This is a man who knows the Jack Welch corporate growth model by heart. That is, if a company can't be tops in its field, sell it. K.S. Wong's interpretation, modified for the tiny city-state of Singapore: Identify companies that rank second or third and make them No.1 by merging them with bigger players. "General Electric is one of our benchmarks," says Wong, CEO and president of SembCorp Industries. "You have to be a certain size to survive."
To reach that goal, the 53-year-old Canadian-educated engineer has done a lot of pruning and rebuilding. It all started in 1998, when he was chairman of Nomura Securities in Singapore. The government needed someone to revive its ailing Sembawang Corp. The company had piled up losses by following government directives to expand out of its core ship-repair business and into ventures ranging from a delicatessen chain to an industrial park in China. The government tapped Wong to take Sembawang and merge it with a healthy Singapore Technologies Industrial Corp. (STIC), where Wong had earlier been president.
Wong lost no time trimming fat. He sold Sembawang's retail and food units and merged the rest with STIC, calling the new company SembCorp Industries. "Strategies are not things to be hung on the wall; they're meant to be executed," says Wong. The remaining ship-repair, construction, engineering, information technology, and logistics businesses are now among the most efficient in Asia. The revamped SembCorp exceeded government targets of 12% return on equity by 2%, and Wong's asset sales helped log profits of $215 million last year, compared with a $302 million loss in 1998. Wong meets with his five division heads individually once a month to measure their progress and hold them to their goals. "I take a helicopter view and let capable people run the show," he says.
His next step is to transform SembCorp into a multinational by merging remaining divisions such as marine engineering, which can dry-dock gargantuan oceangoing vessels, with foreign partners. And he's scouting for other partners to create a worldwide system on the Internet for supply-chain management. Wong's rapid progress is raising the bar for other Singapore companies--indeed, Semb- Corp is now one of the most profitable in the government's stable. "My benchmarks are global companies," says Wong. If he continues along this track, he may soon have one of his own.