In the era of high capitalism with mergers and acquisitions and all types of corporate restructuring done in the name of profit, Hai-O Enterprise Bhd is a rare breed that stands out with its “socialist” creed.
Some people even called its founder and managing director Tan Kai Hee the “red entrepreneur”, party for his close ties with the People’s Republic of China, but mostly for his left-wing political conviction.
“I’ve never been ashamed to declare myself a socialist,”Tan, who is approaching 70 years of age, told FinancialDaily in an interview recently.
Instead of viewing socialism as “anti-business”, he believed socialists could become better businessman than capitalists, as the former cared not only for their own selfish interests, but for the welfare of others.
“Business does not contradict socialism. Even (Communist) China does business. There is (more) fairness in socialism than capitalism in business,” he said, adding that socialism requires the rich to help the poor and stands for social justice. Following this philosophy, Tan said Hai-O would consistently set aside half of its net profit as dividends for its shareholders, while retaining the other half to be re-invested in the company.
Due to his political conviction, Tan, who was a leader in the now-defunct Labour Party, spent eight years and one month of his youth in detention under the Internal Security Act(ISA) from 1965 to 1973.
“Those were my golden years, from the age of 29 to 37. They are the best years of one’s life.”
However, Tan neither regretted his time in detention nor hated anyone for what he had endured. “I accepted it(the detention ), so I can get on with life and feel more at peace,”he said.
Describing himself as an optimist, Tan said he 1would instead be thinking of ways to overcome difficult situations when they arise. “It is a struggle throughout my life but I survived,”he added.
This is the same vigour that Tan brought into his business.
Leveraging on the newly established diplomatic relationship between Malaysia and China, he set up Hai-O in 1975 following his release from prison to import Chinese products for sale in Malaysia. The company grew and was listed on Bursa Malaysia’s second board in 1996.
Hai-O, which sells mostly Chinese medicines and tea products, started to come under fund managers’radar screen following successive years of steady profit.
Its net profit rose 23.6% to RM9.9 million in its financial year ended April 30, 2006 from RM5.5 million previously, while its revenue increased to RM144.3 million from RM139.3 million.
Now, the company is moving into its next phase of growth with plans to transfer its listing status to the Main Board sometime next year. Hai-O is also banking on “pu-er”tea trading.
Tan believed that the tea, which originates from the southern China province of Yunnan, would have a huge market potential in Malaysia. Unlike other types of Chinese tea, pu-er has no expiry date, and becomes more valuable as it matures.
by Kevin Tan
(The Sun, January 3, 2007)