QL Resources Berhad

September 21, 2021

Dr Chia Song Kun (Dr SK Chia), 70, has come a long way from the days of collecting seashells with his siblings to supply to local feed millers. The Chia family lived in a fishing village in Kuala Selangor and seashells were plentiful. Collecting them was an arduous and back breaking task and transporting them to the feedmillers were no less a struggle but the family needed the extra income as there were many mouths to feed. Such shared experiences of growing up together in hardship have cemented the close bonds between the siblings.  

Today, all the top management of listed QL Resources Berhad are members of the immediate Chia family and their brothers-in-law. Dr. Chia Song Kun was the Group Managing Director of QL Resources Berhad since 3 January 2000 but was re-designated as the Executive Chairman on 1 April 2018. His brother, Chia Song Kooi, 60, took over the helm as Managing Director of QL Resources. In 2020 QL Resources celebrated its 20th anniversary as a public listed company. It has grown  from a company with a market capitalisation of RM100 million at its Initial Public Offering on 30 March 2000, to a corporation valued at about RM12.01 billion at the close of FY 2020.  

Dr SK Chia graduated with a Bachelor of Science (Honours) degree majoring in Mathematics from the University of Malaya in 1973 and obtained a master's in business administration in 1988 from the same university. He started his career as a tutor in University of Malaya and subsequently joined Universiti Teknologi MARA (UiTM) Shah Alam, Selangor as a Mathematics lecturer. He enjoyed teaching and he stayed with UiTM for 11 years until 1984. He left to set up CBG Holdings Sdn Bhd to commence the family business of distributing fishmeal and other feed-meal raw materials. The business grew and expanded into four key sectors – Marine Products Manufacturing, Integrated Livestock Farming, Oil Palm Activities and FamilyMart. (Read more below). 

For Financial Year ended 31 March 2020, QL posted revenues of RM4.15 billion while the profit after tax and minority interest was RM239 million.

QL Resources today 

QL are the initials of quan li (全 利) which means ‘Benefits for All’. The Chias believe that shared value creation is what sustains a business. There are 4 core businesses under QL Resources which are: 

Marine Products Manufacturing – QL Resources retained its lead in FY2020 as the largest surimi producer in Southeast Asia, as well as the largest manufacturer of surimi-based products, and halal fishbased products in Malaysia. It is also the biggest fishmeal producer in the country. QL’s regional footprint beyond Malaysia is in Indonesia and Vietnam. The business starts from source with deep sea fishing and aquaculture farming to the complementary processing of primary material into surimi, snacks, and fishmeal. QL also produces a plethora of seafood-based foods such as live cooked shrimps and a wide variety of fishballs for home kitchens and chefs in restaurants and popular snacks. In charting its expansion path to meet strong demands for its products from both overseas and local markets, QL has embarked on another phase of expansion of its Kulai plant in Johore which produces Figo-branded products. QL’s live frozen and cooked shrimp are widely accepted by overseas customers. In Sabah, a prawn aquaculture project is underway in Kota Belud as part of the medium-term strategy to further increase aquaculture production capacity to 5,000 metric tonnes per annum from the current 1,500 metric tonnes per annum in five years’ time. 

Integrated Livestock Farming – QL’s integrated livestock operations (ILF) operates along 4 sub-categories : animal feed raw material trade, commercial feed milling, layer farming, and broiler integration which produce eggs, broiler chickens, and Day-Old Chicks (DOCs). QL produced 5.8 million eggs per day and is a leading egg producer in Malaysia for FY2020.  At the same time, some 56 million DOCs and 22 million broilers rolled out from the farms. QL’s Indonesian unit achieved the target of outputting 800,000 eggs per day and construction work is underway to increase capacity to 1.4 million eggs per day in the next five years. The first phase of the expansion work is scheduled to complete in late FY2021. In Vietnam, QL aims to more than double production from 850,000 eggs per day to 1.8 million eggs per day. A new piece of land nearby was acquired to build a new farm for this purpose. The target is for this unit to collect 1.3 million eggs per day from the existing and new farms in FY2021. 

