Group Assignment - Module 11 (3) 2-7-2014

EMBA Module 11 Assignment

RIMBUNAN HIJAU GROUP

RimbunanHijau Group (RH Group) is one of Malaysia’s largest multi-industry companies.

Founded in 1975, RH Group is the realization of Chairman and Managing Director, Tan Sri

DatukTiongHiew King’s sheer determination to work towards a better future for this family,

his employees and his country, Malaysia.

In 1976, Tan Sri Datuk Sir Tiong set up RimbunanHijau. He showed the kind of

perseverance that Fuzhou people are known for. Together with some of his brothers,

RimbunanHijau established a solid reputation and has emerged as a revered multinational

corporation. Nowadays, Tan Sri Datuk Sir Tiong business has been diversified and goes

globally to include Japan, Hong Kong, Australia, Canada, the United States, New Zealand,

Singapore, Russia, Papua New Guinea, Equatorial Guinea, Gabon, Brazil and British

Guyana. He also has investments in Shanghai, Dalian, Harbin, Datong and Guangzhou in

China. Besides timber business, Tan Sri Datuk Sir Tiong business also covers finance, media,

IT, mining, aquaculture, agriculture (oil palm plantation), reforestations, hospitality, trading

and property development.

Today, RH Group is one of Malaysia’s most integrated, dynamic conglomerates, and

also one of the largest private sector employers. Its core business operations can be

categorized into the followings:

1 Forestry Jaya Tiasa Holdings Bhd

Subur Tiasa Holdings Bhd

Mafrica Corporation SdnBhd

RimbunanHijau (PNG) Ltd

New Zealand, Russia,

Malaysia, Papua New

Guinea, Africa

2 Oil Palm RimbunanSawitBhd

Mafrica Corporation SdnBhd

Golden Star Ace SdnBhd

Malaysia

3 Media Sin Chew Media Corporation Bhd

Guang Ming Ribao

Ming Pao Enterprise Corporation Ltd

Nanyang Siang Pau

China Press; The National

YazhouZhoukan

Malaysia, Hong Kong

4 Hospitality New Zealand King Salmon Co Ltd Aquaculture (Salmon)

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RH Hotel

RH Tours & Travel Agency SdnBhd

Charming Holidays Ltd

Travel Planners (PNG) Ltd

Click Clack Ltd

Hotel

Tour

Manufacturing – Polyware

Hypermart

5 Oil & Gas RH Petrogas Limited China, Indonesia

6 Education RH Academy Malaysia

1.0 What Is Entrepreneurial About RH Group

1.1 The humble beginning (1975 - 1985)

The roots of RH Group are firmly established in the town of Sibu, Sarawak.

Back in 1975, when the founder, then Tan Sri Sir DatukTiongHiew King, started

his timber contracting business in Sibu, no one could see just how far RH Group

venture would go. His first job was as a logger for his uncle (mum’s brother) who

was a logging contractor.Tan Sri Tiong was very diligent, hardworking, honest,

friendly and is a determined person and he soon master his skill in logging

business and won his uncle’s full confidence to entrust the entire logging business

from operation to marketing to him. This afforded him a golden opportunity to

build relationship with workers, staffs, suppliers and customers including

government agencies. But the biggest momentum came when he was “fired” by

his uncle when he was 40 years old to make way for his two sons without any

compensation despite having helped him built up his business empire after some

25 years. He was even accused of swindling the company of millions of dollars.

The frustration and anger suddenly turns into a tremendous urge and power

to excel and he wants to prove to the world that he can be bigger and

stronger than his uncle, something that he never dreamt of.

As a staunch Christian, he did not give up but prayed for divine intervention and

he finally received support from the Chinese and signed a big purchase contract

with him. As soon as he returned from China, the log market plunges and he was

able to get cheap supply of logs in the market and sell to China at higher

contracted price. He capitalizes on it and being far-sighted, decided that the

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company cannot just depend on trading but must move upstream and own its

own concessions so that the company can tap the full benefit of high prices

and be assured of supply at good market. By this time, the company has gained

trust from local bank to support to acquire its first timber concession and with the

help from his 3 brothers in operation, did very well and decided to continue his

acquisition trail despite the higher risk. It seems God was on his side, the

market turned very bullish and RH Group quickly became the largest timber

operator in Malaysia and concession owners and was crowned the “Timber King”.

