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Yoma Strategic chief executive talks leadership transition

Originally appeared in Myanmar Times

June 3, 2015

By Jeremy Mullins

Yoma Strategic Holdings chief executive Andrew Rickards is stepping down next month after a nearly four-year term, though remains bullish on Myanmar’s long term prospects.

As the best-known Myanmar-focused company listed on a foreign exchange, Yoma Strategic has attracted business and investors eager to participate in what’s sometimes touted as the last frontier economy.

Yoma Strategic is chaired by Serge Pun, one of Myanmar’s best-known entrepreneurs, who also chairs Serge Pun & Associates and First Myanmar Investment. While Mr Pun is not shy about publicity and has been one of the leading public faces of a more business-friendly Myanmar, Yoma Strategic itself has grown and changed significantly during Mr Rickards’ term at the top.

Singapore-listed Yoma Strategic has moved beyond its core property business into diverse areas such as the telecoms tower business through Myanmar Tower Company, automotive through agreements with Hino, Volkswagen and Mitsubishi Corporation, and also quick-service restaurants with KFC.

These agreements and a couple of dozen others were signed in the last few years, as Yoma Strategic looks to become less reliant on property. The company’s goal is that 50 percent of its business is property and the rest making up the other 50pc.

Mr Rickards said that as a whole, the group may now be doing less new deals going forward, and more making a go of what it has already announced.

“If you imagine the analogy of an accordion, initially you open it out and then you hone in and get the right sounds coming out,” he said. Mr Rickards said Yoma’s next few years will likely be similar, as it ends up with perhaps five core businesses it which it can be a market leader.

Real estate will doubtlessly be one of those core businesses. While the market has slowed this year, Mr Rickards said the Group is optimistic about its long-term potential.

The country is coming out of a long period of no new builds and has a lot of catching up to do, he said.

“I don’t think one should be fooled by all these billboards popping up saying ‘lots of apartments coming’ … Not all the projects that are announced are actually getting built. We think the supply-demand mismatch is still there,” he said.

Yoma Strategic also reckons the property market is not homogenous. Different parts of the sector move at slightly different times, with for instance serviced apartment supply still lagging residential development, he said.

With the lion’s share of its business concentrated in Myanmar, the firm rests heavily on the international profile and actions of the country. The period leading up to this year’s election will probably be quiet compared to the rapid change over the last few years.

“I’m remarkably bullish about the medium to longer term, but I do think this year will be a little slower,” he said. “However, I don’t think pausing for breath is a bad thing.”

Yoma Strategic aims to continue its current conglomerate approach. The firm is a Serge Pun-created vehicle, and will be led by his son Melvyn Pun, who becomes CEO on July 27. Another son, Cyrus, is the head of Yoma Strategic’s real estate, the firm’s most important division.

Mr Rickards said that while it is a heavily family-dominated company, much of his work over the past 3.5 years has been institutionalising the company by bringing in well-regarded shareholders like Aberdeen and Capital, as well as bringing international best practices into its internal systems. He also said that in the region, family-dominated companies have often outperformed non-family companies in the longer term.

“There’s clearly a very heavy influence from the family, but I think that’s a good thing,” he said.

Melvyn Pun is an ex-Goldman Sachs employee, who was hired into the American investment bank fresh out of university by Mr Rickards. While the two did not work in the same division at Goldman Sachs, they now share an office in Yangon’s FMI Centre, as Melvyn is CEO of SPA Group.

Asked why now for transition, he said the plan had always been for Melvyn Pun to step-up to the CEO position. The timing is also less important than making the handover successful.

“It’s a bit like the 4×100 relay race – the most important thing is you don’t drop the baton when you hand over from one runner to the other,” he said.

Mr Rickards himself said he will stay on as an adviser to the new CEO through to the end of the year, and then will be working on something else. While he declined to say what it will be, he said it will be a Myanmar-related activity.

“Expect me to be wholeheartedly involved in Myanmar,” he said. “I believe in our lifetime the reemergence of Myanmar still represents one of the greatest opportunities and one that doesn’t come around very often.”


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