Annual Report 2018 1968 The Johor State Economic Development Corporation (JSEDC) was established by the Government of Johor under Enactment No. 4, 1968 which was passed on 18 May 1968. On its first day, eight employees propelled JSEDC’s plans to enter the world of agriculture, housing and commerce. Ten years after its formation, JSEDC managed to build up a portfolio of properties valued at more than RM198 million in 1978. In this first decade, the corporation opened up a string of industrial zones located in Pasir 1978 Gudang, Tanjung Agas, Tongkang Pecah, Segamat, as well as the Senai Free Trade Zone which attracted a total of 325 entrepreneurs. JSEDC also owned 20 subsidiaries at this point in its development. After 20 years in operations, JSEDC now owned 77 companies with almost 12,000 employees. The Group also hit significant milestones with Group 1988 revenue surpassing the RM1 billion mark for the first time in 1988 with the Group’s assets in excess of RM1.11 billion. JSEDC took on a new name and it was rebranded as Johor Corporation (JCorp) in 1995. Moving into the third decade, JCorp could not avoid the global economic downturn which began in mid-1997. Nevertheless, JCorp managed to sustain the business in its entirety following its strategy of 1998 conducting its core businesses in US dollar. Drawing lessons from such a crisis, it demanded a reevaluation of the organisation’s structure, systems, strategies and governance. 2008 Pencapaian After 40 years in operations, JCorp’s achievements were extraordinary with its subsidiaries KFC Holdings (Malaysia) Berhad and Sindora Berhad which saw Jubli Emas their respective share prices reaching RM16 and experiencing a hike of 27 per cent (pc) on the Bursa JCorp Malaysia listing. Within the said time span, the JCorp’s Group machinery was shaped by 260 companies and driven by 55,000 robust workforce. 2018 AboutJohor Corporation Johor Corporation was established as a public enterprise and a statutory body with the passing of the Johor Corporation Enactment No. 4, 1968 (as amended under Enactment No. 5, 1995). As a state-owned conglomerate, Johor Corporation through its Group of Companies are involved in core businesses comprising Palm Oil (KULIM), Specialist Healthcare, Food & Restaurant Services, Property, Port Services, Hospitality, Intrapreneur, as well as Oil & Gas. MISSION A conglomerate contributing A catalyst harnessing Maintaining its position Contributing and improving to the state and national sustainable business growth as a competitive, profit the well-being of the economic growth through and subsequently achieving generating and highly community through business efficient and effective business success to discharge its regarded business entity success and corporate entities while upholding obligations as a state that leads & dominates the responsibility undertakings. community interests. entities investment corporation. market. while upholding community interests. VISION MEMBINA DAN MEMBELA JOHOR CORPORATION’S CORE VALUES 2.0 INTEGRITY PROFESSIONAL INNOVATIVE LOYAL TEAMWORK We execute our task We are committed We are knowledgeable, We execute our We work as a team, with trustworthiness, in executing our visionary, creative, dare responsibilities with contributing to achieve honesty and task efficiently to lead, responsive and dedication and a common goal and fairness, in line through professional resourceful in pursuit commitment towards shared vision. with the law knowledge and skills, of Johor Corporation’s Johor Corporation’s and corporate thereby providing Business Continuity mission and vision governance excellent service and Mission. while being resilient principles. quality product to and devoted to Johor our customers and Corporation. shareholders. CONTENTS OF REPORT SECTION 01 SECTION 03 SECTION 05 Corporate Statement Financial Highlights Corporate Governance Chairman’s Statement 2 Financial Review 26 Corporate Governance Statement 74 Corporate Statement 4 Summary of Johor Corporation’s & Statement on Risk Management Group’s Financial Performance & Internal Control 79 (2014-2018) 27 Board Governance & Business Ecosystem Committee Report 82 SECTION 02 SECTION 04 About Johor Corporation Prospects Corporate Profile & Information 11 Economic Review 28 SECTION 06 Business & Corporate Structure 12 Kulim Businesses 30 Financial Statements Board of Directors’ Profile 14 Specialist Healthcare Businesses 36 Board of Investment Committee 18 Food & Restaurant Services Business 40 Financial Statements 85 Board Governance & Property Division 46 Business Ecosystem Committee 19 Industrial Development Division 52 Board Tender & Business Development Division 58 Procurement Committee 19 Corporate Responsibility Division 60 Group Top Management Committee Group Human