Via the passion, ambition and farsighted of entrepreneur founder, the first decade

of RH Group was marked by patience and the nurturing of the resources and

expertise necessary for the subsequent growth of the company from the logging

contractor, and transforming into largest timber operator and concession owner in

Malaysia. The stage was thus set for the next phase of growth of the RH Group

story, a new chapter that takes RH Group all over the world.

1.2 Accelerated Growth and Downstream Processes (1986 - 1995)

The period (1986-1995) was marked by accelerated growth since its timber

business consolidated itself with new investments. By this time, several

prominent Malaysian timber based companies have emerged:

RimbunanHijau Plywood SdnBhd, Subur Tiasa Holdings Bhd, Jaya Tiasa

Holdings Bhd. In 1990, Jaya Tiasa Holdings Bhd was listed on KLSE; In

1997, Subur Tiasa Holdings Bhd was listed on KLSE.As there are many lower

grade logs which are not exportable, RH Group started the first modern

sawmill in Sibu to turn these logs into sawn timber for higher return . Next, in

anticipation that the government may one day restrict free export of logs, an

assumption which proved correct later,RH Group started the first modern and

commercial plywood mill in Sarawak in 1988 and put Sarawak on plywood

exporter market for the first time. In view of so much wood wastes, off cuts,

veneers and plywood trimmings being cast into the river or openly burned in

sawmills, veneer and plywood mills thereby destroying the environment.RH

Group started yet again the first particleboard plant in Sarawak. It not only

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resolves all the waste wood problems but turn them into profits for many.

Soon, the timber market became overcrowded.

To ensure its sustainable growth in timber business, RH Group has been one

of the pioneers in the use of ecologically based scientific forestry in South

East Asia and having high commitment to Sustainable Forest Management

by helping to conserve the forests for the economic and environmental needs

of future generations. This passion typically stems from the RH entrepreneur’s

belief (Tan Sri DatukTiong) that the timber business will positively influence

people’s lives. Making difference in people’s lives is also the primary motivator

behind his entrepreneurship spirit. The

1.3 New Venture Creation - Expansion to Overseas (1990 - 2005)

Loggers were bidding up prices for timber concessions to unrealistic level and at

the same time, the Sarawak state government started to impose many export

restrictions and high export duties that stifles growth. At the same time, Sarawak

is fast running out of virgin timber concessions.In his quest for expansion and

break out from government regulations and restrictions, Tan Sri decided RH

Group to venture overseas.

In 1990, RH Group moved into Papua New Guinea, a cowboy land, by buying

into an ailing logging operation. The country later became one of the major timber

bases of the RimbunanHijau Group in the Asia-Pacific region. RH Group also

started its first English language newspaper publishing business in Papua New

Guinea (The National) in 1993.He has also diversified into Papua New Guinea

with total plantable area of over half million ha. RH Group business in Papua New

Guinea has expanded from timber logging to further downstream processing and

now diversify into shipbuilding, banking, insurance, hypermarket, hotel,

restaurants and oil & gas.

In 1991, RH Group bought a concession in Gabon, Africa followed by

Equatorial Guinea, Cameroon and Congo. In 1992, RH Group ventured into

Brazil and British Guyana.RH Group venture has thus far been confined to

tropical hardwood.

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In 1993, in order not to miss out on softwood market, RH Group ventured into

New Zealand and Russia with the intention of covering both Asia, Africa, South

American and European market.

RH Group’s investments in New Zealand grew rapidly within 10 years. It

involved in major timber operations and reforestation, diversified to exotic

business like salmon farming, plastic and polycarbonate table-wares and

housing development. At the same time, RH Group also spread its wings to

Australia (RH Group cattle ranch in Northern Territory in Australia.),

China, and the African continent (Equatorial Guinea, Gabon).

RH Group has entrepreneurial motivation to venture, invent and innovate,

and it has been expanded globally and doing very successfully.

