Monday 22 Apr 2024
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This article first appeared in The Edge Malaysia Weekly on November 20, 2023 - November 26, 2023

LOW-profile tycoon Tan Sri David Law Tien Seng, better known as T S Law, certainly has a colourful background. About two decades ago, he faced challenges that led him to relocate to Australia, where he was fortunate enough to have amassed considerable wealth through his mining ventures.

In 2010, Law regained his appetite for Malaysian assets and brought home the fortune accumulated abroad. The savvy tycoon strategically reinvested his money, laying the foundation for a robust business empire that now spans steel, mining and property.

Today, Law is executive chairman of TS Law Group and executive deputy chairman of Main Market-listed Hiap Teck Venture Bhd. The following are excerpts from The Edge’s exclusive interview with him at TSLAW Tower:

 

The Edge: It has been five years since we last had a sit-down interview in 2018. How have things been with you and your businesses?

Tan Sri David Law Tien Seng: Despite the Covid-19 pandemic over the past three years, I would like to think that we have been doing pretty well. If you look at our steel businesses under Hiap Teck, our [27.3%-owned steel slabs and billets producer] Eastern Steel Sdn Bhd has expanded its steelmaking capacity from 700,000 tonnes previously to 2.7 million tonnes currently, while our [wholly-owned scaffolding and formwork products manufacturer] Huatraco Scaffold Sdn Bhd has also been expanding its product portfolio by collaborating with our German partner. Meanwhile, for our property business, we successfully launched two projects —Skyline KL, Pudu, and Skyline Kuchai [Kuala Lumpur] — over the past two years. As for our mining businesses in Australia, we have started the extraction of iron ore and the prices have been favourable to us. Last year, we also moved our headquarters from Kuchai Lama to the new TSLAW Tower here [Jalan Kamuning, Imbi], which is next to the Tun Razak Exchange (TRX). Overall, it has been a rewarding five years for us.

TS Law Group owns about 10 acres of prime land in the TRX area (Jln Kamuning, Jln Inai and Jln Kampung). Meanwhile, you are also buying a 26-acre plot in Kuchai Lama from Ajinomoto (Malaysia) Bhd for RM408 million. You seem to have a special connection with these two areas.

I have always been keen to invest in land and real estate. I like to buy land and keep it for years. Just like this piece of land (in Jalan Kamuning, off Jalan Imbi) here, where our new HQ is; I bought it about 30 years ago. At that time, this place was all bungalow lots and it was my old office before we moved to Kuchai Lama. Back then, the land was valued at merely RM200 psf. Today, we are back here, and it is worth at least RM2,000 psf.

The same goes for our Skyline Kuchai land; I bought it more than 30 years ago and we used to operate a Chinese restaurant there. These investments have proven to be very rewarding. So, yes, I am very familiar with these two areas.

Why do you like the Ajinomoto land?

Coincidentally, the Ajinomoto land is located just beside Skyline Kuchai, and it is very near to our previous HQ. In fact, we had been eyeing this piece of land more than 10 years ago. We wrote to Ajinomoto, but they were not interested in selling. About two to three years ago, we contacted them again when we found out that they were planning to relocate to Seremban. They insisted that they were not selling it. Eventually, they called for a tender and we quickly put in our bid. So, yes, we have a special feeling for this area and this land. You probably won’t find another 26-acre plot in the city centre — and it is also near the Kuchai MRT station.

Moving on to the steel industry, are you not worried about the overcapacity?

Today, most Malaysian players, including the five to six major steel companies, are producing long products. Eastern Steel is one of the very few players that make flat products using blast furnace plants. This is our niche. It is capital-intensive to produce hot rolled coils (HRCs) and, in fact, money is not the only factor here. You also need to have a strong partner, human talent and good technology. I will be the first to admit that, without Shanxi Jianlong Industry Co Ltd, I would not even consider making HRC because I would be losing a lot of money.

Can these long product players switch to flat products?

Yes, of course they could. But the question is, does it make sense for them to do so? If Eastern Steel has yet to start the HRC project, perhaps they could try. But now that we are ready to supply 2.7 million tonnes of HRC, will it be too late for them? Bear in mind that they need to invest billions by venturing into HRC. Who would want to take the gamble? The way I see it, it’s not impossible, but it’s very hard for them to replicate what we do.

So, in the flat steel space, you’re very confident?

Yes, we are not worried at all, at least in the Malaysian market; we are very confident. But, of course, outside Malaysia, we need to compete with Thailand, Vietnam, Indonesia, Japan and South Korea. We will be producing 2.7 million tonnes of HRC, of which two million tonnes are to serve the Malaysian market. Statistically speaking, Malaysia has been importing two million tonnes of HRC a year. That’s a very safe number for us. As for the balance of 700,000 tonnes, there is room for us to adjust accordingly, whether to sell HRC, slab or billet.