Capital Management Please scan the QR code for further information on specific topics. (TERAJU) 20 Division 66 Teraju Korporat Committee 22 Group ICT Advancement Division 70 Executive Committee (EXCO) 24 Our website: www.jcorp.com.my Section 01 Johor Corporation Annual Report 2018 CHAIRMAN’S STATEMENT DATO’ DR SAHRUDDIN BIN HAJI JAMAL Chief Minister of Johor Chairman of Johor Corporation Johor Corporation (JCorp) is now entering a new era in its corporate journey. This important instrument of development for the Johor State, has for five decades, proven its pivotal role in boosting the state’s economic standing. I would like to express my heartfelt congratulations to JCorp for achieving a significant milestone on 18 May 2018 - celebrating 50 years since it was established. This celebration was made even more notable with the launch of JCorp’s new logo which is symbolic of its determination to position itself on the domestic front or even in the international arena. This historic event became even more meaningful with the presence of His Majesty the Sultan of Johor, who graced the launch ceremony. 2 Section 01 Johor Corporation Annual Report 2018 Chairman’s Statement With its 50 years of experience, JCorp have shown determination and discipline in the corporate world. I am confident JCorp will be able to overcome challenges, guided by it’s Strategic Plan, supported with the strength of 60,000 employees. Anchored by the expertise and experience it has To that end, JCorp launched shop lots for target groups, continued with garnered thus far, I hope JCorp will continue to the Bumiputera Entrepreneur Development Programme in Johor’s Large- discharge its role as an instrument of development Scale Halal Broiler Chicken Industry Chain, with the aim of producing 80 for the state. This is evidenced by its many viable and Bumiputera chicken breeder entrepreneurs by the year 2023. sustainable businesses, while carrying out wide ranging and efficient corporate responsibility initiatives just as it JCorp has also been entrusted with the task of fostering the entrepreneurial had done, over 50 years ago. culture amongst the younger generation. The aim of elevating the Johor Corporation’s 50 Years of AchievementsBumiputera Entrepreneur Community was implemented via the Smart JCorp’s presence in the mainstream economy sees Entrepreneur Programme that was introduced in 1992. JCorp enhanced the institution’s participation in the most modern this programme in 2018 by adopting a more comprehensive method with sectors such as information technology, community the introduction of financial literacy programmes called Cilik Kewangan Pro broadband service, application development and Du-It and Kelas Rancangan Usahawan (KRU). The programmes positively assimilation of the latest technology into conventional impacted 2,500 students and this encouraged JCorp to further expand the economic activities. The New-Wave Wealth Generation programmes up to the national level in an effort to nurture the potential of project initiated by its fully-ownedKULIM special purposeBUSINESSES students in the fields of accounting and entrepreneurship. vehicle, N2W Corporation Sdn Bhd, is the right step forwardSPECIALIST in preparing and HEALTHCAREmarking JCorp’s entry BUSINESSES into a In the field of education, JCorp has continued to strengthen its three new era dictated by Industry 4.0, artificial intelligence institutions, KPJ Healthcare University College, Malaysian College of (AI) and augmented reality. Hospitality & Management, as well as the Johor Skills Development Centre. FOOD & RESTAURANT SERVICESOffering the latest relevant courses, these institutes are geared towards This report also contains details of JCorp, via its IndustrialBUSINESS cultivating and shaping skilled and professional human capital, including Development Division (IDD), successfully attracting Bumiputeras, keeping in line with the growth of new businesses and investments totaling RM11.17 billionPROPERTY to Johor’s industrial DIVISION industries. zone, creating more than 7,406 jobs. To ensure that JCorp continues to perform exceptionally and contributes to ThroughINDUSTRIAL IDD, JCorp was also DEVELOPMENT able to offer 1,031 hectares DIVISION the aspirations of the State of Johor, let us work as a united force to achieve of industrial land, particularly in the Pengerang Industrial the status of a high performing state to ensure the prosperity of the state, Park (PIP) and Tanjung Langsat Industrial Complex (TLIC), and ultimately, the well-being of Bangsa Johor. BUSINESS DEVELOPMENT DIVISION to investors in the oil and gas (O&G) downstream sector and those in the heavy and bulk cargo industry. This initiativeCORPORATE is in tandem with RESPONSIBILITY the government’s aspiration DIVISION