To survive and thrive, Centurion Corporation has engineered a remarkable transformation, moving from producing optical disks to managing accommodation. Its CEO Kong Chee Min shares its story
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When Kong Chee Min joined Centurion as an accountant in 1996, it was a thriving company manufacturing optical disks for CDs and DVDs. It had listed on the Singapore Exchange Sesdaq just a year before, and would go on to list on the mainboard in 1998. Even as he quickly rose through the ranks to become its finance director and regional chief executive officer by 2011, however, the rise of the internet then was casting a shadow on its future. “We knew that the sector was going to sunset, and we needed to come up with a solution,” he shares. The firm’s controlling shareholder at the time had a small business operating accommodation for workers, and presented it as an option. “He wanted us to look at it and see if we could take over and scale it. When we studied its potential, we realised that we could take it global. That was the turning point for us.” |
In 2011, Centurion completed the reverse acquisition exercise and started its diversification into the worker accommodation business. At the same time, Kong was appointed as the firm’s chief executive officer to oversee its operations, strategies and long-term growth objectives.
He says: “We were beginning our journey to transform the company from just manufacturing to operating and managing another kind of business, in the real estate and service industry.”
“To steer a firm out of a sunset industry and reinvent the organisation, so that it not only survives but succeeds in a completely different business – I think this is a rare challenge few companies will ever face.”
| From optical disks to specialised accommodation |
From the outset of Centurion’s diversification, Kong knew it had to expand beyond Singapore. He explains: “While there are growth opportunities for workers’ accommodation in Singapore, these are quite limited because of the fact that land is scarce in the country. If we wanted to grow, we had to go overseas.”
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Stock price |
39 c |
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52-wk range |
32.5 – 46 c |
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PE |
4.3 |
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Market cap |
$332 m |
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52-week change |
16.4% |
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Shares outstanding |
840.8m |
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Dividend |
3.8% |
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Float |
293.5 m |
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P/B |
0.45 |
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Source: Yahoo! |
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It made its foray into Malaysia in 2012, and established its Westlite Accommodation brand there by opening dormitory properties for foreign and migrant workers. While the venture was successful from early on, the company was eager to do more.
In 2014, it diversified again, into student accommodation. “We were not doing something entirely different, so the risk was not very high,” Kong says. This lateral move enabled it to broaden its geographical footprint, into Australia, the United Kingdom, and eventually the United States.
Today, Centurion is one of the largest providers of workers’ accommodation in Singapore and Malaysia, operating 17 properties in the two countries. Its student accommodation portfolio, managed under its ‘dwell’ brand, spans 17 assets in Australia, the UK and US.
The decisions to diversify and globalise have paid off handsomely. Over the past 12 years, the firm has reported strong and sustained growth, with a 27 per cent compound annual growth rate (CAGR) in revenue and a 25 per cent CAGR in net profit.
“We are well-positioned as a multinational company with a presence in six countries, including our sales and marketing office in China. This gives our group stability and a wider scope for growth,” Kong observes.
He is also proud of how Centurion has set itself apart from other accommodation providers, by focusing on the welfare of those who live in its properties. “It’s not just about giving them a place to stay. Our residents are young students and migrant workers living away from their home countries or cities. They are in more vulnerable circumstances or stages of life.”
“We take great care to provide for their physical, mental and social well-being. This includes building a warm, caring and inclusive community at each property, with employees who not only have a passion to serve, but a passion to serve these particular groups of people. We also organise regular activities so residents can live, learn and play in a safe and secure environment.”
| Surviving the pandemic and strategising for the future |
While Centurion has laid a strong foundation for its future, it is not taking success for granted. The Covid-19 pandemic, in particular, was a sobering reminder of how business landscapes can change in an instant. “That period was difficult for us,” Kong says.
| “We are well-positioned as a multinational company with a presence in six countries, including our sales and marketing office in China. This gives our group stability and a wider scope for growth.” |
The firm not only complied with government regulations but took extra precautions and steps to keep residents and staff safe and boost their morale. It worked with supermarket, mini mart and canteen operators to ensure adequate food and necessities, provided free WiFi services in-room, and set up remittance service options within dormitories, among other measures.
In 2020, it also secured a bid to be among the first to manage quick build dormitories (QBDs) in Singapore, which pilot new specifications for migrant workers’ care and pandemic management. Centurion currently manages four QBDs.
Kong highlights: “During the pandemic years, the challenge was how to maintain our group’s performance and manage our different stakeholders and their expectations. We succeeded in doing both, and I’m happy with the result.”
Moving forward, the firm has several plans and targets. “One of our key initiatives is our asset-light strategy for portfolio and revenue growth. We recognised a number of years ago that it would be challenging to scale our asset portfolio on our own resources. In prudence, we don’t want to overload our balance sheet.”
“We therefore embarked on asset-light means to enlarge our portfolio of revenue-generating assets, by providing investment opportunities and management services to investors who are keen to tap into the specialised accommodation business.”
Centurion has also stepped up its environmental, social and governance efforts, including by piloting waste management programmes, rolling out Internet-of-Things devices and systems to track and manage its resource usage and emissions, and more.
“This is important to us, not just as a matter of compliance in some cases, but because we want to move towards carbon neutrality in the long term, as a responsible corporation in a global community.”
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It is also investing in digitalisation and automation, and training and incentive programmes to upskill and retain its workforce. The latter are especially close to Kong’s heart. He shares: “To transform the company from its former optical disk manufacturing business into the specialised accommodation business that it is today – we could not have done this without a visionary and committed team of board members, management and staff.” “Even now, after more than a decade, I am grateful and inspired that many of our talents stayed with us through the transformation, and reskilled themselves to contribute to the firm’s strong performance today. I want them to continue on this journey with us.” |
| About Centurion Corporation Limited |
Centurion Corporation Limited owns, develops and manages quality, purpose-built workers accommodation assets in Singapore and Malaysia, and student accommodation assets in Australia, the United Kingdom and the United States. The Group owns and manages a strong portfolio of 34 operational accommodation assets totalling approximately 66,628 beds as of 30 June 2023. Centurion’s established portfolio of workers accommodation assets are managed under the “Westlite Accommodation” brand and comprises nine workers accommodation assets in Singapore as well as eight workers accommodation assets in Malaysia. The Group’s student accommodation assets are managed under the “dwell” brand, with ten assets in the UK, five assets in US and two assets in Australia.
The company’s website is http://www.centurioncorp.com.sg
About kopi-C: the Company brew
This article was originally published in kopi-C, a regular column by SGX Research in collaboration with Beansprout (https://growbeansprout.com), a MAS-licensed investment advisory platform, that features C-level executives of leading companies listed on SGX. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. Written by Feng Zengkun.