Palm Oil Activities – QL has over 16,000 hectares of land for oil palm, located in East Malaysia and Northern Kalimantan, of which about 10,000 hectares have been planted and 9,000 hectares of that is mature. The fresh fruit bunches (FFB) are sent to one of QL’s three mills in Sabah and Northern Kalimantan for immediate processing. The mills serve other small and medium holders as well. QL controlled Boilermech Holdings also complements its plantation and milling activities.

FamilyMart

In 2016 QL ventured downstream into the convenience retail chain store business when it signed a 20 year franchise with Japan based FamilyMart Co Ltd to develop and operate FamilyMart stores in Malaysia. FamilyMart is the world’s second largest convenience store chain after 7-Eleven. At the close of FY2020, there were 184 FamilyMart stores opened in Malaysia. QL said that they are on course to fulfil the initial target of 300 FamilyMart stores in 5 years (by 2022). FamilyMart is halal-certified and its Malaysian stores have become profitable after 2 years of operations.  

Family Management  

Dr SK Chia is the Executive Chairman of QL. Dr. Chia’s leadership has been recognised several organisations. In 2012, Dr. Chia was awarded the Ernst & Young Entrepreneur of the Year Award 2012 for Malaysia. In October 2018, Dr. Chia was awarded the Sin Chew Business Lifetime Excellence Achievement Award 2018. In September 2019, Dr. Chia won The Edge Billion Ringgit Club Value Creator: Outstanding CEO of Malaysia and QL Resources won The AsiaMoney Awards 2019 for Most Outstanding Company in Malaysia – Consumer Staples Sector. 

Chia Song Kooi, 60, is the Group Managing Director of QL since 1 April 2018. He is the brother of Dr SK Chia. Before that he was Deputy Managing Director after his return from Sabah where he was overall in charge of QL’s operations in Kota Kinabalu (1990-2016). He was also the Chairman of the Sabah Livestock Poultry Association (2012-2016). Chia Song Kooi holds a Bachelor of Agricultural Science degree from University Putra Malaysia (1985). He was working with the listed Ancom Group before joining the family business as Executive Director of QL Feedingstuffs Sdn. Bhd.  He comes to the Board with more than 20 years of experience in farm management and in trading of raw materials for farm use, as well as 10 years of experience in marine products processing. 

The Executive Directors of QL are : 

Chia Seong Pow, 64, is one of the founder members of the QL Group. He has more than 25 years of experience in the livestock and food industry covering layer farming, manufacturing, trading and shipping. Currently, he is mainly in charge of layer farming, regional merchanting trade in food grains as well as new business developments. He is the brother of Chia Seong Fatt and also a substantial shareholder of QL 

Chia Song Swa, 60, joined QL Feedstuffs Sdn Bhd in 1987. He is the brother of Dr SK Chia and Chia Song Kooi. He has vast experience in feed raw material distribution, he has helped the Company to establish a very strong distribution network 

Chia Lik Khai, 41, is the son of Dr. SK Chia. Prior to joining QL, he was with McKinsey & Company in Shanghai, where he was an affiliate of Global Energy & Materials and HighTech practice. He had also spent 8) years in the semiconductor industry with Agilent and Avago Technologies in Silicon Valley, USA. He graduated from the MBA program of Wharton Business School, University of Pennsylvania, United States where he focused on Entrepreneurship and Corporate Finance. He also received his Master of Science and Bachelor of Science in Electrical Engineering from University of Michigan, Ann Arbor, United States. Chia Lik Khai is also the Deputy Managing Director of Boilermech Holdings Berhad 

Chia Seong Fatt, 64, is the Director overseeing all farming operations in Sabah. He is the brother-in-law of Dr SK Chia and a substantial shareholder of QL with his brother, Chia Seong Pow.  Chia Seong Pow was the Managing Director of Sri Tawau Farming Sdn. Bhd., a company involved in layer farming, for 7 years. In 1991, he was appointed as Managing Director of QL Farms Sdn. Bhd., a subsidiary of QL overseeing its operations in Tawau. In January 1996, he was appointed as an Executive Director of QL Feedingstuffs Sdn. Bhd. in charge of layer farm and CPO milling operations. He obtained his B.Sc. Honours Degree in Chemistry from University of London in 1979. He practised as an industrial chemist for 3 years before he pursued further studies in University Malaya. In 1984, he graduated from University of Malaya with a Master degree in Business Administration. 

