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Risk-taking pays off for OUE boss
IN 2012, Stephen Riady stunned and awed the corporate world when his company OUE, then known as Overseas Union Enterprise, led a group to launch a S$13.1 billion takeover bid for industry heavyweight Fraser and Neave (F&N), locking horns with Thai Beverage's billionaire owner Charoen Sirivadhanabhakdi.
Though Dr Riady walked away from the fierce two-month battle without the prize, he cemented his image as a risk-taker and go-getter.
These are the qualities that the OUE executive chairman deems essential in business leaders, especially if they wish to bring their companies to success in the region.
"We have to develop a character that is risk-taking, determined and forward-looking. When we say risk-taking, we mean being prepared to go into new markets or new opportunities even if the probability of success is challenging," Dr Riady tells The Business Times.
"Take, for example, Singaporeans and mainland Chinese. In Singapore, if you told someone the business has 70 per cent chance of success, people may tell you they are not prepared to take the risk. In China, it is the opposite. They will fight for the chance of success even if the probability of success is less than 20 per cent. They have the fighting spirit and are willing to take risks."
Dr Riady also emphasises the need to have perseverance when entering new markets, and to always be updated on the latest developments in one's business so that one can see trends happening in the future.
The ability to see future trends is perhaps why OUE embarked on transforming the way buildings and spaces are used. The firm acquired the DBS Building Towers in 2010 for S$870.5 million and built a mixed-used development in its place, complete with a serviced residence and a shopping gallery with a tenant mix focusing on wellness and F&B concepts.
"We saw the potential to transform 6 Shenton Way into a mixed-use project in line with the government's plans to make Singapore a vibrant city for work, life and play," says Dr Riady.
Besides being innovative, Dr Riady believes that young entrepreneurs should seize opportunities in the Asean Economic Community (AEC) to expand their business.
"Any plant placed in a small pot has limited room to grow to its full potential unless you place it outside in a garden. The same holds true for business. Any good business model must be able to multiply or propagate," Dr Riady notes.
OPPORTUNITIES TO GROW
Singapore is a good base to start a business but the market alone is too small, he feels. But Asean is home to some of the world's biggest and fastest-growing economies, such as Indonesia, the Philippines and Vietnam.
"Just like a plant, you need to find room to grow and multiply your business model. The AEC provides a backyard for young entrepreneurs where they can multiply their business models and find opportunities to grow."
For instance, they can integrate their businesses in the regional supply and value chains. They can also use their experience within Asean to help their businesses achieve the scale, differentiation and efficiency to compete in the global marketplace.
OUE itself is definitely no stranger to expansion - not just geographically, but into markets outside of its core property business as well.
Last year, it launched a successful surprise takeover of International Healthway Corporation (IHC), now known as OUE Lippo Healthcare (OUELH).
Just last month, the group acquired Bowsprit, the manager of First Reit, Singapore's first healthcare real estate investment trust (Reit). It also bought a stake in First Reit.
"We see the business potential in the healthcare industry in the region, fuelled by three key factors: first, an ageing population, secondly, potential for higher government spending on healthcare and third, the gradual opening of the healthcare sector in the emerging markets in this region," says Dr Riady.
OUE's buying into First Reit brings the group one step closer to its end goal of creating an asset management platform composed of several diversified Reits.
According to Dr Riady, the Reits are a capital-efficient platform to recycle the firm's stable income-generating assets and unlock capital for higher-growth reinvestment opportunities. At the same time, they allow OUE to have a stable income stream from its ownership stake in the various Reits.
COPING WITH DISRUPTION
Moving forward, the biggest challenge for the group would be coping with the pace of change and disruption caused by new technologies and the digital revolution.
"In healthcare, for example, big data and artificial intelligence (AI) are transforming the treatment and delivery of medical care. Today, medical care is moving up the value chain," says Dr Riady.
He points out how big data is allowing for more personalised medical care through sophisticated healthcare analytics focused on preventive care, wearable devices and precision medicine.
AI is also transforming traditional clinical decision-making techniques by allowing clinicians to gain insights into diagnostics, care processes, treatment variability and patient outcomes, he adds.
"Fortunately for us, the property sector, especially prime property, is less impacted by disruption," says Dr Riady.
"Still, we need to anticipate what will be the new trends in the property sector caused by e-commerce, peer-to-peer networking, sharing economy and co-working office concepts. The challenge is to remain ahead of the curve and to anticipate these challenges before we are left behind."