1.4. New Venture Creation – Business Diversifications (1988 – 2014)

The second development period in RH Group exciting milestones was when

founder broadened its core businesses to encompass the following major

activities:

1.4.1 Media Chinese International Limited

Besides the founder’s love for timber, Tan Sri is a very keen reader of

newspaper and magazine. He reads much to keep abreast with new

technology, world situation, social development and of course potential

business opportunities. He has a very deep sentiment for Chinese culture.

So in 1994 when the ailing Sin Chew JitPoh up for sale, RH Group

decided to have a crack at it against all odds. Many were commenting

why the timber king wants to lay his hand on a totally different business

from timber. In fact, very few people know that in his younger days, he

was a shareholder in the first Chinese newspaper in Sibu. He has a good

knowledge of the “Do and Don’t” of running a newspaper. He knew

that with the newspaper, a whole new frontier and business

opportunities will be open to him due to the enormous worldwide

network and publicity he can create, not only with businessman but

also with association and government leaders. RH Group’s foray

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into the Chinese language publishing business grew as a

commitment to serve the Chinese communities and promoting

Chinese cultural heritage around the world.

His judgment to buy proved correct. Sin Chew JitPoh became the No. 1

Chinese newspaper in Malaysia. In the subsequent years, RH Group

acquired the No. 2 Chinese newspaper and two other smaller Chinese

Dailies and now commands over 80% of Malaysian Chinese readership.

Subsequently, RH Group took over “Ming Pao” in Hong Kong which

created another uproar but with that, he was able to build good

relationship with Chinese Government which open the way for him to

venture into many new businesses in China which includes toll road,

timber complex, housing development, oil and gas, industrial park etc.

Later, RH Group took Sin Chew JitPoh public to be dual listed in both

Hong Kong and Malaysia and expand further into Cambodia, Indonesia

and soon, Thailand.

Media Chinese International Limited is a leading Chinese-language

media group formed by the successful merger of Ming Pao Enterprise

Corporation Limited, Sin Chew Media Corporation Berhad and Nanyang

Press Holdings Berhad. The Company is the first entity dual-listed on

The Stock Exchange of Hong Kong Limited (stock code: 685) and Bursa

Malaysia Securities Berhad (stock code: 5090).

Serving the global Chinese readers is the mission of Media Chinese, its

product portfolio in Southeast Asia, Greater China and North America

comprises 5 daily newspapers in 13 editions and 3 free newspapers with

a total daily circulation of about 1 million copies, as well as about 30

magazines. The Group has also expanded its business into digital media.

Media Chinese is the proprietor of Life Magazines, the largest Chinese

language magazine publisher in Malaysia, and is the major shareholder

of One Media Group Limited (listed on The Stock Exchange of Hong

Kong Limited; stock code: 426).In 2004, Sin Chew Media Corporation

Berhad was listed in KLSE.

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1.4.2 Oil Palm Cultivation & Downstream Activities

In 1988, Tan Sri has an opportunity to acquire RH’s first oil palm

estate and he did not let it pass. That was another far-sighted venture

demonstrated by RH Group in that palm oil has proven to be a big

success for Malaysia. Even though palm oil business has its peak and

trough, over the years, RH has expanded (based on his philosophy

that land is going to be more scrace) from one estate of 5000 ha to 40

estates of over 300,000 ha and 7 crude palm oil mills (and three

under construction, and two more new construction projects going

to start) spanning all over Sarawak through both acquisition and

own planting. Its total production annually amount to 4 million MT of

fresh fruit bunches and 800,000 MT of crude palm oil.

This agricultural endeavor soon became another major activity in the

company’s business portfolio. More importantly, RH Group emphasized

on social entrepreneurship into plantation group to implement a

sustainable and environmentally friendly way by ensuring zero open

burning and controlled use of pesticides to reduce pollution of the

soil and streams.

In 2006, Rimbunan Sawit Berhad, RH main palm oil operations arm

was listed in Bursa Malaysia. The growth in oil palm operations has

given a strong boost with the opening of state-of-the-art oil palm mills,

RH Lundu Mill & RH Selangau Mill. Since then, the group had over a

period of 15 years developed 10 estates with a total landbank of about

50,000 ha and with a good 30,000 ha that were fully matured. In 2012,

RSB has a total landbank of about 105,000 ha with a good 38,800 ha

that were fully matured.

