From Shipwreck to Fintech: One Entrepreneur's Journey From Refugee To Business Mogul - Forbes Asia
Cambodia can be a hard sell, but Rithy Sear relishes the challenge. When he courts potential business partners from overseas, he listens to their worries about the small size of the market, the flourishing trade in smuggled goods, the corruption. And once they're done, he begins working tirelessly to reshape their opinions.
Sear's negotiating advantages are preparation and confidence. He usually doesn't meet investors in his office. That's a cluttered, temporary suite in the Phnom Penh headquarters of his Worldbridge International, his logistics, property and investment company. Instead, he chooses the exclusive business lounge on the 12th floor of the Sofitel Hotel, where the floor-to-ceiling windows lead your eyes to The Bridge, his gleaming 45-story hotel, retail and condominium complex that will be completed by the end of the year. That's where he'll present his argument.
Global security company Brink's got this treatment. It already was a customer of Sear's logistics company, transporting Tiffany & Co. jewelry to Cambodia. But Sear figured that Brink's could increase its local revenue eightfold if it worked with WorldBridge on offering more services in the country. When it hesitated, the hard-charging entrepreneur says he began a full-court press, flying to any Southeast Asian country that a Brink's executive happened to be visiting until it signed a joint-venture agreement in July.
Ever since Cambodia reopened to the outside world in the 1990s, Sear, 48, has built his businesses by seeing what the rest of the region was doing and then making connections with multinational players. He fashions himself as a gateway to the country--a "clean and clear" local partner easing foreign investors into a largely wide-open emerging market while coaxing the government into removing barriers to economic development. Partners in the region "trust me; my credibility is very important," he explains. "I never do a business trade in which anyone loses."
Forging The Path Into Cambodia
Singapore, in particular, has been an inspiration for Sear, and Singapore property-development group Oxley Holdings his biggest partner. The Oxley Worldbridge joint venture is building The Bridge and has already sold all of its condos. That persuaded Oxley's executive chairman and chief executive, Ching Chiat Kwong, to commit to building two more Phnom Penh projects. Next is The Peak, a $580 million complex of three 55-story towers that includes a 300-room Shangri-La hotel expected to be finished in 2020, and then The Palms, a $100 million luxury riverside community. Homes will start at $350,000, and this in a country where per capita gross national income is just above $1,000 a year.
At the Oxley WorldBridge showroom in central Phnom Penh, Sear seems to concede that he had to hire foreign design and construction firms because local companies aren't yet able to build 45- and 55-story towers. But he lauds the designs as his own ideas, declaring that the silver and gold skyscrapers of The Bridge and The Peak could blend into Singapore's skyline. For his part, Ching says he was surprised by the young, bustling population of Phnom Penh. He quickly signed on after meeting Sear, and now calls Cambodia one of his best-performing overseas investments.
The glitzy real estate developments grab lots of attention, but the foundation of WorldBridge is the logistics company, which Sear started as a delivery service in the 1990s and then expanded into import/export and outsourcing services. It boasts 3,750 employees, including some in Vietnam, Laos, Thailand and Myanmar, and lists more than 200 multinational customers.
Sear says he's a billionaire, and that well may be, but Forbes Asia cannot verify this. He bases that claim largely on the value of the 7.5 million square meters of land around the country that he says he's purchased over more than two decades, but he declines to provide property records. He also says he owns 100% of privately held WorldBridge, along with a 50% stake in Oxley Worldbridge and 40% of Kerry Worldbridge Logistics, a joint venture with Hong Kong's Kerry Logistics Network that provides logistics, freight forwarding and supply-chain support. He says his companies and joint ventures generated $1.3 billion in revenue last year, with the property business accounting for 60% of that. But he declines to provide net-profit figures and other financial results.
Corruption is seen as endemic in Cambodia--the country ranks near the bottom of the 180 countries on Transparency International's Corruption Perception Index--and it sours foreign investors' stomachs even faster than prahok, the country's traditional fermented fish. But Sear says he doesn't pay bribes to customs officers to move cargo or hide a shipment's contents, and customs officials and observers agree that he's clean. He instills confidence in customers by complying with the government's Best Traders Scheme, which promotes clean, prompt and inexpensive transfers of cargo at the borders. He is an oknha, a title given to anyone who's donated at least $500,000 to the government for public projects. It gives him access to Prime Minister Hun Sen, but he says he advises on entrepreneurial matters rather than lobby for particular policies. Cambodian tycoons often benefit from ties to the prime minister and his family, but there's no evidence that Sear's businesses have received any special favors.
Sear didn't become rich and successful without having an eye for a deal. When French antique dealer Beatrix Dayde Latham left Cambodia and a home filled with Ming Dynasty antiques, Sear bought it and all the antiques for just $2.65 million on the promise he'd preserve the lavish custom construction. But he doesn't stay in the museumlike villa because its southern-facing construction violates the principles of feng shui. He visits the property only to host and impress ambassadors, or fish from its prime location along the Mekong River.
Translating Amid Turmoil
Few tycoons grew up poorer or suffered more adversity than Sear. Born into a Chinese Khmer family in Phnom Penh, the third of five children, his family was forced to abandon their home and their auto-mechanic business in 1975 under the Khmer Rouge. They ended up in the regime's work camps, where families were made to grow rice. His mother's role as a cook in the camps allowed her to save morsels for her family, wrapped and submerged in the water tanks she carried at the end of the day.
