RECODA sat down with Press Metal co-founder and CEO Tan Sri Paul Koon, who gave insights on leadership in a challenging business environment and working with family members to grow the firm to the largest aluminium producer in Southeast Asia.
After a challenging economic environment, base metals commodities are now on an upswing. Could you speak briefly on this?
I believe there is quite a big support from the market, which is line with the industrial recovery from Covid-19. There is optimism. I suppose it began from the US election, where everyone believe trade tension should ease and improve. Demand is rising and showing signs that it is going to improve. Also, the US dollar is going to go weaker, which helps commodity support.
Aluminium is going to be very strong. We believe in this metal purely as there is this a huge directional shift into being environmentally conscious. There will be a new mindset of how to maintain a better environment movingforward.
For example, if you want cleaner air, the best way to tackle this is to reduce carbon emissions especially from automobiles and the only way to reduce it is to make it lighter. Aluminium becomes the choice material to make it happen, so all the EVs (electric vehicles) that are coming on stream, Tesla and others use a lot of aluminium in theirautomobile. The factory casing, the wheels, all are going to use more and more aluminium. That is one trend that is going in the direction towards green technology.
Are you still continuing with the plan to commission Phase 3 of your smelter expansion in 2021?
We started this project before the pandemic but because of the huge setback during the MCO, we stopped for months. When we restarted the projects, to get engineers from overseas was very difficult. Projects were delayed but we are determined to complete it. So, we are definitely looking at maybe another month or two where we can actually start this project. It will be in Samalaju Phase 3.
With an additional 320,000 tonnes, it will be a 40% increase (for a production output of 1.08 million tonnes per annum), we are looking at recruiting 1,000 more workers from this region. Aggressively, we are adding about 100 to 200 workers, monthly. We are getting ourselves ready to start up, hopefully it can happen without much delay.
You mentioned the importance of hydro-power in providing the energy for your operations. Is this the main reason you decided to base your plants in Sarawak?
Absolutely. We have always been in the aluminium business and started in downstream, buying all these raw materials. We saw the opportunity when Bakun was built and power was available. Naturally, for power intensive industry it is one good starting point, where we put up aluminium smelting in Sarawak. In West Malaysia, it is not possible because the power would not be available in this manner. That was the main driver to put up a lot of these investments in Sarawak.
The world is bearing the brunt of the Covid-19 pandemic. What do you think separates companies that are able to continue their business and those that are not?
It is a tough situation. A lot of people have gone through difficult times but this time, it is unimaginable. No one has gone through such a pandemic in recent times. I guess if you really want to get through a difficult time like this, firstly, you need good leadership. The leaders play an important role in determining how to get themselves out of this difficult time.
I believe one has to understand it is a challenging environment. The leader has to provide a clear pathway as to how to handle the situation now and how to survive. The business environment is tough but there is also opportunity.
What is new normal going to look like?
At the end of the day, what it means is that you have to adapt to new changes in our way of life and in business. Even children going to school have to adapt to online classes. Would it be a permanent way going forward, as the new normal? I may not think so. In certain aspects, we have to go back to pre-Covid conditions.
Online businesses will be on the rise. For example, the convenience of purchasing groceries online compared to direct physical purchase.
As for business, perhaps less travelling? We find that even with less travelling, we are still able to do business. We have to engage with more technology to stay in touch with customers rather than travelling. I think that is a good way, it saves a lot of time. A lot of work operating from home as well. That is one of the ways going forward.
You basically started from practically nothing, with your brothers. Are there any lessons from that experience that you wish to share with today’s entrepreneurs?
It all started in the 1980s, after I graduated overseas from America. It was during a recession time, so it was very difficult to get a job then. It so happened that my brother had a business selling hardware products, and I thought to start a small factory to sell aluminium to him. We started the business by renting a factory here in Klang Valley. It was totally new to me. I’m a computer and electrical engineer. Coming into aluminium, I knew nothing. I was on the floor everyday getting my hands dirty and learning the ropes, it was a steep learning curve. We started from there and kept growing.
The break came when I made my move abroad, to China. If there is anything that I have gone through that I may share with young entrepreneurs is that you must be able to take certain risks or ventures. It may be challenging but it actually brings a lot of new knowledge.
We ventured into China after about six or seven years of operation because Malaysia is relatively a small market. China was very strong. It was difficult to compete with them, so I decided that if I cannot fight them, I better join them. So I went up there to learn how they did it. I would say from there, we began to expose ourselves more. We learned how to do it better, we invested quite a bit of facilities in China, and we were able to capture a larger market.
In the end, just think big. Think global. Have a daring spirit. I know it is difficult and challenging. There could be failure, but without doing it you would not be able to get yourself exposed to new methods, new technology.
What is it like running a large corporation with your family?
I know there are many stories about families, where as the business gets bigger, there will be differences of opinion, arguments and fall outs. We are very mindful of that. Definitely, everybody has a different opinion on how to run things but the important thing is that we know our place. We divide our roles, so that we focused on different areas.
I think we have reached the stage in the company to be professionally operated, since we are a larger corporation. We have a lot of responsibilities to keep the company sustainable. The family influence will be less, moving forward. We want to make sure if there is any second generation taking over, they would have to start from ground zero. After having spent so much effort building something up, if you are not careful it can all go down.