Telecommunication Industry In Malaysia

EXECUTIVE SUMMARY

IJM begun its operation in 1983 under the name of Solidates Sdn. Bhd and later in 1989 renamed as IJM Corporation Berhad taking the first alphabets of the merged three well-run construction companies - IGB Construction Sdn. Bhd, Jurutama Sdn. Bhd and Mudajaya Sdn. Bhd. Construction being the core business, IJM does involved in property development, industries, oil palm plantations and international ventures. In 1990s, IJM started to focus at the new emerging markets outside this country with low infrastructure levels that starting their economic reforms and opening up their market to international participants. Some of the countries that promisingly attracted IJM were China, India and Vietnam, which created huge opportunities for companies with strength and capacity to participate in international contracts.

Over the time, with an Independent Management team headed by its Chief Executive Officer, Dato' Krishnan Tan, IJM has evolved into a very institutional ownership profile with an excellent reputation for professionalism, performance and good governance. IJM is now well recognized as one of the few independent professionally run companies in Malaysia with an excellent track record for performance in both local and international markets.

For our group project purpose, we are focusing on IJM's international venture concentrating on its business operation and activities in India through its wholly owned subsidiary, IJM (India) Infrastructure Limited as it was known that IJM's venture in India has fruitful a significant return to the company. India provide a huge market with a population of over one billion people and an economy growing at over 7% per annum.

This paper will illustrate a few aspects of IJM's business ventures in India covering the reasons why IJM wants to extend its arms to abroad; the challenges faced by IJM in venturing into India due to the differences in socio-economic, political, legal and cultural factors; the proactive and reactive measures taken by IJM to overcome those challenges and finally the lessons one can learn from venturing in international business with referring to IJM's experiences in India.

1.0 OVERVIEW ON IJM

1.1 Company Background

IJM was formed on 16th July 1983 under the name of Solidstate Sdn. Bhd. and was subsequently re-launched as IJM Corporation Berhad then, later in 1989 after merging with three well-run construction companies - IGB Construction Sdn Bhd, Jurutama Sdn Bhd and Mudajaya Sdn Bhd in 1984 in a bid to compete more effectively against bigger foreign rivals who were making their presence strongly in the Malaysian market in the late 1970s and early 1980s. Besides its core business of construction, IJM is also involved in four other businesses, namely property development, industries, oil palm plantations and international ventures. In the early 1990s, IJM implemented a new strategy of looking at emerging markets with good growth potential for construction/infrastructure business. The intention was to engage markets with low infrastructure levels that were starting economic reforms and opening up to international participants to make a commitment to these markets and stay long term to ride on their growth.

Today, IJM is recognized as one of the few independent professionally run companies in Malaysia with an excellent track record for performance in both local and international markets. This is evident from the many awards conferred on the Company. In 1996, IJM was accorded internationally recognized ISO 9002 standard for "Provision of Construction Services in Building and Civil Engineering Works". Since then many of IJM's subsidiaries have been similarly certified. Moreover, the Construction Industry Development Board conferred on the Company the Malaysian International Contractor of the Year Award in 2000, the Malaysian Builder of the Year Award in 2001 and the Project Award (Major Building Category) in 2003. The Group's success in exporting its construction services abroad has not gone unnoticed. The Malaysian International Trade and Industry Ministry honoured the Company with its Excellence Award 2003 for Export of Services. To add feather to its cap, the Company was awarded the inaugural Malaysian Business Corporate Governance Award in 2002, and the KLSE Corporate Merit Award (Construction Sector) in 2002 and 2003. IJM has been able to grow by leaps and bounds over the past two decades by building on its core competencies, diversification being predominantly confined to related businesses and expanding into new markets.

Well capitalised and possessing an impressive track record, IJM has been very successful in the overseas infrastructure privatisation (Build-Operate-Transfer) schemes, investing in major infrastructure projects such as Guangdong Provincial Expressway in China, Western Access Tollway project in Argentina, Swarna and Rewa tolled highway projects in India, Binh An Water Corporation Limited water treatment plant in Vietnam and others.

IJM went public in 1986 with a market capitalization of RM66 million, total assets of RM172 million and a local business. Today, the Company has the distinction of being one of the few companies listed on the Bursa Malaysia Securities Berhad (BMSB) that has shown steady growth, uninterrupted profitability and a very international business. As at 31 March 2005, the Group's market capitalization and total assets stood at RM2.20 billion and RM3.45 billion respectively. Over time, it has evolved into a very institutional ownership profile, and an independent management team with an excellent reputation for professionalism, performance and good governance.

1.2 Vision

IJM's vision is "to be an internationally competitive Malaysian builder of world class infrastructure and buildings".

1.3 Mission

The company's corporate mission is "to uphold the highest standards of performance in all their ventures with the Mark of Excellence".

1.4 Statement on Corporate Governance

The founders of this Group recognized that high standards of corporate governance are imperative to safeguard the interests of all stakeholders' and to enhance shareholders'