Genting Bhd. History
Kuala Lumpur 50250
Telephone: 60 3 2161 2288
Fax: 60 3 2161 5304
Incorporated: 1965 as Genting Highlands Sdn Behad
Sales: MYR 4.23 billion ($1.11 billion) (2003)
Stock Exchanges: Kuala Lumpur
NAIC: 551112 Offices of Other Holding Companies; 113210 Forest Nurseries and Gathering of Forest Products; 213112 Support Activities for Oil and Gas Field Exploration; 221122 Electric Power Distribution; 237210 Land Subdivision; 311225 Fats and Oils Refining and Blending; 322130 Paperboard Mills; 423430 Computer and Computer Peripheral Equipment and Software Merchant Wholesalers; 522291 Consumer Lending; 522298 All Other Non-Depository Credit Intermediation; 531110 Lessors of Residential Buildings and Dwellings; 531120 Lessors of Nonresidential Buildings (Except Miniwarehouses); 541511 Custom Computer Programming Services; 541512 Computer Systems Design Services; 541611 Administrative Management and General Management Consulting Services; 561110 Office Administrative Services; 561520 Tour Operators; 713120 Amusement Arcades; 713990 All Other Amusement and Recreation Industries; 721110 Hotels (Except Casino Hotels) and Motels
The Genting Group is well positioned to achieve greater growth and profitability. The Group will continue to develop and expand its core businesses and constantly review new business ventures and investment opportunities that will bring synergy to the existing businesses and enhance shareholder value.
- Fujian province, China, native Lim Goh Tong immigrates to Malaysia and later establishes successful engineering contracting business.
- Lim Goh Tong decides to build a tourist resort, called Genting Highlands, and begins constructing a roadway to the top of the Genting Sempah and Gunung Ulu Kali, near Kuala Lumpur; forms Genting Highlands Bhd.
- Company begins construction of first hotel and receives first and only casino license in Malaysia.
- Highlands Hotel opens for business; Genting Highlands Bhd goes public with listing on Kuala Lumpur exchange.
- Company launches Plantation division.
- Plantation division goes public as Asiatic Development Bhd.
- Company restructures as Genting Holdings, placing hospitality and leisure operations into new subsidiary, Resort World Bhd, which goes public that year.
- Five-year development plan is implemented, adding three new hotels as well as theme parks and other amenities to Genting Highlands resort site.
- Company launches Star Cruises, which becomes Asia-Pacific's leading casino cruise operator.
- Company diversifies with purchase of Sanyen Paper Mill complex, which also includes a 720 MW power plant, placed under Genting Sanyen Power Sdn Bhd.
- Genting enters oil and gas exploration market with purchase of 45 percent stake in British Gas' Muturi PSC in Irian Jaya, Indonesia.
- Paper mill moves into packaging with launch of corrugated packaging plant.
- Construction begins on new 6,300-room First World Hotel, at Genting Highlands, the world's largest hotel.
- Stake in Muturi PSC is sold to British Petroleum.
- Genting acquires equity interest in power plant in India as part of continued industrial and geographic diversification.
- Lim Goh Tong retires at the age of 86.
