WORLD REPORT PROFILE : Francis Yeoh : The Malaysian businessman turned the construction firm started by his grandfather into a $2-billion power supplier.

There is a Chinese proverb that echoes in the ears of heirs across Asia: The first generation makes the fortune, the second maintains it, and the third is bound to lose it.

Francis Yeoh, a Malaysian billionaire who now controls the construction business his grandfather started half a century ago, has devoted most of his life to defying the third-generation curse.

“For me, sightseeing meant going to construction sites,” Yeoh says. “At age 7, I could tell you anything about concrete, foundations and how a building was built.”

Now Yeoh, 40 and still baby-faced, has built on that knowledge in a way that would make his grandfather proud.

In just a decade, he took the modest construction company public and transformed it into a $2-billion Pan-Asian infrastructure giant, YTL Corp., which builds everything from hospitals and hotels to airports and electricity plants. (YTL is his father’s monogram.)

In many ways, the Yeoh family epitomizes the typical cog in a network of overseas Chinese who have helped drive Asia’s success.

Immigrants from China like his grandfather have spawned dynastic businesses across the region, linked by blood and hometown ties. As Asia booms, the family-run companies--if they can withstand the challenges to family control that come with rapid growth--are perfectly positioned to cash in.

“The first trillionaire ever will be from Asia,” Yeoh predicts. “The scale of opportunities here is so huge.”

And Yeoh, if not one of the first trillionaires, will at least make his mark as a mogul.

Several years ago, hoping to expand from construction into the lucrative power-supply business, Yeoh turned for lessons to the eminence grise of Asian business, Hong Kong billionaire Gordon Wu, and proved to be a fast learner.

When Malaysia began having frequent blackouts two years ago and sought help from the private sector, YTL was ready. Yeoh’s company put together two power stations at lightning pace, completing them on budget and seven months early, boosting Malaysia’s power output by 20%.

Even more impressive was the financing--Yeoh raised the required $1 billion for the project entirely in Malaysia, a move hailed as Malaysian markets’ coming of age and a demonstration to Western financiers that they were no longer indispensable.

“The technical side has been standardized for a long time,” Yeoh says. “But you can’t cookie-cutter these kinds of financial deals.”

Now, in addition to plans for a Malaysian branch campus of University of London, YTL is developing power plants in Singapore and Thailand, and has projects in China, India and Indonesia that should come on stream late next year.

The company’s first foray into power was an unlikely one. A Malaysian sultan gave Yeoh a small island that had been inhabited by an exiled murderer. After the convict drank himself to death, Yeoh transformed the island, called Pangkor Laut, into a luxury resort and built a small power plant there to ensure uninterrupted electricity.

“Now,” Yeoh says, “I’m just doing the same thing on a grander scale.”

Not to say he doesn’t get a charge out of resort development. For Pangkor Laut’s grand opening, Yeoh flew in famed tenor Luciano Pavarotti to serenade 200 handpicked guests, including several Asian billionaires, the prime ministers of Malaysia and Peru, and the former president of Chile. Britain’s Margaret Thatcher sent her regrets, Yeoh explains, and South Africa’s Nelson Mandela had to prepare for an election.

But Pavarotti arrived in a grand way, with 25 suitcases that contained his own Italian food and a contract with a 57-page rider specifying everything from the water he likes (lemon and lime Perrier only) to the flowers he doesn’t (lilies). With him came the 62-member Philippine Symphony Orchestra, an entourage of technicians, an Italian chef, German bodyguards and a personal physician to tend a threatening cold.

Yeoh wrapped an arm halfway across the giant tenor’s shoulders and grinned. “I’m taking prima donna lessons.”

Yeoh is anything but. He is one of the few billionaires who will brave the Hong Kong subway at rush hour. He is known to challenge his island guests to underwater swimming contests and surprise them by grabbing the microphone from the bar band for an impromptu rendition of “My Way.”

His natural ease saw him through the threat of a rained-out concert, Pavarotti’s sore throat, a burglary false alarm and the demands of too many VIPs in the same place. But at the end of the weekend, after he’d waved farewell to the last helicopter, he confessed he was better off sticking to infrastructure: “It is easier to build a power-generation plant on schedule than organize something like this.”

Yet the concert was in part just another form of power generation--a gambit to launch YTL into the international consciousness and establish himself as a player in the Asian power network. Subtly woven into the sweet strains of Pavarotti’s “O Paradiso” was the declaration that Francis Yeoh had arrived.

It’s a message well-known in Malaysia. Yeoh regards himself as a “business statesman,” frequently traveling with Prime Minister Mahathir Mohamad on overseas trade promotion trips and speaking at conferences on leadership and Asian growth.

The prime minister, in turn, graced the openings of Pangkor Laut as well as YTL’s power plants. While curtly dismissing suggestions that business is booming because of YTL’s political connections, Yeoh is proud of a track record that keeps government contracts rolling into his Chinese-Malay firm despite the country’s affirmative-action policy that favors Malay-controlled companies.

“We don’t apologize for acting like Malaysia Incorporated,” he says.

Now the message is spreading. Easing back into his deck chair, Yeoh pauses as a yellow-beaked hornbill squawks and flaps by, then tells how, before winning the involvement of international partners in a recent power project, he had to earn their respect.

In 1993, when YTL was soliciting bids for about $700 million in power-generation turbines, Yeoh asked the heads of the two top bidders, America’s General Electric Co. and Siemens of Germany, to meet him in Malaysia. Many a deal in Asia is done on a handshake, he explains. “I wanted to look them in the eye to see if we can do business.”

Siemens came, GE did not. Siemens got the deal.

Soon after, GE’s chairman and chief executive, John F. (Jack) Welch, flew to Kuala Lumpur to talk face to face with Yeoh. Now YTL and GE are partners on several projects.

Yeoh considers it a coup, and Welch’s name crops up frequently in conversation, reminding listeners that Yeoh is also a player to be reckoned with.

Along with the struggle for international recognition is the question that haunts all family companies: evolution. What will happen when the company expands so much that Yeoh can no longer groom every manager from age 6? His five young children are more interested in visits to Disneyland than power plants.

“The one major problem facing us and other companies is how to identify international talent and hold it,” he concedes. “You have to have a sense of direction and history.”

But, he notes, suddenly brightening, there’s no proverb warning about the fourth generation.

“This company has vision,” Yeoh says. “We can create our own future.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Biography

Title: Managing director, YTL Corp.

Age: 40

Personal: Married with five children. Bachelor’s degree in civil engineering from Kingston College, England