Developing the Malay Reserved Lands is a challenge few would take up. The lands are protected under laws from ownership change, and to add to the challenge, they are mainly in rural locations with little infrastructure. Despite encouragement from the authorities, projects have stalled or abandoned. It is not surprising that big players in the property development shy away from the Malay Reserved Lands. But far-sighted Dato Louis Chai Ming Foo, Chairman of Upicon Group, saw it differently. There is an untapped demand for first-time home owners among the bumiputeras, and he figured a sustainable way to meet their need. Having started from a project of 50 single-storey houses in early 2000, the group has now completed 1,000 units, including semi-detached residences and is now a trusted name in the sector. Dato Louis Chai tells Top 10 of Malaysia about his experience and the values that he has imbued in Upicon to take it to the next level.
If one were to ask Dato Louis Chai who his greatest teacher is, he would not be giving out a name. He probably would not be saying that his greatest teacher is a person – he would say that hardship taught him the most. Hardship is no stranger to his life, but he took it so well that it honed his will and shaped him to be an entrepreneur.
Born into a farming household in Jeram, Perak, Chai is the second child of three siblings. Poverty was a fact of life then, and he is the only child in the family who managed to secure a place in the university.
“I was not gifted academically, yet I was offered a place in a university in Taiwan. I struggled mentally for a year before finally going, because I was too poor to even accept the offer,” Chai explains.
To earn some money for his studies, Chai left his hometown for Singapore, where he worked overtime in an electronics plant and earned about SGD10 plus a day. He pondered about taking a cheaper course to study locally and Singapore’s boom then also offered him a glimpse of better life without having to go to Taiwan. But he persuaded himself that leaving might lead him to greater heights. After a year, he saved up about RM3,000 and, with about RM5,000 more from his parents, he went to Taiwan.
“I could have stayed back in Singapore and rose to become a supervisor, but I wanted my life to be more than just that,” says Chai. “I was in my late teens, and I started thinking – to get out of poverty, one should go into business.”
As the money he brought to Taiwan barely covered his tuition fees, his struggle continued. His family couldn’t send him any money, and he was left to his own device to pay for his living expenses for five years. At first, he took on various odd jobs including washing toilets, disposing thrash and delivering newspapers. Later on, he ventured into direct selling.
“I travelled long distance by bus from Taipei to the central region to do direct selling over the weekends, while on weekdays during winter breaks I delivered newspapers on a motorbike,” says Chai. “Looking back, I didn’t know how I managed to juggle so many things. I accepted the situation full heartedly and had no complaint. I did what I had to in order to complete my studies,” he says.
Chai’s foray into direct selling would be his first taste in entrepreneurship. Direct selling was viewed negatively in Taiwan then, but against the odds, Chai thrived, so much so that he had RM7,000 to take home to Malaysia when graduated. But more importantly, he learned to overcome his shyness with people and learned to develop relationships, something he credits to opening many doors for him in his later work as developer.Chai started Upicon in 1997 in hard times, during the financial crisis while still holding a job at his father-in-law’s company. His father-in-law was in property development, and as a novice in the field, Chai was learning the trade by doing “everything from project management to distributing brochures”. He went into a joint venture to develop a large beach resort but it fizzled out because of his inexperience and the trouble that arose among the partners. But Chai, accustomed to setbacks in life, brushed off the episode and moved on.
“I was taken out of the project without any compensation, although I was entitled to a couple of million ringgit. But I moved on without a grudge. To me, there is no need to make a sour relationship worse.”
With the realization that he is not yet in the big players’ league, Chai looked somewhere else to start again. The neglected market of Malay Reserved Land made perfect sense for him.
“Most developers wanted only open titles projects. There were only about 3 players when I started, so there was little competition and the startup cost is low. To me a, it was good as it gets,” reveals Chai.
His first project was Taman Bentara in 2001 where he needed to build some 50 single-storey houses. His capital could cover only up to 60-70% of the whole project, but thanks to the good demand for his houses, he pushed through. By 2010 Upicon has earned the reputation for building sellout houses and it also gained credibility among financiers and house buyers. Upicon has expanded beyond Selangor and currently has projects in Pahang and Perak. The group has also ventured to do tourism projects.
“Sometimes we have to be a risk taker,” says Chai, referring to his going ahead with his early projects despite not having sufficient capital. “If I were to be absolutely sure before I make a move, I would never have progressed this far. We may not have enough capital but we made sure our houses sell. We made sure our houses are affordable to our potential buyers and now our houses in every project are almost always sold out.”
Landowners also benefited as Upicon grew. Previously owners of low value lands, they now became owners of assets worth millions of ringgit as houses built by Upicon on their lands rose in prices. Through word of mouth, others with Malay Reserve Lands have approached Chai to takeover abandoned projects and revive them.
“Some of them came to me in tears telling me about developers abandoning projects started on their land. We have taken over five such projects and managed to turn those around,” Chai says. “It is a very meaningful experience; the landowners came back to thank me and acknowledged Upicon’s contribution. To me that is the company’s most significant achievement.”
Secured further by the backing of investors attracted to Upicon’s credibility, Chai envisions the Group becoming like the big players and be public listed in 5 years. Chai also has a plan in the pipeline to build ‘smart homes’ – homes where the electrical components are linked up in an automated system and are controlled by tablets or phones. This is done to give more value to house buyers but at affordable prices.
Chai has already been contemplating on a succession plan for his business. In a few years’ time he will be setting up a trusteeship, relinquishing his share and allowing employees to take up to 30 percent of ownership of the company. He doesn’t believe in passing the baton to his family members. The best, regardless of background, is welcomed to lead to Upicon. Chai sees this as a good way to attract and retain talents – one of the keys to make the Group a lasting entity.
He practices a culture of partnership among the rank and file in his office. “We have a young workforce and I told my staff that they are part of a family called Upicon. Any difficulty is faced as a team, not just an individual’s responsibility. I want my staff to feel that they are in a secure place where they can grow. We have ISO standards so that they are clear about what is expected of them,” he says. However, Chai would require those who wish to be a part of the Upicon family to have undergone hardship. “It teaches one to be patient and persistent,” he says.
Chai is remarkably open minded. He may very well be the expert in the Malays Reserved Lands market, having tackled its many complexities from scratch and knows how to stay on top, yet he is willing to foster long-term partnerships with other developers to share Upicon’s expertise.
“Not many are willing to share their pies, especially if the pies are big. But I see it differently. I value entrepreneurship, not merely business. There is a difference between the two. Business is purely profit. Entrepreneurship is about partnership; to grow together in both good and bad times,” remarks Chai.
“Results comes from the how one manages the process. If you make perfect each stage in life that you are at, good results naturally comes. In Upicon, it translates into focusing on building trust, credibility and projects completed as perfectly as possible instead of just reaping big profits,” he says.
Chai admits that he can afford to be more relaxed now; in the weekends he spend time mostly with family members and sometimes, with friends playing badminton.
“Family is the ultimate root and the foundation of one’s life,” says the father of two daughters. “First, take good care of your family members; only then can you take on bigger dream.”