RH Group’s subsidiary, Rimbuan Sawit Berhad has become one of the

significant players in Sarawak’s oil palm industry.

14.3 Education

RH Academy

1.4.4 Oil and Gas RHPetrogas

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2.0 What contributes to its entrepreneurial spirit?

2.1 Founder

Founder has great contributions and impacts on the entrepreneurial spirit of the

organizationbecause he leads the organizations and groups of companies through his

entrepreneurialstyles and leaderships:

2.1.1 Passion for the business

This passion typically stems from the entrepreneur's growing environments

and belief that the businesswill positively influence people's lives and never

give up until success. Passion is particularly important for both for-profit and

not-for-profitentrepreneurial organizations because, although rewarding, the

process ofstarting a firm or step in a new venture or building a social

enterprise is demanding

The ability to learn and iterate

A willingness to work hard for an extended period of time

Ability to overcome setbacks and "no's"

The ability to listen to feedback on the limitations of your organisation

and yourself

Perseverance and persistence when the going gets tough

The group has the passion in starting the businesses, creating the new

ventures, and maintaining the businesses no matter what difficulties and

obstacles facing, and the group will never give up easily but seek the best

solutions to overcome. This is the key of success of the RH Group.

2.1.2 Prior Experience

Prior experience in an industry helps RH Group recognize business

opportunities, and by working in the industry, RH Group could spot a market

niche that is underserved that contributes to RH Group entrepreneurial spirit to

continue expands and invest.

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RH Group transformed from the logging contractor to Malaysia biggest timber

operator and concession owner in ten (10) years timebecause throughout the

experiences, RH Group discovered the needs that must move upstream and

own its own concessions so that the company can tap the full benefit of high

prices and be assured of supply at good market.Furthermore, RH Group started

the first modern sawmill in Sibu to turn lower grade logs which are not

exportable into sawn timber for higher return.

To tackle the problems of so much wood wastes, off cuts, veneers and

plywood trimmings being cast into the river or openly burned in sawmills,

veneer and plywood mills thereby destroying the environment, RH Group

started yet again the first particleboard plant in Sarawak to resolve all the

waste wood problems and at the same time turn them into profits for many.

Prior experience definitely contributes to RH Group’s entrepreneurial spirit

and also builds a network of social contacts in the industry that may provide

insights that lead to opportunities.

2.1.3 Far sighted and Cognitive Factors for opportunities

Far sighted and cognitive factors for opportunity of founder have contributed a

lot to the entrepreneurial spirit of RH Group. Opportunity recognition may be

an innate skill or a cognitive process. There are some who think that

entrepreneurs have a sixth sense that allows them to see opportunities that

other miss. This sixth sense is called entrepreneurial alertness, which is

formally defined as the ability to notice things without engaging in deliberate

search. RH Group has made several critical and strategic decisions in their

businesses based on these special factors.

When RH Group started to pursue the timber concession, RH Group decided

to continue acquisition trail despite the higher risk because RH Group knew

that land is very important and valuable assets. It was proven RH Group

decision was correct and enable the RH Group became the largest timber

operator in Malaysia and concession owners and was crowned the “Timber

King”.

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RH Group started the first modern and commercial plywood mill in Sarawak

in 1988 by anticipate that the government may one day restrict free export of

logs, and it was a strategic move.

RH Group decided to venture overseas to responds to the quest for expansion

and break out from government regulations and restrictions when loggers were

bidding up prices for timber concessions to unrealistic level and at the same

time, the Sarawak state government started to impose many export restrictions

and high export duties that stifles growth. It was again proven strategic moves,

and now RH Group has been very successful in Papua New Guinea, Australia,

China, Gabon, Equatorial Guinea, Cameroon, Congo, Brazil and British

Guyana. In 1993, RH Group ventured into New Zealand and Russia for

softwood market and with the intention of covering both Asia, Africa, South

American and European market.

