QI MARKS ENTRY INTO MSIA WITH PJ HQ & STRATEGIC ACQUISITIONS

By Mikhail Raj Abdullah

PETALING JAYA (Malaysia), Aug 12 (Bernama) - Qi Group, the Hong Kong-based
global e-commerce company headed by entrepreneur Vijay Eswaran, is eyeing
strategically-located properties in Malaysia in the leisure, hospitality and
health-related industries including setting up affordable specialist hospitals
in what is seen as a homecoming for the self-made multi-millionaire.

This, together with the group's purchase of a RM60 million building in
Section 8 here as its regional headquarters and ambitious plans for the
Endau-Rompin resort, marks its commitment and entry into Malaysia in a big way.

The regional headquarters here would consolidate its operations in
Indonesia, Singapore, Thailand, the Philippines, he told Bernama in an interview
today.

Vijay, who has carved out a name for himself among renowned Hong Kong
financial circles more than a decade ago, said as a conglomerate with a global
reach, the group will continue to look for choice properties in Thailand,
Mauritius, Maldives and Kenya besides Malaysia to expand its leisure and
hospitality businesses.

Nevertheless, the current focus is on moving to Malaysia in a big way and
building up a track record with financial institutions.

"We could have purchased the HQ building outright ourselves from our funds.
But we went through the process of getting 60 per cent financing to build up our
financial credibility and rapport locally," he said.

Starting out in 1998 as an e-commerce outfit, the Qi Group has grown into a
multinational conglomerate with six key businesses -- telecommunications,
lifestyle and leisure, luxury and collectibles, training and conference
management, property development, and a global retail and direct sales business
-- with subsidiaries in 30 countries.

Vijay said the group's continuing and increased presence in Malaysia was
also underpinned by a firm belief in the country's economic potential and the
need to build up its local persona.

A massive venture Qi is undertaking in Malaysia is the Endau-Rompin resort
project in Pahang covering 200 acres (about 80 hectares) at a development cost
of US$250 million.

Grand plans are in store for the resort over the long-term which will
showcase a marina, mixed development, villas, a boutique hotel, as well as
cultural and heritage centre when it is operational in five years' time, he
said.

It was purchased for US$28.1 million (RM70 million) initially.

The group is also setting up five private specialist hospitals in the next
three years with an investment of RM18-RM20 million each providing affordable
medical services in various fields such as surgery, dermatology, emergency
operations, general clinic, etc.

But the catch here is that affordability would come about from the hospitals
being located outside urban centers such as Banting for which land has already
been acquired.

The four-storey hospital with 40-60 beds is expected to be fully operational
is two years' time. Other potential sites for such hospitals include Kluang and
Kuantan.

He said: "We are banking on the affordability of medical tourism in Malaysia
which is a powerful incentive to lure tourists as Malaysia is a lot cheaper than
Singapore. It fits into our tourism strategy."

Vijay also revealed that the company was working with the Pahang government
to rebuild Istana Pekan, which was a classic palace, built without a single nail
or cement being used, and sitting on the premises of the royal palace grounds.

"Malaysia is not playing up our culture and heritage as much as we should
like Bali and Thailand (and) more so with the distinctly different culture
between Pahang, Terengganu and Kelantan and the west coast," said Vijay.

Vijay, who hails from Terengganu, is passionate about spicing up the state's
culture and heritage with classical east coast Malay architecture which would
offer tourists from all over the world a secondary story and not just the usual
sun, sea and sand.

Once the resort is operational in five years' time which he describes as
more of a labour of love, the group also has plans to develop the legendary lake
of Tasik Chini, which would add on to the 100 million-year old Endau-Rompin
heritage forest area.

"We are going to preserve the mangrove swamp and backwaters on our property
and build cabins on stilts so that we can preserve the ecological balance of the
project," he said.

Asked on the returns from these investments, he said what was going to be
profitable was the resort itself which can be patronised by the group's captive
tourist market from its Vacation Club which has six million customers worldwide
in its database.

Already, the diversified company is bringing in a whole bunch of tourists
worldwide to Malaysia, Thailand, Bali and the Middle East.

To tap into that potential, the group was on the lookout for an urban hotel
in Kuala Lumpur which can be a stopover for them to spend a couple of days for
shopping and thereon choose to hop on to Endau-Rompin and Tasik Chini for a feel
of culture.

To this end, he said the group was negotiating with two hotels, "but we may
not acquire both. One is right down in Jalan Sultan Ismail in KL and another in
PJ, which is stone's throw away from Amcorp Mall" which houses Qi's current
operations.

"We are also eyeing resort properties in Mauritius, Kenya for safaris, and
an island in the Maldives to add to our expansion plans," he said.
In Thailand's island paradise of Koh Samui where it owns the Prana Resort,
he said the group was already building its second upscale hotel along the
island's Boh Put beach.

The groundbreaking for the second resort in Koh Samui is set for this month.
Vijay also revealed that the group "definitely has its eyes open for
properties in Sabah and Sarawak, probably an island off Sandakan as well as in
Balik Pulau in Penang."

As to whether there would be a cap to this process (of acquiring
properties), he said there was none as it's a matter of "finding the right
location and acquiring properties to meet our needs."

When asked on the funding needs against a backdrop of such ambitious plans
and acquisitions, he lamented that "it has been both our boon and bane."

Elaborating, he said that never needing to seek external funding was a boon
as funding from within the group makes life easier as everything was internal.

But it was a bane because "we have never been able to build up strong
financial relations with banks as a result of which they don't know who we are."

That is why "we are changing our strategy to negotiate with banks for loans
and hire purchase agreements rather than traditionally buying outright," he
said.

"The PJ headquarters has given us a good base as far as our credit
worthiness is concerned," said Vijay.

The company's employees have started moving into their new headquarters in
PJ8 here. It would initially house its financial, administrative, information
technology and backroom audit operations to be followed by other external
functions.

They include graphic works in Thailand, copyrighting (Philippines), call
centres (split between Philippines and Malaysia), legal as well as travel and
vacations (Singapore).

"Department by department is being consolidated because we are pretty far
and quite widespread and our staff here of over 400 people now from a mere 80
five years ago will support our global operations," he said, clearly reaffirming
that Qi is in Malaysia for the long haul.
-- BERNAMA