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Cathay aborts familial ties for higher profile.

SINGAPORE Local exhib-distrib Cathay Organization is transforming itself from a family-owned concern into a more modern institution as a major step toward becoming a regional player.

Cathay flagged its intentions in April when it announced a reverse takeover of loss-making listed company IME. Choo Meileen, Cathay chair and president since 1984, is orchestrating a backdoor listing by turning IME into a shell company, then injecting into it five profitable Cathay companies involved in film exhibition and distribution, a movie library, a bowling center and a property management venture. The process will be finalized by July or August.

Finding best personnel

Although this would give Cathay an avenue to raise new funds, Choo has ruled this out for now. However, one immediate goal is that it helps the group attract quality people.

"I don't believe in family-run companies," says Choo, whose uncle Loke Wan Tho started the cinema chain in the 1930s. "That was good for the old pioneering days, but I think we have to move on. Networking is still important in terms of old ties, but you need professional management."

This need will become greater as the Singapore cinema market becomes both more mature and highly competitive, she believes. With a population of 3.5 million, Singapore has nearly 200 screens, of which Cathay operates about a dozen. Box office is down 20%-25% from last year as the industry grapples with problems like piracy, lack of product and the economic downturn that has hurt the Asian region.

Choo already is mapping out Cathay's path to becoming a more competitive institution.

In film distribution, the company will concentrate on niche films rather than the mainstream. "The problem in Singapore is every theater shows everything," she observes. "We're trying to show (product) in very exclusive screens."

In a veiled dig at the clout of major exhibs Shaw and Golden Village, Choo adds, "Smaller players like us have trouble getting films released on the bigger circuits."

She considers regionalization to be the conduit to becoming a great company.

"Singapore will be our base to spring to new markets like Malaysia, China, Thailand and Indonesia," says Choo, adding that she may seek a partner such as a U.S. exhib. In three to five years, she sees Cathay "as a regional company in our core business of entertainment and leisure."

Cathay is looking to boost its circuit in Malaysia, where it has 12 screens, with 10 more to go up next year. It's planning a leisure center in Kuala Lumpur, modeled on its Orchard Cineleisure, a film and entertainment complex that is the highest revenue earner per seat in Singapore.

However, its move into filmmaking is being carefully paced.

Cathay was active in the local film industry in the 1950s and '60s, and then returned in 1995 with the launch of Cathay Asia Films, which produced the comedy "Army Daze" a year later. This was followed by the animated "A Chinese Ghost Story," a co-production with Hong Kong's Film Workshop. Its third effort, "That One No Enough," by local comedian Jack Neo, was released last month in Singapore and Malaysia.

In the future, perhaps

Cathay Asia is not being funneled into the listed company, although that might happen later once the unit has proved profitable.

Choo is sticking to the plan to produce one film a year while she and her Cathay colleagues gain experience. In Singapore, the process of making films is very much trial and error, she notes.

"You can tell that from the quality of the films," Choo says, including those by Cathay Asia. "We need know-how to make films. Our next stage probably will be a co-production."
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Title Annotation:Singapore's Cathay Organization
Comment:Cathay aborts familial ties for higher profile.(Singapore's Cathay Organization)
Article Type:Brief Article
Geographic Code:9SING
Date:Jun 21, 1999
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