With his growing fortunes, gaming tycoon Chen is now striving to establish NagaCorp as a global hospitality brand within 18 years
By MARK RAO
When doctor turned businessman Tan Sri Dr Chen Lip Keong first arrived in Cambodia in the 80s, the scars of the Khmer Rouge genocide that killed close to two million people were still fresh and visible.
The country has had to endure the troubled transitions — from French colonial rule to a monarchy; then into a US-backed military government; and finally to the Khmer Rouge’s bloody reign under Pol Pot. It was not a good time for the 6.3 million Cambodians in 1980.
Ipoh-born Chen somehow found himself in Cambodia, along with many Malaysian businessmen, as part of Malaysia’s “Prosper Thy Neighbour” policy under former Prime Minister (PM) Tun Dr Mahathir Mohamad.
Malaysian captains of industries were then sent out to explore other developing countries and find ventures that could be mutually beneficial.
Little did Chen expect that he would find a crown jewel in a country that was still reeling from its past.
The RM11.8b Net Worth ‘Fisherman’
“I landed in Cambodia in the 80s under the leadership of former PM Dr Mahathir who encouraged business leaders such as myself to travel overseas to look for win-win situations, create a larger trading bloc and narrow the technological gap,” he told The Malaysian Reserve in Cambodia recently.
Chen said the original mission was to create opportunities for Malaysia and Cambodia, but things were bleak.
“Let’s just say, we did not have high expectations of finding any fish in the pond,” he said.
But then Chen really found his fish and reeled it in, when he set up NagaWorld in 1995 through NagaCorp Ltd, the Hong Kong-listed company that he founded.
Since then, NagaWorld has flourished to become the largest hotel and gaming operator in Cambodia today.
Located in Cambodian capital Phnom Penh, NagaWorld is sitting on a 70-year gaming licence which includes a monopoly that ensures Chen’s casino and resort is the only one within 200km of Phnom Penh in any direction.
With 600 gaming tables, 5,000 electronic gaming machines, 1,700 hotel rooms, 4,000 sq m of retail space and in-house theatres collectively sitting
2,950 persons, the NagaWorld casino located on 8.4 acres (3.4ha) of land cost US$1.5 billion (RM6.3 billion) to build.
The casino raked in US$531.6 million in revenue last year, which allowed NagaCorp to achieve a market capitalisation of US$3.52 billion.
While his business ventures in Malaysia have been less successful, namely the financially-ailing Karambunai Corp Bhd and Petaling Tin Bhd, Chen’s star — and the Malaysian flag — is riding high in Cambodia.
With his growing fortunes, Chen — who is Malaysia’s 11th richest Malaysian, according to Forbes — is now striving to establish NagaCorp as a global hospitality brand within 18 years.
The company is aiming to tap into the booming appetite of China’s newly rich for gambling, as well as a plan to expand to Russia in 2019.
If everything goes as planned, the company — which was the first gaming-related counter traded on the Hong Kong stock exchange in 2006 — could rival the bigger casinos in
Macau and Las Vegas.
How Prosperous is Thy Neighbour?
As of 2014, Cambodia remains a low income nation with a gross domestic product (GDP) worth US$16.71 billion spread across a population of 15.33 million people.
Last year, the Cambodian national GDP grew by an estimated 9.7% year-on-year to US$19.84 billion, as the country looks to the tourism industry to be among its key drivers towards economic and inclusive growth.
NagaCorp is believed to have contributed to a commendable 2.99% of GDP growth for that year, while making up a quarter of the country’s GDP in the tourism sector.
Today, the company is responsible for the development of over 7,000 employment opportunities in the hospitality, administrative, technical and financial fields.
While the NagaWorld casino and resort employs local Cambodians for the service side of the business, the majority of the management team comprises expatriates.
There is also no Cambodian sitting on the board or senior management team of NagaCorp, bringing to question just how inclusive the economic engine of the casino operator is.
Beyond the moral debates centred on the nature of gambling and the ethics behind profiting from it, the larger issue remains the ability of local Cambodians to be the drivers of their own future and economic wellbeing.
While NagaCorp’s contribution to the government’s revenue is sizeable — having reportedly paid US$4.1 million in taxes for the first half of this year — it is unclear just how much of this has spilt over to locals.
As the CEO of the company, Chen has continued to aspire to create a “first-world product in a third-world nation” to the benefit of the Cambodian nation and society at large.
Yet, cultivating a truly inclusive economy would entail the emergence of “third-world” occupants gaining access to, and have some degree of control, over these “first-world” products.