Today, TS Law Group controls three Austra­lian-listed mining companies: 15% in iron ore miner GWR Group Ltd; 10% in tungsten miner Tungsten Mining NL; and 11.2% in gold miner Western Gold Resources Ltd. Any interesting update on your mining businesses in Australia?

GWR’s extraction works have started. It is not very profitable at the moment because it is just a small mining site. Our next focus will be tungsten, whose prices are quite good. We are still in the planning stage, but we hope to commence extractions next year.

Why go into tungsten mining?

Tungsten is a rare metal. It has wide applications for various industries. I feel that iron ore mining is very common and this space is quite crowded. I’m very familiar with Australia, as I have had a business presence there over the last 20 years. But, now, I want to try something different, like tungsten.

Why do you like mining?

Mining, by definition, is extracting useful minerals from the surface of the earth. For every tonne you extract, there will be one less tonne of minerals in the earth. It takes millions of years for a mineral to form. Over the long run, I always believe mining is a business that has good potential, provided you manage it well. Once you find a good mining site, you dig deeper, you will continue to mine fortune in the next 15, 20 or maybe even 50 years, and you don’t have to search for another new mining site.

How do you choose the mining site?

In the mining business, luck plays a large role in the success. What we usually do is to acquire mining sites with rich history. Every mining site has its own history. We keep track of their history, whether they have been mined by the [indigenous people] or the Japanese. The [indigenous people] have been mining for centuries using their hands and shovels. Without the help of technology, they knew where the good mining sites were. These were amazing works. But, unfortunately, without the proper high-end equipment, they could not dig deeper. So, we like to go to these places to continue their unfinished business.

But don’t you think this is a high-risk business?

Yes, but it’s not like everything is beyond our control. When we see an opportunity, we try. Sometimes, we fail; sometimes, we give up; sometimes, we have to prepare to lose some money. But the satisfying part is that once you discover the mineral in a mine, the more money you pour in to explore and extract, the more money you would make in return. Sometimes, you might give up, not knowing that you are actually very close to striking a gold mine. So, mining is also about luck. What is within our control is to make sure that we have a good and experienced exploration team. If the experts say there is mineral, then we just keep trying.

You sound very passionate about the mining business.

Mining will always have a special place in my heart because we were very successful when we bought into Australian iron ore miner Midwest Corp Ltd in 2003. Five years later, we reached the peak of the commodity boom in 2008. Prices were crazy, we were lucky and we made a fortune.

Given the ongoing tension between the US and China, rising interest rates and inflationary pressure, as well as the wars in Ukraine and the Middle East, what’s your view on the global economic outlook in the next five to 10 years?

We are not a multinational corporation with a business presence in different parts of the world. We are just a local steel company with a Chinese partner. We have some mining companies in Australia and we are just a boutique property developer in Malaysia. I don’t think I am in a position to analyse these macroeconomic issues.

What I do know is that we need to be conservative, and we need to take one step at a time. We have to act according to our capability and live within our means. We should not take on more weight than we are capable of. We do not want to torture ourselves.

For example, if you look at our property projects, we focus on only a few major projects. After the Skyline series, we will be focusing on the TRX area and the Ajinomoto land. We want to build our brand before we take on more projects. We focus only on what we do best. We do not go all out and fight for everything. We fight only the battle that we think we could win.

What is your ultimate goal and big dream for your business empire?

I couldn’t be more satisfied with what I have today. [Where] our businesses are heading in the future, I will leave it to the next generation. Again, my only advice to them is to take one step at a time. Don’t be impatient. Take a look at the crises in 1998 and 2008; so many companies ran into trouble. I hope our businesses can continue to grow in a slow and steady manner. We don’t have to grow too fast. I am happy with our pace currently.

What is your succession plan?

I am 70 years old. I have four children — two sons and two daughters. Wai Cheong, my second child, is focused on the property business. Wai Ho, my youngest child, is focused on the steel business. I will give them a free hand to unleash their potential. They share their work and help each other. My daughters are not in our businesses; they prefer to pursue their own dreams.

So, you’re very happy with what you have achieved already?

I started from scratch. I think God has been very kind to me. I am very grateful.

But do you hope Wai Cheong and Wai Ho could bring TS Law Group to the next level?

I think if they could maintain and sustain our levels, I would be very happy already. But, of course, if they have the confidence and ability to push further, I will definitely support them. Again, my advice is, don’t run too fast. We don’t want to be penny wise and pound foolish. In business, it’s very important to grow step by step. 

 

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