Also in 1988, RH Group did not let pass the opportunity to acquire RH’s first

oil palm estate and that was another far-sighted venture demonstrated by RH

Group in that palm oil has proven to be a big success for Malaysia. Over the

years, RH has expanded to 40 estates of over 300,000 ha and 7 crude palm oil

mills (and three under construction, and two more new construction projects

going to start) spanning all over Sarawak through both acquisition and own

planting. Now RH Group is planning to construct own Refinery too.

Far sighted and entrepreneurial alertness are great contributions to RH Group’s

entrepreneurial spirit and is still leading the group now.

2.1.4 Motivated to invest, expand and diverse

RH Group contains the entrepreneurial characteristics that build up and

educated by the founder, and they are great contributions to RH Group's

entrepreneurial spirits in business ventures:

Positivity

RH Group sees changes as the norm and healthy, and every challenge

is an opportunity. It helps RH Group to continue invest, expand and

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diverse without fear about the obstacles in front but to secure the

opportunities.

Adoptability

RH Group has the ability to adapt which is one of the greatest strengths

an entrepreneur can have. RH Group willing to improve, refine and

customize their services to continually give customers what they want

and fulfill the society needs as well.

It helps RH Group to refine its core business processes, and also adapts

to its new ventures and keeps on seeking improvements in deliver the

best products or services.

Leadership

RH Group grooms good leaders who are someone with charisma, a

sense of ethics and a desire to build integrity within an organization.

The leaders are enthusiastic, team oriented and a great teacher in

coaching and building the teams that can be entrusted in handling the

tasks.

It helps RH Group to excel in different kinds of business activities.

Ambition

RH Group has great dreams to achieve and great desire to achieve

something new and decent.

It helps RH Group to aggressively invest, expand and diversify in order

to achieve higher satisfactions.

2.2 Profit Driven

Generating profit is the major goal for most businesses, and it is the major driven

force for the RH Group’s entrepreneurial spirit. Massive expansions and global

investments of RH Group were led by this factor after realizing the opportunities.

Same to RH Group diversification businesses, RH Group has anticipate a great return

and diversify its business into shipbuilding, banking, insurance, hypermarket, hotel,

restaurants, salmon farming, plastic and polycarbonate table-wares, housing

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development, cattle ranch and etc. These activities are scatted all around the world in

Papua New Guinea, New Zealand, Australia and China. RH Group also involved in

Oil & Gas industry and trying to identify new oil farm in Myanmar due to the

extremely high return and profit in that industry. And Locally, RH Group has entered

the oil palm industry aggressively in Sarawak.

2.3 Social Network

The extent and depth of the social network affects opportunity recognition. The

network entrepreneurs identified significantly more opportunities then solo

entrepreneurs. The wide social networks that build by RH Group within the homeland

and also the foreign countries are great contributors to RH Group’s entrepreneurial

spirit.

RH Group starts the newspaper ventures by anticipating a whole new frontier and

business opportunities will be open to RH Group due to the enormous worldwide

network and publicity that it can create, not only with businessman but also with

association and government leaders. This is the strategic moves, and RH Group

implies the same tactics in all its ventures thus building a very strong and wide social

networks.

Through the strong social networks, RH Group is able to assess to marvelous

important information and even business opportunities in order for the group to make

critical decisions.

2.4 Government Support

As mentioned earlier that RH Group building a very strong social networks, and this

helps RH Group to be known to local and even foreign government bodies, and RH

Group having the government supports in their ventures locally and also

internationally. It has been a great tools contributing to RH Group’s entrepreneurial

spirit.

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2.5 Social Entrepreneurship

A social entrepreneur is someone who recognizes a social problem and uses

entrepreneurial principles to organize, create, and manage a venture to make social

change (a social venture). This includes, but is not limited to those who develop not-

for-profit organizations. An entrepreneur who operates with profit in mind can still be

a social entrepreneur if the fundamental goal of his/her ventures is to better society in

some way. This may be done by offering a good or service previously unable to a

certain group, or by operating a business that provides jobs or other opportunities

otherwise inaccessible to certain people.

