Who’s Who Interview with Marcus Maher
Marcus Maher: Aulon wine bar opened up in January and hasn’t looked back since. It has become a favorite watering hole for the ladies and gents of SWIC (Shenzhen Womens International Club), SACS (Shenzhen Arts and Culture Society) and the business people of Shenzhen and Shekou. Until Aulon opened, there was no place that business people could meet, greet and negotiate in a friendly but sophisticated environment. Many new contacts have been made in Aulon. The contacts resulted in new partnerships and companies being created. I’m not exactly sure what it is that specifically attracts our clientele; maybe it’s the beautiful leather armchairs and couches, the Persian rugs and the art on the walls ,or maybe it’s just the 5,000 bottles of wine scattered throughout the wine bar in shelving and racking encased in glass. I personally like the way the four levels allow multiple groups of a decent size to meet and have their own space.
In the second quarter, my fiancée Jacinta Lin and I opened two shops at the same time just down from the wine bar. On the first floor is a bamboo lifestyle products retail shop called “Bamboo Home” which sells clothing and bedding products made from bamboo. The anti-bacteria qualities combined with the silky-soft feel ensure it is highly competitive when compared to cotton. Bamboo is already becoming the new “cool material”. Cotton is devastating to the environment while bamboo is natural and a superior product at a similar price. Bamboo is the future. Upstairs we established a boutique design studio called “Zeta” which designs clothing for both men and women. As it turned out, there was a massive untapped market. The people of Shekou have been buying bespoke suits like crazy. It seems that the days of the infamous “polyester Luohu suits” are numbered; at least in Shekou anyway. The strength of the strategy is that both businesses have a retail and wholesale side so there are four revenue streams with costs being similar to that of a standard retail outlet. The secret of its success is since retail by itself is difficult, a combined retail/wholesale strategy becomes a must in these turbulent economic times.
When Jon Mayfield and I sold our semiconductor company, Chipchecker Co., Ltd. (www.chipchecker.com), to 1-Source Electronic Components Inc., they requested that Jon and I maintain a 10% shareholding. 1-Source also requested Jon to stay on as General Manager with me making myself available to provide strategic advice. Since then, the business has continued to grow from strength to strength. 1-Source’s President Rick Lodato, in conjunction with Jon Mayfield, have overseen the company doubling in size last year while competitors have withered away. Rick is now on the acquisition path, as there many suitable candidates in the USA, who were once industry leaders but are now suffering. Rick was smart to develop a China strategy through his acquisition of Chipchecker Co., Ltd., which meant he could grow while his competitors stagnated. It was also wise to keep Jon and I on board as that created stability during the transition period. Then he did the wisest thing of all: he let Jon run the business as he saw fit, using his “Old China hand” style to get things done. The future strategy is acquisition, merger and natural growth with the China side of the business expecting to double in size once again in 2010. During a business meeting recently Rick summed it all up quite well. He said, “In a struggling economy, building international partnerships is vital. We have been rather fortunate in this regard.”
In the third quarter of this year, Aulon Wine Co., Ltd (www.aulon.com) established an Australian based wine sourcing company, Australian Wine Expert Pty Ltd., which sources and exports Australian wine to China. So far, it has exported three containers of wine into China.
In the final quarter of this year, I sold my Thailand based property company, Southern Cross Property Co., Ltd. The result was acceptable considering how the worldwide property market has been hammered, although, on a side note, if it wasn’t for the appreciation of the Baht against the American dollar, I would have had to sell at a loss. The main lesson I learned from my Thailand property experience was that it is very difficult to manage properties from another country. I will not be doing it again in the future.
My Australian based business, Carbon Market Consultancy (www.carbonmarketconsultants.com),
has been growing steadily in the Pacific, Pakistan and Africa. We are currently negotiating to fund a US$900M gas flare capture enterprise in Nigeria which will mitigate nearly ¼ of Africa carbon emissions and sell carbon credits to major European companies. CMC is also close to finalizing several carbon mitigation projects in Pakistan including a 50 MW biomass fired electricity station.
Shenzhen Standard: Many companies have been affected by the global economic downturn. How difficult was it for you to continue creating and selling companies? What did you do to cope with the economic downturn? What lessons did you learn?
Marcus Maher: Warren Buffet said, “You only find out who is swimming naked when the tide goes out.” In the last decade, there were way too many companies that took on too much debt, grew too fast and made bad investment decisions. It was only a matter of time before the repercussions would be felt. My businesses avoided debt, grew naturally and ensured that each business had a strategy to deal with the impending economic downturn. All the businesses were run frugally, keeping all costs down while growing revenue and profits. What I have learned, is the importance of listening to the smartest people on the planet and not listening to supposed experts, politicians and talking heads on business channels. It still surprises me that more people don’t go to the book store and buy, then read books about Warren Buffet, Jim Rogers, Peter Schiff, Charlie Munger, George Soros, Robert Kiyosaki and Mark Faber just to name few. These business and investment Guru’s told everyone what the future was, well in advance of the current economic turmoil. They explained what was going to happen but no one seemed to care what they thought. A simple rule to life should be that when the smartest people on the planet are offering their opinion about the future, it’s wise to listen and factor in their advice with regard to your personal finance and business decisions.
