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Keeping the family spirit alive
KEEPING the business in the family is a personal, as much as a professional, priority for diversified conglomerate Jebsen & Jessen (SEA).
"Our succession rules ensure that only family members who have the capability and the willingness to join the business do so," says Mr Heinrich Jessen, chairman of Jebsen & Jessen (SEA). "To ensure equity between the family members, shareholding members must buy their shares in the company as they are not inherited."
Stricter family rules are in place to ensure impartiality. He explains: "They are only allowed to be shareholders if they work in the business. So, deciding to join or not to join the family business is separated from being a purely financial consideration. Although we are today in the third generation (and could, under another succession system, be having some 200 family shareholders), we only have three family shareholders."
Among other businesses, the company manufactures packaging material handling systems and offshore equipment. Tongue-in-cheek, Mr Jessen says "third generation shareholders of family businesses sometimes have a bad reputation in the market! We're passionately determined to crack this jinx and train our focus on our long-term KPI, which is to hand over to the fourth generation something that is better than what we took over from the second".
In its 120-year history, the family enterprise faced two near-death experiences, one during World War I and another during World War II, when business almost ground to a complete halt.
Recalling the troubled times, he says: "In the late 1950s, the political situation in China made it more and more difficult to do business there. And more recently, in the late 1990s, our group was severely affected by the Asian financial crisis. In both these cases, the challenges actually helped to reignite the enterprise's entrepreneurial spirit.
"New business opportunities were pursued after the wars. The worry about China triggered among the shareholders at the time a motivation to start doing business in South-east Asia. The downturn in the late 1990s allowed the group to deploy some of its best talents to implement a comprehensive, multi-module and fully-integrated ERP platform, which is part of our value proposition today."
Mr Jessen started his career as a tropical biologist before joining Jebsen & Jessen (SEA) in 1995. He has worked as director, environment, health & safety, general manager of Jebsen & Jessen Packaging Johor and regional managing director of MHE-Demag. He has been chairman of the executive board since 2010.
Asked if there was a mechanism for resolving family disputes, he replies, matter-of-factly: "Our shareholder agreements contain mechanisms that ensure that 'business-first' decisions can and will always be prioritised over the individual whims, ambitions or emotions of individual family shareholders."
To ensure a smooth transfer of control of the business from one generation to the next, Mr Jessen says the value-added family spirit takes priority. He says: "We have been lucky that able and willing family members were available in each generation to take over from their predecessors. Today, we have trustee as well as successor-of-successor mechanisms in place to cater to the eventuality of a 'gap' period during which no successor is available as well as untimely death scenarios.
"But it has to be said that even the most elaborate and throughtfully crafted plans can never cover all eventualities - faith and good fortune have a role to play too!"
Officially established in March 1895, Jebsen & Jessen started out as agents of a shipping company, operating 14 steamers in China's coastal trade. In January 1909, the partners set up a Hamburg outfit in Germany to coordinate the trading activities and maintain relations between their firms in China and their European principals.
In December 1963, they established a trading interest in Singapore and Malaysia which, over the years, has evolved into a diversified regional business group, operating as the Jebsen & Jessen Group of Companies South East Asia.
The guiding principle has been to work for a common goal, mindful that, as the Chinese philosopher Mencius said: "Within the four seas, all men are brothers."
It continues to thrive and play a major role in Greater China, functioning as an important trading link between China and the West. Jebsen & Jessen Hamburg operates independently as a company engaged in international trade, while Jebsen & Jessen (SEA) enjoys a strong market presence in Asean.
Together with other sister companies Bodum, Triton Textile and GMA Garnet Group, the Jebsen & Jessen Family Enterprise now employs around 7,000 people worldwide, with an annual turnover of 3.2 billion euros (S$4.88 billion).
On the longer-term company's plans for growth and keeping it in the family as a top priority, Mr Jessen adds: "Broadly speaking, we are focused on ensuring that a growth-oriented entrepreneurial spirit is allowed to thrive while concurrently maintaining sound, conservative financial discipline.
"This manifests itself in different specific growth plans for each particular business in its own geography. Fortunately, we have always been able to finance our own growth and it has never been necessary to seek funding through an IPO."
The latest EY-Barclays Family Business Award of Excellence comes as a distinctive feather-in-the-cap. Mr Jessen explains: "Receiving this prestigious award is a great honour and motivates us to continue the family enterprise approach that has been established and followed by the previous generations.
"This ensures that a growth-oriented entrepreneurial spirit is allowed to thrive while concurrently maintaining sound, conservative financial discipline and independence from any single industry, geography or business relationship."
The "unique and integrated regional presence in South-East Asia" gives Jebsen & Jessen an advantage, says Mr Jessen, in operating on a "world-class infrastructure that allows us to leverage economies of scale and act nimbly on real-time information, to the benefit of both our customers and our technology partners".
Confidently, he reiterates: "This region is our home. Our people reflect the cultures, histories and capabilities that exist here. We believe we have a part to play in looking after our home and this principle turns into action through how we treat our staff and our environment and through our community outreach work.
"Continuing the journey into the future, we maintain the entrepreneurial attitude that our forefathers instilled. Combined with the valuable expertise and experience we hold within our people, we are ready to meet and to act on the new possibilities ahead."