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Straco: Getting down and dirty to come out on top
GETTING its hands dirty is how Straco Corporation comes out on top - every time. Its founder and executive chairman Wu Hsioh Kwang, 66, does not believe in farming work out to consultants. He wants his staff to handle every venture themselves, "from start to finish".
"Every time when we invest in a project, we will spend a lot of time and effort on feasibility studies and research ourselves, before spending money on the tender documents. That way, we are able to stay committed, passionate and interested," he said.
And stay the company did. For its success in becoming one of the few major foreign players in the China tourism market,Straco was conferred the Top 10 Asean Enterprises Entering China Award by the China-Asean Business Council in 2014.
This year, with the additional effort in turning around the iconic Singapore Flyer into a top visitor attraction, it took The Enterprise Award (2016) at the Singapore Business Awards (SBA).
Since its foray into China in 1980, Straco Corp has become a leading developer and operator of aquatic-related facilities and tourism-related assets there.
"From day one, we had identified tourism as a sunrise industry and committed ourselves to become a leading attractions developer in the region. To do so, we set out to develop world-class attractions that are ahead of their time. We also made sure that we constantly renew our exhibits in line with market developments, such as the rise of social media and the spending habits of the millennials," Mr Wu said.
But it had not been easy.
Mr Wu recalled how, when his company first went to Xi'an to build the Lintong Lixing Cable Car near Mount Lishan in 1991, there was a protest by a martial arts school near the site. "It took several months of delay and two lost teeth to finish the work," he said. A manager had been hit in the face by a rock thrown by one of the students and lost his two front teeth.
Today, Straco also owns the development rights to Chao Yuan Ge, where the Lintong Lixing Cable Car alights, and has obtained exclusive permission to display relics unearthed from the Chao Yuan Ge site on Mount Lishan.
Its main operating assets in China comprise the Shanghai Ocean Aquarium in the New Pudong Area; Lixing cable car service at Mount Lishan in Shaanxi province; and the Underwater World Xiamen on the scenic Gulangyu Island in Xiamen City.
"To achieve good business performance, we have a strong team in China and Singapore, to ensure that our operations deliver a consistent, quality experience for visitors," Mr Wu said, adding that there are controls in place to maintain good corporate governance.
BUYING OVER THE SINGAPORE FLYER
In 2014, its subsidiary Straco Leisure bought over the Singapore Flyer, an iconic landmark located in the Marina Bay area, for S$140 million when the company behind it was placed in receivership in 2013. Straco managed to turn around the Flyer swiftly and in its 2015 annual report, it said that the Singapore Flyer had been profitable since end November 2014.
"We believe there is a risk in every industry. The key is how you manage that risk. When investing in a tourism project, the success or failure is determined at the point when you build the asset," Mr Wu said.
He said Straco only picks prime city locations with critical mass to ensure good tourism growth for its projects, before benchmarking itself against similar ventures that are best in the world.
"We often think like a craftsman, patiently gathering the best ideas and resources before we slowly shape the concept until it is close to the ideal we have in our minds," Mr Wu said.
Citing the Shanghai Ocean Aquarium, he said many competitors from Japan and the United States, with years of experience in the business, were competing with Straco for the project. "We were the only company doing nothing remotely related to the aquarium business but we saw strong potential for the project," Mr Wu said.
"It was after having been to Pudong that I saw its potential. Then there was only the TV Tower. We went on to do our due diligence and hired experts from Britain, Australia and New Zealand," he added. And when Straco turned up to bid, the company came with truckloads of documents so it was not surprising that it sealed the deal.
Straco built and operates the 20,500 square metre aquarium and "we even got the late Mr Lee Kuan Yew to not only come to break ground but also officially open the place", Mr Wu said, proudly.
Senior vice-president and assistant to executive chairman Wu Xiuyi added that Straco was very careful about the sea creatures they have at the aquarium. "There are certain sea creatures we do not put at the aquarium as it would be difficult for them to survive in a confined space where there is not enough room for them to manoeuvre," she said.
Mr Wu said the company has also been very careful in its investments. "Every year, we assess many potential projects but we usually have to walk away because of key factors such as location and infrastructure. Being careful stood us in good stead because we are able to build a strong cash reserve that we can use when a good opportunity comes our way," he said.
He said that he saw the potential in the Singapore Flyer before deciding to buy it over. "It was the same feeling I got while standing in Pudong in 1990. The Flyer was in the right location with the potential to attract large numbers. Also the government has a tourism strategy that helped Straco see the bigger picture. That helped the turnaround," he said.
Straco worked hard to "tighten service levels and operating efficiency" and Mr Wu said he kept most of the Flyer's original operating staff, "who were and still are passionate about the Flyer".
"When I think of productivity at our attractions, it is not about reducing the headcount. In the service industry, there is only so much you can automate. You need the human touch to deliver good experience for visitors. For us, it is more about our front-line team and how they can continue to improve in service quality," he said.
Mr Wu said Straco is constantly building for the future and his existing assets go through major revamps from time to time.
And building for the future does not only stop at his tourist attractions. "In China, we send our marine biologists to schools to teach the young about marine conservation. At home, I have sponsored a study award at the Yale-NUS College, which has been matched by a grant from the government. The reason I picked Yale is it was one of the first schools in the US to have a liberal arts programme for everyone starting tertiary education. This way, the young people learn to have a heart in everything they do, be it engineering, medicine or law," he said.