This article first appeared in The Edge Malaysia Weekly on June 5, 2017 - June 11, 2017

TAN Sri Robert Tan Hua Choon is widely known as the “Casio King” — he is the first and only distributor in the country of the brand’s watches and calculators. But many would not know that the elusive tycoon once went door to door persuading retailers to sell his products.

“In the early days, I personally took Casio watches to shopping malls and tried to sell them. It was not easy. I knocked [on] door [after] door and kept getting rejected,” recalls Tan, the chairman and non-executive director of Marco Holdings Bhd.

Marco distributes Casio watches, calculators, digital cameras and musical instruments — imported from Japan — in Malaysia. Tan is the single largest shareholder with 19.71% equity interest.

His history with the Casio brand goes back to 1970.

According to him, Marco’s business relationship with the Tokyo-based Casio Computer Co Ltd is built on trust and faith, and not a fixed contract with a stipulated timeframe.

“It’s an exclusive distributorship, but there is no specific time period and we don’t have to pay any fee. In fact, there is no need to renew a contract because we don’t have one,” he says.

But that trust wasn’t built overnight.

“When I was young, I had to visit [Casio] in Japan seven or eight times before they agreed to give me a small number of watches to sell. It’s not easy to convince the Japanese to give you a distributorship, and it’s even more difficult today because Casio has become such a well-known brand,” says Tan.

Marco’s management team still visits Casio regularly and both sides remain in constant communication.

When Tan started selling Casio watches and calculators 47 years ago, nobody had much confidence in Japanese products. The Japanese cars brougt into the country earlier were even jokingly referred to as “Milo cans”.

“Most people didn’t want to sell our products. They wanted to sell Swiss watches, not Japanese watches. So we had no choice but to work really, really hard to promote the Casio brand in Malaysia,” he recalls.

Fortunately, he managed to pique the public’s interest and get them interested in Casio watches as digital timepieces were not very common in those days.

“We were selling them at RM120 per piece, which was very expensive back then,” he says.

As for the perception issue, Japanese products became known for their quality instead of being objects of derision. Japanese cars won fans gradually for their quality and reliability and were no longer mocked as being “Milo cans”.

“Our prices have increased gradually over the years as the quality of Japanese products has improved substantially. Today, our products can be priced at more than RM10,000,” says Tan.

Marco’s 2016 annual report shows that  76% of its revenue of RM180.54 million was derived from timepieces, with the rest coming from calculators, digital cameras and musical keyboards.

“We have made a lot of money from this distributorship. If I remember correctly, we have never made a loss throughout the years,” Tan adds.

For the first quarter ended March 31, 2017 (1QFY2017), Marco saw its net profit grow 4.7% year on year to RM3.93 million, mainly on increased sales of timepieces and better margins derived from the sale of new models.

Tan acknowledges that there are many players in the market who want to get hold of the Casio distributorship, but he is confident Marco is more than capable of defending its turf.

“Casio has been evolving over the last four decades. From the first generation to the second generation, we have always maintained a very good business relationship with the Japanese. More importantly, we have been delivering good numbers,” he says.

Asked whether he sees any risk that Casio might terminate its distributorship with Marco, Tan replies, “It’s not to say that we are not worried at all. But if I were to worry, I would have been worrying every day for the past 40 years. We have to be cautious because any principal can terminate a distributorship ... you never know.”

But even if a competitor gets the distributorship, he points out that it would be difficult to build as strong a network as Marco’s. Today, the company has a nationwide distributorship network comprising about 2,300 dealers.

On future trends, Tan believes watches are not likely to be replaced by smartwatches as they are a fashion item and not worn just to keep time.

“Over the last 10 years, there has been a lot of concern that smart devices might replace watches. But it has been proven today that people will continue to wear watches. Young people still love Casio because we are selling fashion watches.”

Marco has been paying generous dividends to shareholders. For FY2016, its dividend per share was 0.5 sen, although this was lower than the 0.7 sen it paid out the year before.

Trading in Marco is illiquid. Last Thursday, it closed at 16 sen per share, giving it a market capitalisation of RM168.7 million.

Big name in small caps

Low-profile Tan Sri Robert Tan Hua Choon is a self-made tycoon who has been involved in a wide range of businesses, including manufacturing, marketing, banking, shipping, property development and trading.

Apart from being known as the “Casio king,” he is also called the small cap king because of the substantial stakes he has built up in small listed companies, including Marco Holdings Bhd, Jasa Kita Bhd, JKG Land Bhd, FCW Holdings Bhd, Goh Ban Huat Bhd (GBH), GPA Holdings Bhd and Computer Forms (M) Bhd.

He is currently the chairman of all these companies except for GPA and Computer Forms.

Tan, 76, came to the fore in 2009 when he undertook a surprise takeover of sanitary waremaker GBH, buying out the founding Goh family after a fierce shareholder tussle. He still owns a 63.83% stake in GBH.

The seasoned businessman was back in the limelight three years ago when he exited Malaysia Aica Bhd (Maica) and PDZ Holdings Bhd.

In early 2014, he sold his entire stake in Maica to Datuk Ter Leong Yap for RM33.39 million, paving the way for the wood product manufacturer to become a property developer, now known as Sunsuria Bhd.

Subsequently, Tan exited PDZ in April 2014, with Pelaburan MARA Bhd emerging as a substantial shareholder in the shipping agency and vessel operator.

Today, Tan still has 19.71% equity interest in Marco (distributor of Casio products), 40.33% in Jasa Kita (distributor of premium industrial tools), 25.35% in FCW (wholesaler of cosmetics, toiletries and pharmaceutical products), as well as 23.69% in GPA (manufacturer of automotive batteries).

He also has a 20.94% stake in property firm JKG Land, formerly known as Keladi Maju Bhd. The company has been involved in property development for more than three decades, building mainly residential units, offices and light industrial factories.

Tan surfaced last October in Computer Forms as a substantial shareholder with a 28.8% stake. The company prints and distributes computer, stock and specialised forms.

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