Shenzhen Standard: Is the business environment improving for you? What projects or new businesses are you working on right now? Is it becoming easier than it was earlier this year?
Marcus Maher: There is no better place to be in the world than Shenzhen especially during these turbulent economic times. Surrounded by Hong Kong, Macau, Zhuhai, Chungshan, Jiangmen, Guangzhou, Foshan, Donguan and Shantou, we are essentially the heart of a super city of 70-100 million people depending on whose population statistics you use. The idea that the Pearl River Delta is probably double to triple the size of Sydney, with double-digit migrant population growth and a not too distant future population of a 100 million people, is actually quite staggering. The Pearl River Delta and in particular Shenzhen have a fantastic future ahead. As a whole, it will continue to grow faster than anywhere else on the planet in 2010. As many of my companies are Shenzhen based, they will continue to do well in 2010 as long as we keep doing the things right. Customers have always liked great service at great prices. As long as we can keep doing that, we will be fine.
I have several businesses in the incubation stage at the moment. My favorite business is a VIP gym business for the rich, famous and beautiful of Shenzhen. The two drivers for this business are personal trainers John Graham and Josh Phillips. They are dedicated to turning less than perfect physical specimens into sculpted gods and goddesses. The strategy will be two-fold in that we will be establishing both fitness training studios and mega gyms. My favorite quote from John and Josh, which seems to sum up where we are going, is, “The Iron Gym is not just a Gym. It is an industry revolutionizing company.”
I have also been working with David Harris, Managing Director of www.FirstFinancialPr.com, in providing research and analysis for small to medium sized companies with a China focus. There are a lot of China based and focused companies not getting enough coverage since the financial downturn. First Financial works to provide investor relations and exposure for well managed and well positioned China focused companies. There is a publicly listed company in Hong Kong that I cover whose share price has increased in value by 106% over the last six months so those following my analysis on that stock have done well.
In conjunction with Australian based John Kelly, who is a bit of a legend in the Australian game meats industry, we will assist the Australian Kangaroo industry establish a ‘single desk’ to help market kangaroo meat into China. This venture is supported by the Australian government and it’s expected that the Australian Minster for Agriculture will launch it at World Expo in Shanghai.
Shenzhen Standard: What interesting changes have you seen or experienced in Shenzhen recently?
Marcus Maher: Anyone that has been in China for a while has seen massive change. We have all gone away for a short holiday and come back to find a brand new functioning business where previously it was a vacant space. However, changes in Coastal Rose Garden, Shekou is ridiculous even by China standards. There were about twenty businesses there in January 2009, when I opened the wine bar, with about 50 vacant retail spaces. Now almost every space has been occupied, which is massive growth even for China. When I opened the wine bar, there were only business such as the shops Tropicana and Andes Coffee Shop, Charlies Bar and restaurants like Roccoco and International Friend. Since then, Roccoco has refurbished themselves and renamed itself Rock; a Japanese-managed bar called Boogers opened next door; International Friend closed down and thenProvence restaurant opened in its place only to close down once again. Things changed even more down the other end of the street; Jordans, a Jordaninan-managed cocktail bar, opened next to Charlies bar with a sports bar called Cheers Bar and Hero Bar opening on the other side of Charlies Bar. Rumor has it that an Englishman will open an Irish pub a few shops down. This all occurred in the space of a year. Coastal Rose Garden now has a wine bar, five bars, two coffee shops, a restaurant, a western butcher shop, two shops selling foreign foods and one selling organic foreign foods. In a one year period, it has turned itself into the-go-to-place for expats looking for great service at great prices, provided in a great promenade style environment. Participating in this growth story has been an enlightening experience.
Shenzhen Standard: The year 2010 is rapidly approaching, do you have any plans, for the new year?
Marcus Maher: I will probably get married at the end of this year or early next year.My fiancee has several businesses and properties that I want to get my hands on. I will marry her to gain control of those assets in a friendly merger, so to speak. There is also the added benefit that she is quite attractive and has a great personality. What clinches the deal is that she can put up with me.
Shenzhen Standard: What hobbies or sports are you involved in?
Marcus Maher: The world economy has been experiencing interesting times so I have had to focus more on business rather than sports. However, I have been doing my best to make time for the mighty Shenzhen Dragons. I toured with them in Guangzhou and Thailand while also making most games in a Shenzhen, though I regrettably missed all our Hong Kong and Macau games due to clashes with business commitments. Our fearless leader Darragh Hudson, a.k.a. “Captain Jack Sparrow,” has led us well and we continue to improve with several victories over the evil Guangzhou Rams being the highlight of the year.
Marcus Maher can be contacted at email@example.com or visited at www.marcusmaher.com