Keynote Address by the Prime Minister At The Graduation Ceremony of the GLC Transformation Programme

By Friday August 7th, 2015 No Comments

Bismillahhirahman Nirrahim

Assalammualaikum Warahmatullahi Wabarakatuh

Selamat pagi dan Salam 1 Malaysia

Yang Amat Berhormat Dato’ Seri Dr. Ahmad Zahid Hamidi;
Timbalan Perdana Menteri,

YB Menteri-Menteri Kabinet;

YBhg Tan Sri Dr Ali Bin Hamsa;
Ketua Setiausaha Negara,

Ahli-ahli Putrajaya Committee on GLC High Performance,

Pengerusi dan Ketua Eksekutif GLICs dan GLCs,

Tuan-tuan dan Puan-puan sekalian,

1. Pertama-tamanya, syukur ke hadrat Allah SWT kerana dengan izin-Nya jua kita dapat berkumpul pada pagi yang berbahagia ini untuk kita meraikan kejayaan Syarikat-syarikat Berkaitan Kerajaan atau GLC yang telah melalui Program Transformasi GLC yang bertempoh 10 tahun dengan jayanya.

2. Program ini dilancarkan sepuluh tahun dahulu di dalam dewan ini oleh Tun Abdullah Ahmad Badawi yang pada ketika itu Perdana Menteri Malaysia.

3. Matlamat Program yang dilancarkan itu adalah terang dan nyata – untuk memacu ekonomi Malaysia, memberi sokongan kepada rakyat dan menerajui negara ke arah mencapai status negara maju menjelang 2020.

4. Pada masa yang sama, Kerajaan menyedari GLC-GLC mempunyai potensi yang lebih besar untuk menyumbang kepada pembangunan ekonomi negara.

5. Tuan-tuan dan puan-puan, izinkan saya meneruskan ucapan saya dalam Bahasa Inggeris.

Ladies and Gentlemen,

6. Before the start of the Programme, unfortunately many GLCs were underperforming. A few were even on the verge of bankruptcy and had to be recapitalised by the Government. We recapitalised these companies because we believe in their potential.

7. When I became Prime Minister in 2009, the GLC Transformation Programme or GLCT Programme, which was begun by Tun Abdullah Badawi, had already achieved considerable success. The corporate restructuring, operational improvements and other measures taken prepared the GLCs to enter the 2008 economic crisis from a position of strength and to weather the ensuing volatility. This helped our economy to remain stable.

8. Syukur Alhamdullilah, having seen the positive impact of the GLCT Programme, I was determined to continue to drive it as a national priority. To give the Programme greater authority, I began chairing the Putrajaya Committee on GLC High Performance.

9. I wanted the Programme to benefit not just the corporate sector, but all Malaysians. I was, and still am, determined to develop the capital economy. However, at the same time, I wanted to champion the people economy – lifting the household income, contained cost of living and essentially enhancing the quality of life of all Malaysians. It is absolutely critical that we balance the dynamic of capital economy and the people economy to ensure long-term stability and sustainability of our country.

Ladies and Gentlemen,

10. Ten years after the launch of the GLCT Programme, the GLCs are more robust, well-governed and performance driven. They have also become stronger institutions with well managed balance sheets with greater regional and international presence.

11. From May 2004 to the final month of the GLCT Programme, July 2015; market capitalisation of the G20 grew almost three times – from 134 billion ringgit, to 386 billion ringgit, and hitting an all-time high of 431 billion ringgit on 7 April 2015. Over the same period, total shareholder return increased 11.1 percent per annum.

12. Meanwhile, G20 net profit hit 26.2 billion ringgit in FY2014, and grew at a compounded annual growth rate of 10.2 percent from FY2004 to FY2014.

13. In addition, the G20 has made significant inroads into foreign markets. In 2014, they had revenue generating operations in 42 countries. The G20’s overseas share of assets in 2004 was 11 percent, and grew to 26 percent in 2014, while overseas share of revenue in 2004 was 28 percent and increased to 34 percent in 2014. This is indeed a remarkable performance.

14. The GLCs have not only successfully gone international, but several have also made a mark regionally and globally. Projects such as the Battersea Power Station in London and the Shuaibah Independent Water and Power Project in the Kingdom of Saudi Arabia, are just some examples of our successes abroad. Today, five of the G20 – Axiata, CIMB, Maybank, Sime Darby and TNB – are in Forbes’ top 2,000 World’s Biggest Public Companies List for 2015.

15. Axiata has grown to become one of the largest telecommunications companies in Asia. CIMB and Maybank have significant operations in South East Asia, while MAHB has become the first Asian company to fully own a European airport.

16. IHH is today the largest listed hospital group in Asia and the second largest in the world by market capitalisation. Sime Darby is the world’s largest listed palm oil player with a land bank of more than 860,000 hectare.

17. We must also recognise the role of the GLC banking groups in making Malaysia a Global Islamic Finance Hub.

18. On the domestic front, GLCs have spearheaded the development of economic corridors, namely Iskandar Malaysia, the East Coast Economic Region, and the Northern Corridor Economic Region.