Genting Bhd. is one of Malaysia's most powerful corporate conglomerates and serves as a holding company for a variety of domestic and international businesses developed by Chinese-born tycoon Lim Goh Tong. Genting's most well-known holding is its majority control of publicly traded Resorts World Bhd, Tong's vehicle for the huge Genting Highlands Resort complex not far from Kuala Lumpur. That complex also features the world's largest hotel, First World Hotel, which will top 6,300 rooms upon completion and bring the total number of rooms in the resort, including staff accommodations, to more than 15,000. Genting's Hospitality and Leisure division is also its largest, and includes the Awana resorts hotel chain and a controlling stake in Star Cruises Ltd., the world's leading cruise ship operator. In addition to its Malaysia holdings, Genting has expanded its hospitality interests internationally through casino development and management agreements in Australia, the Philippines, and the Bahamas, as well as stakes in Canada's Pacific Lottery Corporation and the United Kingdom's London Clubs International. Related Genting holdings include its Plantation division's control of more than 63,000 hectares of oil palm and other plantation property. The company's Property division meanwhile owns a 6,800-acre plot of land in Kulai, which Genting has been developing through another publicly listed subsidiary, Asiatic Indahpura. Since the early 1990s, Genting has diversified its operations somewhat, including a move into Paper & Packaging through its majority ownership of the Genting Sanyen Paper Mill complex in Kuala Langat, one of Malaysia's largest paper producers. The company has also entered the power generation market through its control of Genting Sanyen Power Sdn Bhd, which operates the power plant at the group's Kuala Langat paper complex. Genting Sanyen Power also controls the Lanco Kondapalli gas-fired power plant in India. Genting's final division is its Oil & Gas division, with oil and gas exploration and recovery operations and interests in China and Indonesia. Lim Goh Tong, Malaysia's wealthiest businessman, retired as head of the company in early 2004 at the age of 86, and has been succeeded by son Lim Kok Thay. Genting's shares are listed on the Kuala Lumpur stock exchange. In 2003, the company posted sales revenues of MYR 4.2 billion ($1.1 billion).
Rags to Riches in the 1960s
A native of China's Fujian province, Lim Goh Tong, the fifth of seven children, was forced to leave school at the age of 16 after his father's death. Then, in 1937, Lim immigrated to Malaysia, taking with him a suitcase and the equivalent of just $175. Lim's initial journey to Malaysia ended soon after, however, when the Japanese occupation of the country--and a beating--sent him back to China. Yet, when Japan later occupied the Fujian province, Lim returned to Malaysia.
Steeled by these experiences, Lim set out to build a business empire in his new homeland. Marriage, to Lee Kim Hua, whose grandfather founded the Bangkok Bank, helped Lim establish strong connections with the region's expatriate Chinese community, and by the early 1950s, Lim had already built up a thriving business as an engineering contractor, as well as a plantation owner. Among Lim's most successful projects was the Kemumu Irrigation Scheme in Ketalan.
Lim's destiny was to change in the mid-1960s, however. In 1964, while working as a subcontractor for the Cameron hydroelectric plant, Lim visited the Cameron Highlands resort, which had long attracted British colonists seeking to escape the tropical heat of the Malaysian lowlands. Located far from Kuala Lumpur, the journey to Cameron was arduous and long. Yet the resort provided Lim with an inspiration: that of building a retirement retreat for himself and other Malaysians nearer to Kuala Lumpur.
Lim began scouting for a location for his project, settling on the mountain range between Genting Sempah and Gunung Ulu Kali, just 58 kilometers from Kuala Lumpur. Yet, arriving at the top of the mountain, some 1,800 meters above sea level, Lim quickly expanded his proposed project from a simple retirement retreat to a full-scale resort catering to the Malaysian tourist trade, and especially to the large Chinese community in the country.
Lim then learned that the young Malaysian government, led by Tunku Abdul Rahman, had been formulating its own plans to develop the Gunung Ulu Kali location, but lacked the financial and political stability to do so. Lim approached Rahman with his own idea, and received the go-ahead to proceed, on the condition that Lim himself build a road leading from Kuala Lumpur to the mountain top. Lim, backed both politically and financially by Haji Mohd Noah, as well as members of the increasingly wealthy Chinese community, established a new company, Genting Highlands Sdn Behad, in 1965.
Lim himself invested much of his savings, which he augmented by the sale of his 810-acre rubber plantation, in Segamat. With capital of MYR 2.5 million, Lim began petitioning the governments of Pahang and Selangor for the more than 6,000-hectare site spanning the two Malaysian provinces. Genting's acquisition of the freehold for the entire site was only completed in 1970.
In the meantime, Lim personally led the work on the construction of the 20-kilometer road leading to the site, originally slated to be completed over a six-year period. Lim also offered to install a telecommunications tower on the site that the government had planned to build lower down on the mountain. The government agreed, and promised a subsidy of MYR 900,000 if Lim built the road in three years instead of six.