Two nephews of Dr Chia are Alternate Directors on the Board. Chia Mak Hooi, 55, is Alternate Director to ED Chia Song Swa and Cheah Juw Teck, 51, is Alternate Director to Dr SK Chia’s son, Chia Lik Khai.  

Substantial Shareholders of QL 

As at 30 July 2020, the substantial shareholders of QL Resources Berhad are :

  1. Dr Chia Song Kun and his spouse who are beneficially interested in 41.3% of the issued shares of the company via CBG (L) Foundation, the holding company of CBG (L) Pte.Ltd., Song Bak Holdings Sdn. Bhd., Ruby Technique Sdn. Bhd.,  
  2. Farsathy Holdings Sdn. Bhd. (11.57% ) whose beneficial shareholders are the two brothers-in-law of Dr SK Chia – Chia Seong Pow and Chia Seong Fatt (both Executive Directors of QL) 
  3. Employees Provident Fund Board  (7.96%)

Boilermech Holdings Berhad

Boilermech is another Main Board listed company controlled by Dr SK Chia where he beneficially owns 40% through QL Green Resources Sdn Bhd. His son, Chia Lik Khai, 41 is the Deputy Managing Director. The Managing Director of Boilermech, Leong Yew Cheong, is a co-founder of the company with the Chias. He is an engineer (University of Huddersfield, UK) with 40 years of experience in the boiler manufacturing industry and is also a substantial shareholder of Boilermech with a stake of 10.64%. Boilermech started in 2005 as a small designer and manufacturer of biomass boilers for the palm oil industry to generate steam or energy through the combustion of palm oil and other agricultural waste. The Group is now the largest biomass boilers manufacturer in South East Asia and its geographical customer base covers Malaysia, Indonesia, Thailand, Cambodia, Philippines, Papua New Guinea, Africa and South America. In 2016 and 2020 respectively, Boilermech ventured into the water treatment business by acquiring Teknologi Enviro-Kimia (M) Sdn Bhd (“TEK”) and solar energy business by acquiring Tera VA Sdn Bhd (“Tera”). 

For the Financial year ended 31 March 2020, Boilermech Group recorded a total revenue and profit before tax (“PBT”)of RM230.1 million and RM32.4 million respectively. The Bio-Energy segment being the core business, contributed significantly to the Group’s revenue and PBT, RM196.1 million (85%) and RM29.7 (92%) respectively.

ACKNOWLEDGEMESNT 

  1. The Edge Malaysia. 30 September 2019. The Edge Billion Ringgit Club 2019. Outstanding CEO of Malaysia: Dr Chia Song Kun. https://www.theedgemarkets.com/article/value-creator-outstanding-ceo-malaysia-dr-chia-song-kun-executive-chairman-ql-resources-bhd 
  2. QL Resources Berhad. Annual Report 2020. https://ql.listedcompany.com/misc/ar2020.pdf 
  3. INTI. 22 November 2019. https://newinti.edu.my/ql-resources-dr-chia-song-kun-conferred-honorary-doctorate-at-inti-convocation/ 
  4. The Star. 8 December 2003. https://www.thestar.com.my/business/business-news/2003/12/08/humility-in-a-corporate-world 
  5. Boilermech Holdings Berhad. Annual Report 2020. https://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=202597&name=EA_DS_ATTACHMENTS 
  6. The Star. 2 July 2017. The passing of an educationist. https://www.thestar.com.my/news/education/2017/07/02/the-passing-of-an-educationist#:~:text=INTI%20Education%20Holdings%20Sdn%20Bhd,force%20behind%20the%20private%20university
  7. FamilyMart Malaysia. www.familymart.com.my