Social entrepreneurship that imprint in the values of RH Group contributes to its

entrepreneurial spirit. Besides earning the profits, RH Group always take up the

responsibilities in cattle for the social needs.

RH Group has been one of the pioneers in the use of ecologically based scientific

forestry in South East Asia and having high commitment to Sustainable Forest

Management by helping to conserve the forests for the economic and environmental

needs of future generations. RH Group emphasized on social entrepreneurship into

plantation group to implement a sustainable and environmentally friendly way by

ensuring zero open burning and controlled use of pesticides to reduce pollution of the

soil and streams.

RH Group starts many schools in Malaysia and China aiming to provide good

educations to the society. And RH Group also start RH Academy to helps graduates

and working adults to have an opportunity to obtain their Diploma, Degree or even

Master. RH Group’s foray into the Chinese language publishing business grew as a

commitment to serve the Chinese communities and promoting Chinese cultural

heritage around the world.

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2.6 Execution Intelligence and Management Structure

Besides the above mentioned, one greatest contributions to RH Group’s

entrepreneurial spirit is its management structure and execution intelligence. The

ability to fashion a solid idea into viable business is a key characteristic of successful

entrepreneurs. Factor that determines whether a start-up is successful or fails. The

ability to effectively execute a business idea means developing a business model,

putting together a new venture team, raising money, establishing partnerships,

managing finances, leading and motivating employees, and so on. It also demands the

ability to translate thought, creativity, and imagination into action and measurable

results. All these while, RH Group managed to be successful in various fields locally

and internationally barely because of its management structures and also the execution

intelligence.

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References :

????

Media Chinese Milestones

30 November 2009

Media Chinese tapped China's mobile reading market through an investment in ByRead

2 February 2009 Ming Pao Daily News New York Edition merged with its free daily to become Ming Pao (NY) Free Daily

20 June 2008 Ming Pao Weekly (Taiwan Edition) was launched

30 April 2008 Media Chinese International Limited was dually listed on The Stock Exchange of Hong Kong Limited and Bursa Malaysia Securities Berhad

23 April 2008 The merger of Ming Pao Enterprise, Sin Chew Media Corporation and Nanyang Press Holdings was completed and the company name of the merged entity was "Media Chinese International Limited"

23 April 2007 Ming Pao Enterprise entered into a merger agreement with Sin Chew Media and Nanyang Press Holdings

18 October 2005 The Group's subsidiary, One Media Group Limited, which publishes lifestyle magazines was successfully listed on The Stock Exchange of Hong Kong Limited

18 October 2004 Sin Chew Media Corporation Berhad was listed on the main board of Bursa Malaysia Securities Berhad

30 April 2004 The Group acquired a magazine operation in China, namely Media2U Group, and formed One Media Group Limited to publish and operate its lifestyle magazines in the Greater China region

5 September 2000 Yahoo! took equity stake in mingpao.com

8 April 1997 Ming Pao Daily News New York Edition was launched

26 October 1995 Tan Sri Datuk Sir TiongHiew King acquired the controlling shares of Ming Pao Enterprise and was appointed as the Chairman of the Board of Directors of Ming Pao Enterprise

13 March 1994 The Group acquired the ownership of YazhouZhoukan from Time Warner Inc.

15 October 1993 Ming Pao Daily News Vancouver Edition was launched

28 May 1993 Ming Pao Daily News Toronto Edition was launched

22 March 1991 Ming Pao Enterprise Corporation Limited was listed on The Stock Exchange of Hong Kong Limited

17 April 1989 Nanyang Press Holdings Berhad was listed on the main board of Bursa Malaysia Securities Berhad

18 December 1987

Guang Ming Daily was launched in Malaysia

17 November 1968

Ming Pao Weekly was launched in Hong Kong

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20 May 1959 Ming Pao Daily News was launched in Hong Kong

1 February 1946 China Press was launched in Malaysia

15 January 1929 Sin Chew Daily was launched in Malaysia

6 September 1923 Nanyang Siang Pau was launched in Malaysia

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Group Assignment - Module 11 (3) 2-7-2014

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Transcript of Group Assignment - Module 11 (3) 2-7-2014