Genting met that deadline, and by 1969 was ready to begin construction on the resort itself, starting with the Highlands Hotel. The company received a surprise boost from Prime Minister Rahman, who, during the cornerstone ceremony for the hotel, suggested that the government would be willing to grant Lim a license to open a casino at the resort. Lim soon after filed the petition for the license--the only casino license to be granted in the majority Muslim country. Lim also expanded the original 38-room hotel design to 200 rooms.
The Highlands Hotel opened in 1971 and proved an immediate success, attracting the Chinese community in Malaysia, but also--as the only casino in the region--from neighboring countries. Lim quickly expanded his concept for the resort, and received a five-year tax break from the government in order to invest in the resort's expansion. The development of the resort from a casino-focused hotel operation to a full-scale resort featuring tourist attractions and other family-oriented amenities also opened the site to Malaysia's Muslim population, who were barred from the resort's casino. In addition to the tax-break from the Malaysian government, Genting raised fresh investment capital through a listing on the Kuala Lumpur stock exchange in 1971.
Expanding Holdings in the 1980s
Lim's direct involvement in the construction and expansion of the Genting Highlands resort did not prevent him from extending Genting's business interests into other areas. One of the company's first expansion moves was the creation, in 1977, of a Plantation Division to oversee Genting's growing palm oil and other holdings. The Plantation Division was placed under a new company, Asiatic Development, which was listed on the Kuala Lumpur exchange in 1982. By 2000, Genting's plantation holdings would top 63,000 hectares.
Genting also developed other property and resort interests. The company later launched its own chain of resorts in Malaysia, starting with the Awana Genting highlands Golf & Country Resort, located at the original Genting site. The Awana brand was then extended to include the Awana Kijal Golf, Beach & Spa Resort, a beachfront site in Terengganu; and Awana Porto Malai on Langkawi Island.
Genting's expanding hospitality interests led the company to restructure in 1989. Genting itself was reestablished as a holding company, while its hospitality and leisure businesses, including the Genting Highlands resort, were transferred to a new company, Resorts World Bhd. The new subsidiary was then listed on the Kuala Lumpur exchange.
Resorts World immediately launched a new and ambitious five-year development program that helped transform the Genting Highlands site into one of the world's largest and most popular tourist destinations. Into the mid-1990s, the company spent more than MYR 2 billion adding three new hotels, as well as new attractions, including two new theme parks--one of which was built indoors. By the end of the decade, the resort already featured seven hotels with some 4,000 rooms. The company also began development of a new 17-kilometer roadway providing easier access from the northern side of the mountain, and built the Asian region's longest--and the world's fastest--Skyway monorail connecting Gohtong Jaya at the base of the mountain to the resort, at a total cost of MYR 128 million. In the early 2000s, Resorts World also became responsible for widening the original ten-kilometer road into a four-lane highway.
This latter project was completed in large part to ease the expected increase in traffic to come with Genting's most ambitious development project--that of the construction of the 6,300-room First World Hotel. Upon completion, the hotel, which featured its own indoor theme-park, was slated to become the world's largest hotel. The company began adding 4,000 new rooms for its staff accommodations, raising the projected total number of rooms on the resort site to 15,000.
Diversification for the New Century
Much of Genting's success was due to its monopoly position as the sole casino owner in Malaysia. The increasingly conservative mood of the Muslim population in the country made it unlikely that new challengers would appear in the domestic market. However, that same shift in religious sentiment raised the possibility that Genting's own license might one day be withdrawn. At the same time, Genting faced new competition elsewhere in the region, as a number of neighboring countries began authorizing the construction of casinos.
Genting took a multifaceted approach to confronting this situation. On the one hand, the company continued redeveloping the resort site itself away from its earlier emphasis on its casino operation to expand more broadly into the tourist and family entertainment market. Yet the company also began expanding its hospitality and leisure operations beyond its sole focus on the Genting Highlands resort.
