Rags-to-riches stories are already very rare. It is even harder to blaze a new trail in an alien land. However, the Chearavanont family has made it over the past century through their hard work and belief in shared values.
The Chearavanont family, having built Charoen Pokphand Group (CP Group), Thailand’s largest company and one of the world’s largest conglomerates, was ranked by Forbes Asia in 2017 as Asia's fourth-wealthiest family with a net worth of US$36.6 billion.
Besides business, the Group is well-known among many Chinese through its joint cooperation with CCTV to produce Zhengda Variety Show, the Mainland’s first authentic variety-game show and longest-running entertainment TV show, first aired in 1990.
Starting from scratch, the first generation who founded the business, brothers Chia Ek Chor and Chia Siew Whooy, originally from Guangdong province in Southern China, immigrated to Thailand with only eight silver dollars in their pockets, as their hometown and seed shop in Shantou were destroyed by typhoon. They opened a small seed shop in Bangkok’s Chinatown in 1921, selling seeds imported from China to Thai farmers.
Getting through ups and downs, the Group developed into an agri-business empire with multi-assets in the last 98 years. Its total sales amounted to US$62 billion in 2018, representing a year-on-year growth of 13 percent, according to the Group.
Asked about the Thai conglomerate’s crystal ball of managing and inheriting business, Mr Michael Ross, Vice chairman of Charoen Pokphand Group, Co-chairman of CP’s Group Commercial Real Estate and Vice chairman of CP Lotus, as well as the son-in-law of the second generation Dhanin Chearavanont, Senior Chairman of CP Group, believes that it is the shared values of the Group that make the difference.
“The fruitful development of our Group and prosperous inheritance of family business cannot proceed without the values we always cherish and insist on, needless to mention the hard work,” he said.
Shared Values of the Group
The CP Group, according to Mr Ross, believes in “three-benefit-principle” which means the Group would, in the first place, assess if a potential business benefits both the local nation and people, and therefore their corporation, and would only take next step if it does.
Meanwhile, the Group not only bravely copes with changes, embraces innovation, and pursues speed with quality, but also upholds integrity and honesty, and always cuts through complexity with simple working procedure and decision-making process.
“When meeting with potential partners on business cooperation, we will firstly see if our values match,” he said, “and then will stick to the values and commitment against all odds, rather than beginning with tigerish energy but petering out towards the end.”
Easier said than done. So Mr Ross took Super Brand Mall project as a real example. He recalled that the Group’s real estate company had tough times when it initially set foot in Shanghai. The company developed the Mall, which turned out to be a major shopping centre in Shanghai, located in the prime area of Lujiazui Financial and Trade Zone, with a stunning view of Shanghai’s famous Bund. When the Mall opened in 2002, its initial occupancy rate only reached a terrifying 30 percent. “It was the persistence on commitment and long-term vision that led us to keep investing in the project with 100 million yuan each year in a row for five years until the situation improved,” he elaborated.
“There were outside interests in acquiring the project, but we chose to stand with the local government and partners, and afterwards it turned out to be a rewarding one,” he said, stressing that “if you want to pursue a long-term strategy, you need to think of others.”
Family Business with Diversified Sectors
Based on the values, Charoen Pokphand Group’s business expanded into eight major lines. Besides agribusiness and food, they also cover retail and distribution, e-commerce and digital business, telecommunication and media, property development, automotive and industrial, pharmaceutical, finance and investment.
The Group’s business strategy nowadays is to develop “the Kitchen of the World”, and it is focusing on improving the whole value chain internally and adopting a win-win cooperation approach externally, according to Mr Ross.
The Thai Group bought HSBC's entire stake in Ping An Insurance in 2012 for US$9.4 billion, and acquired a 20 percent stake in Chinese state-owned investment trust CITIC for HK$80.3 billion, together with Japanese trading giant Itochu in 2015.