Despite the cadres' slaughter of ethnic-Chinese citizens, everyone in Sear's family survived, but the hardships did not end with the regime's fall in 1978. With a gift for learning languages, Sear furtively picked up English from a Russian embassy worker, which was illegal under the country's then-Vietnamese control. But the skill was highly valued as the U.S. and UN began slipping support into Cambodia, so in 1988 his mother arranged his passage on a refugee boat to Australia so he could offer his services as a translator and seek aid.
The night before sailing, another ship, carrying 300 refugees, sank not far from Sihanoukville. As Sear's cramped fishing boat set out, with his uncle steering, dozens of bodies still bobbed in the waves, he remembers. Weeks later his boat also sank, crashing into a reef near Sumatra. Clinging to a wood plank, he floated for three or four hours until Indonesian authorities arrived, saving and then dumping the 171 surviving refugees in a fishing village in Kalimantan. His six months there still haunt him, but he recalls the small wonders he found during the ordeal, among them the coconut candies brought by missionaries from China and the large, lucid eyes of the mermaid he swears he saw. The refugees were eventually shuttled off to a UN camp in the Riau Islands, and he translated for the UN for three years before being offered passage back to his family in Phnom Penh.
At his riverside villa today, over bottles of Acqua Panna imported from Italy by his Auskhmer Import & Export, he looks back on his refugee voyage and explains how to survive on seawater: Mix one part toothpaste with two parts seawater and wait half an hour for the salt to settle at the bottom. This tonic will loosen the bowels, but after a leak in the supply of fresh water onboard, he says, it was better than nothing.
From Survival To Thriving
After the country's first election under the Transitional Authority in Cambodia in 1992, Sear leveraged his UN connections to make deliveries for embassies and aid agencies. He and his partners didn't have a truck, so they'd spend $200 of the $800 to $1,000 they charged to rent a vehicle. Sometimes they had to dodge rocket-propelled grenade fire and unexploded ordnance. When Circle Freight International pulled out of Cambodia in 1993, he says, it left him its remaining assets--a table, two typewriters and an empty balance sheet. But he was able to use its connections to build his business. With ration deliveries bringing him to the Thai border, he forged a friendship with the secretary of the chairman of Thailand's CTI Logistics, who later led him to a future partner, Kledchai Benjaathonsirikul of Kerry Express (Thailand).
Sear's profits grew, but he didn't trust the local banks, so he parked his earnings in land. He started buying land along Phnom Penh's Russian Federation Boulevard, which connected the city with the airport, because he saw developments springing up between other Southeast Asian cities and their airports. Land in a conflict zone was cheap, going for as little as 10 cents a square meter, so he bought a hectare or two each month. "I thought that since the UN spent $2 billion to make this country peaceful, it won't let Cambodia go back to that type of serious civil war again," he says.
Sear has been able to use his valuable land in Phnom Penh and six provinces to entice some of his foreign partners into joint ventures. The first two Oxley Worldbridge projects are rising on high-priced land in Phnom Penh's emerging business district, the Tonle Bassac neighborhood. The Kerry joint venture is developing a special economic zone on Sear's land along National Road 2 and is using tax breaks to attract foreign investors to develop light manufacturing. This month he's opening SME Eco Park, where Worldbridge will offer small and medium-size enterprises space and services to build their businesses. And his Worldbridge Homes is jumping into the affordable-housing market, selling 2,457 houses starting at $25,000 in a development that's expected to be completed in 2020.
Navigating The Shifts In Cambodia's Economy
Even with his Best Trader status and his oknha title, the bureaucracy can still stymie Sear. When Cambodian entrepreneurs rushed into e-commerce in 2015, Worldbridge Commerce launched an online shopping platform, My All In One Mall. In a partnership with Kerry Express, Sear pumped $17 million into the state-owned Cambodia Post to improve deliveries, hoping this would help his new business. But WorldBridge has suspended the platform until the government signs a long-awaited e-commerce law that would determine how to tax small orders by individuals.
If Sear is frustrated with the government's sluggish response to e-commerce and other innovations, he shrugs it off. For fast-paced advances he's optimistically looking to the technology-savvy college students working for his business-process-outsourcing company, or his 21-year-old son, who runs an online shop selling his dad's imports. (Sear also has a daughter, 17, who is studying to work in the tourism and hotel-management industries.)
Excited by the venture-capital boom in Southeast Asia, Sear launched his own fund, OOCTANE, in July. He hasn't decided on a direction for the fund beyond assisting early-stage ideas, though he has mentioned a preference for fintech investments. But the money is there: He committed $5 million and won't seek stakes in the startups until they prove viable, and he drummed up an additional $45 million from seven other investors.
Education and technical training in Cambodia may not be at the level of its neighbors', but Sear says he's eager to push any young person with a big idea. He makes a similar argument to the entrepreneurs who question whether an advanced logistics network can accelerate the development of a small market such as Cambodia. "If we lead companies across Cambodia, from Vietnam to Thailand and Thailand to Vietnam, what do we get? Job creation," he explains. "Cambodia is in the center of two big countries, so we have to know how to gain benefits from them."
This article was extracted from Forbes Asia.