19. In addition, the GLCs have delivered large scale infrastructure projects, such as the Second Penang Bridge, KLIA2, KL Sentral and High Speed Broadband. We also must not forget that the GLCs have been playing a significant role in supporting the Government Transformation and Economic Transformation Programmes.

Ladies and Gentlemen,

20. We have been urging GLCs and all public listed companies to focus on workforce diversity. We want more women on Boards, and for company workforces to better reflect our ethnic composition. In this regard, I am happy to note that in 2014, 16.9 percent of board positions in the G20 and their listed subsidiaries were heldd by women – well above the 10.2 percent average for all Bursa Malaysia listed companies.

21. In September 2013, I launched the Bumiputera Economic Empowerment Agenda or BEEA, as one of the key national programmes for Malaysia. The GLCT fraternity took on this mandate, and I am pleased to report that in 2014, GLICs and G20 economic activities for the Bumiputera community grew to 43.9 billion ringgit, up from 34.2 billion ringgit previous year. This increase of 9.7 billion ringgit, exceeded the initial 7 billion ringgit target.

22. Last year, the BEEA benefited more than 1,000 vendors, creating 10 anchor companies, projects worth 8.2 billion ringgit allocated and a total of 13.3 billion ringgit contracts tendered.

23. For Bumiputera students, more than 5,000 scholarships were awarded, while under the Graduate Employability Management Scheme or GEMS and Skim Latihan 1Malaysia or SL1M (pronounced as slim), more than 4,000 participants were trained.

24. As part of our people economy initiative, 2,000 affordable housing and commercial units were benefitted to the larger Bumiputera community. Towards expanding Bumiputera wealth, Amanah Saham Bumiputera 2 scheme of 10 billion ringgit units was launched.

Ladies and Gentlemen,

25. Ten years ago, we saw the capacity for GLCs to deliver. They delivered. Throughout the last ten years, the GLCs contributed 108.6 billion ringgit in dividends and 62.7 billion ringgit in taxes. You delivered.

26. Again, in getting the balance between capital economy and people economy, GLCs have improved the well-being of our communities through their various corporate responsibility activities.

27. GLCs have been providing new business opportunities, running vendor development programmes, while the number of suppliers that the G20 did business with in 2014 stood at almost 67,000, awarding them some 98.2 billion ringgit worth of business.

28. In developing talents from the younger age group, GLCs through the PINTAR School Adoption Programme have impacted more than 184,000 students from 2007 to 2014. Meanwhile under the GEMS and SL1M (pronounced as slim) which aim to enhance the employability of graduates, almost 5,000 unemployed graduates were trained by the G20 from 2009 to 2014.

29. Yayasan Sejahtera – which aims to reduce poverty in under-served communities in in rural areas, assisted more than 6,000 families over the same period. From 2004 to 2014, scholarships amounting to about almost 600 million ringgit were awarded to more than 7,000 students.

30. Overall, both GLICs and G20 spent in the region of 6 billion ringgit over the 10-year period for various corporate responsibility initiatives.

Ladies and Gentlemen,

31. We intend to become a significant player in the global market. As such, we must be able to offer not only products and services of international standards, but we must also adopt and adapt the best practices to ensure long-term value creation.

32. I am happy to note that seven of our G20s are now listed on the FTSE4Good Bursa Malaysia Index, which was introduced last year to measure the performance of companies that showed strong Environmental, Social and Governance practices.

33. While we celebrate our successes, we have much more to do in the final leg of our journey towards 2020.

34. The pursuit of excellence, whether in terms of being best in class or as regional or global champions, does not end with this graduation. The rest of the world will continue to compete for global markets, and our GLCs must be ready to challenge and succeed, above and beyond their graduation levels.

35. It is indeed imperative that GLCs continue to draw on the spirit of the Transformation Programme. We must continue to make the most of our collective resources, intensify our acquisition of knowledge to innovate – conquering new frontiers, building on the successes that we have achieved through this Programme.

36. Moving forward, GLCs must:

i. Strive to become not only regional champions but also to become leaders in their respective industries;

ii. Continue not only to support nation-building but also, hand-in-hand with the Government, to actively help shape the national agenda; and

iii. Grow from being well-governed companies to become strong, responsible model institutions.

37. To this end, I am pleased to announce the creation of a successor entity, a GLICs and G20 club by January 2016. This club will have an important role in spearheading all our efforts to achieve high income nation status, guided by the 3 Underlying Principles of the GLCT Programme.

Ladies and Gentlemen,

38. We would not be here today – if not for the support, cooperation, dedication and commitment from the GLICs and GLCs. I extend my sincere thank and high appreciation, to all employees of GLICs and GLCs, the management, CEOs, Chairmen and the Board of Directors, members of the PCG, and last but not least the PCG Secretariat, for ensuring that the objectives we set for this ten-year transformation journey were successfully met.

39. Your journey ahead is full of great challenges. Beyond 2020, you will be operating in a high income economy. Your business landscape will change. Your customers will change. Even your business model may change. It is our aspiration, that Malaysia one day has at least a few home-grown leading global brands. We rest this hope on each and everyone of you.

Thank you.

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