One of the company's earliest diversification moves was the establishment of the Star Cruise line in 1993. The company began operating casino cruises in southeast Asia, building up a fleet of 18 ships with more than 23,000 beds. By the end of the decade, Star Cruise was already the Asia Pacific region's largest cruise operator. The acquisition of NCL Holdings and its Miami, Florida-based Norwegian Cruise Lines in 2000, helped position the company as one of the world's top three cruise line operators.
Genting also began expanding its hospitality operations into other markets, acquiring casino management and development contracts in such markets as Australia, the Bahamas, and the Philippines. The company also launched a new Property division, conducted through subsidiary Asiatic Indahpura, which began developing a 6,800-acre landsite in Kulai, Johor.
Genting increasingly sought to expand its international holdings, while at the same time seeking to buttress its reliance on the more volatile tourism market with an extension into other industries. This effort was led in large part by Lim's son, Lim Kok Thay. In 1994, the company launched a new Paper & Packaging division through the creation of Genting International Paper holdings Ltd. and the acquisition of the Sanyen paper mill in Kuala Langat, the country's largest brown grade paper manufacturer. In 1998, the company expanded that operation downstream, launching production of corrugated packaging. The new subsidiary was then renamed the Genting Sanyen Group.
As part of the Sanyen acquisition, the company also extended into the power generation market, taking over the paper site's 720 MW gas-fired power plant. This operation took on the name of Genting Sanyen Power, and in 1994 became Malaysia's first Independent Power Producer, launching production in 1996. Genting later turned to the international power generation market, acquiring an equity stake in the Lanco Kondapalli gas-fired plant in India in 2003.
In the meantime, Genting had ventured into the oil and gas exploration market. In 1996, the company bought a 45 percent stake in British Gas's Muturi exploration operations in Indonesia (sold to British Petroleum in 2001). Genting continued developing its oil and gas interests, however, which included the launch of the Enhanced Oil Recovery Project in China's Gulf of Bohai in 2000. In June 2004, another Genting subsidiary, Sanyen Oil and Gas Ltd., acquired the production sharing contract for the Anambas Block in West Natuna, Indonesia.
By then, Lim Goh Tong, who had been honored with the title Tan Sri in 1979, had already announced his decision to retire at the age of 86. At the beginning of 2004, leadership of Genting was passed to Lim Kok Thay. Inheriting the multibillion-dollar empire established by his father just 40 years before, the younger Lim promised to remain true to the values that had enabled Lim Goh Tong to build up one of Malaysia's--and the Asian region's--largest fortunes.
Discussing future plans with The Star, Lim Kok Thay stated: "My father's advice to me is to hold the group steady as she goes, rather than to rush headlong into any wild expansion programme. That's my intention too as we need to digest what we have already done." The younger Lim nonetheless pointed to a further internationalization of the group's operations in the future. Yet the company's hospitality and leisure component, including its iconic Genting Highlands resort complex, appeared certain to remain its largest and most emblematic division into the new century.
Principal Subsidiaries: Asiatic Development Berhad (54.9%); E-Genting Holdings Sdn Bhd; Genting Highlands Tours and Promotion Sdn Bhd; Genting Hotel & Resorts Management Sdn Bhd; Genting (Labuan) Limited; Genting Management and Consultancy Services Sdn Bhd; Genting Overseas Holdings Limited (Isle of Man); Resorts World Bhd (56.8%).
Principal Competitors: Sime Darby Berhad; PPB Group Berhad.
- Burton, John, "Genting Bets on the Benefits of Extending Its Global Reach," Financial Times, January 7, 2004, p. 29.
- "Gambling on a Dream," Malaysian Business, October 16, 2002.
- "Getting up High Where It Belongs," New Straits Times, March 21, 2004.
- Knipe, Michael, "Profits and Family Values," Times, March 31, 2004, p. 21.
- Ng, Pauline S.C., and Elaine Ang, "A Tribute to Tan Sri Lim Goh Tong," Star, January 1, 2004.
- Tan Sri Lim Goh Tong, My Dream, Kuala Lumpur: Genting Bhd., 2003.
Source: International Directory of Company Histories, Vol. 65. St. James Press, 2004.