Currently, the Group has been involving in Thailand 4.0, the country’s upgraded economic model, designed to promote and support innovation, creativity, research and development, higher technologies and green technologies. It is also taking part in the Eastern Economic Corridor development plan, with which Thailand plans to develop its eastern provinces into a leading ASEAN economic zone. CP Group and its strategic partners have formed a consortium and are bidding for the High-Speed Rail linking three major cities (Bangkok, Pattaya and Rayong) as part of the Belt and Road Project.
In the Group’s business map, their Mainland business makes up 30 to 40 percent of the Group’s total revenue, according to Mr Ross. The Group has investments in almost all provinces on the Mainland, except Tibet, and talking about Greater Bay Area, they are keeping a close eye on potential business in the healthcare and information technology sectors. “The initiative of Greater Bay Area is about establishing and strengthening partnerships among the nine cities and two special administrative regions within the area,” he added.
People Oriented
Mr Ross repeated the word “talent” many times during the interview and said given the shared values, they pay special attention to talents and only carry out business after they find the right talent.
The Group currently employs over 350,000 staff with investments worldwide across 22 countries, and exports products and services to over 140 countries in the Asia-Pacific, North America, Europe, Russia, Middle East and Africa.
Mr Ross said they have recently invested US$300 million in Thailand to establish the CP Leadership Institute for cultivating talent for the Group’s development in the next 100 years.
Being Role Model and Accompanying Runner
The management being real role models and each generation upholding the idea of unity and cooperation are other core reasons why the family business can flourish.
Mr Ross said their Senior Chairman, Dhanin Chearavanont, is 80 years old and is still working every day and always thinking about how to better develop the Group. During weekends, he would travel three hours to join sharing sessions by young talents at the CP Leadership Institute.
“Our management treat work as pleasure. They keep working and making responsible decisions to build foundation for the next generation,” he said.
“When the young generation start to work and we would encourage them to devote into a new industry to blaze a new trail. Our roles are just accompanying runners, rather than pacemakers,” he added.
Mr Ross’s Management Philosophy
Mr Ross has been working for the Group in several management roles for more than two decades, after obtaining work experience in the Regent Hotels & Resorts and the Hopewell Holdings Co. Ltd. He received higher education with a Master’s degree in Science from Salford University in 1992 and had since then attended an Executive Programme in the Kennedy School of Government from Harvard University in 2009. Learning is an ongoing process to improve oneself and abiding to this philosophy, he was invited by the Tsinghua University to enrol as a Tsinghua SEM Entrepreneur Fellow.
In regard to his own management philosophy, Mr Ross thinks highly of moral character while hiring people and prefers to build platform for capable talent to perform, and would trust the person in position.
Mr Ross encourages young people to start their own business but the business should have key differentiation and he believes that the ability to manage people and create meaningful outcome out of nothing is essential. He also stressed that it is vital for entrepreneurs to be broad-minded and understand sharing, and entrepreneurs should possess outstanding adversity quotient, emotional quotient and intelligence quotient.
In line with the Group’s values on social responsibility, Mr Ross is also actively serving the society and the business community in the following capacity: Member of the Chinese People’s Political Consultative Conference (CPPCC) Shanghai Pudong New Area Committee and Deputy Director of the Committee of Hong Kong, Macao, Taiwan and Overseas Chinese; Vice Chairman by Special Invitation of the China Hospitality Association; Honorary Chairman of Hong Kong Chamber of Commerce in China; Chairman of ICSC (International Council of Shopping Centers) Asia-Pacific Advisory Board; Vice Chairman of the Shanghai Council of Shopping Centers.
In 2017, Mr Ross was awarded the Magnolia Silver Award by the Shanghai Municipal People’s Government for his long-term contributions to the city over the last 20 years. In terms of how to balance work and life, he said “usually people spend eight hours on working, 12 hours on sleeping and would have four hours spare time. Knowing how to manage the four hours is important.” Mr Ross loves food and wine. In his own words, it is the influence on him as a graduate from Hong Kong Polytechnic (now The Hong Kong Polytechnic University) with a Higher Diploma in Institutional Management and Catering Studies which was formerly under the Division of Business and Management Studies in the 1980s.
