealt with internally. In fact, transition has already taken place in some of the divisions, like construction and industries, while some others will see a smooth succession taking place in the next few years.
 
To an investor, IJM is a large company with interests in different listed companies. Going forward, what do you think will be its major contributor in terms of cash flow and profitability? Construction, property or plantations?
Each of the operating divisions has the opportunity to lead depending on market environment. For instance, we saw strong market dynamics for the industries division last year and we took advantage of it to bring about the best results ever by the division. In the previous year, the plantation division leveraged good crude palm oil (CPO) prices and turned in a record performance. Looking into the future, with considerable investments in infrastructure and properties in Malaysia, India and other countries, we can see substantial cash flow and earnings contributions as these assets mature.
 
Wouldn’t it be better to consolidate all the different companies under one roof?
Different divisions have different levels of funding needs and management attention.
 
You have helmed IJM since 1997, first as group managing director and then as CEO and managing director. What would you regard as IJM’s most important achievement under your leadership?
It would be the strong set of diversified businesses, management teams and business processes that have been put in place and nurtured to set the group on a solid path to future performance.
 
IJM is a unique construction company in the sense that it does not have a controlling shareholder. How do you deal with the differing aspirations of the shareholders?
The fundamental needs of the shareholders are the same, which are earnings, capital growth and a management team that will deliver investors peace of mind, such as decent governance. We focus on those objectives with a simple view that management will get continued freedom to manage without interference provided we deliver.
 
It was during your tenure that IJM made a significant purchase — Road Builder (M) Holdings Bhd — which is quite unlike IJM because it grows its business organically. What prompted you to acquire Road Builder? Was it the assets or the manpower?
Firstly, there was an opportunity as the news was that the founding shareholder intended to sell out while its shareholding was fragmented. Secondly, and more importantly, its businesses and assets were a good fit and the management team could possibly be integrated easily with IJM. Thirdly, organic growth would be slow and building a management team comprising a big number of talented individuals would take too long.
 
Taking up an associate stake in Kumpulan Europlus is another thing that IJM did during your tenure. It’s easy to see why considering that K-Euro has the concession rights to the West Coast Highway. What is the progress of the highway? When can we expect to see its financial close?
It’s not appropriate for me to comment on behalf of Kumpulan Europlus.