Added On: Friday, November 28, 2008

More than a Publishing Powerhouse

BY melissa loovi

Looking at its expansive 12.5 acre spread in a peaceful part of Shah Alam and 1,200-strong staff, it is hard to remember that Karangkraf started its business in a humble little shop lot in 1978. But the truth is that founder and CEO Dato’ Hussamuddin bin Hj. Yaacub was born with a simple dream of interpreting white pages into great opportunities. He had been born in a bookshop, after all; so perhaps publishing was in his blood. Whatever the case, he has certainly proven to any doubters that Malay publications are a hugely profitable enterprise.

Almost 30 years ago, long before the age of information technology exploded upon us, this ambitious man organised a small workforce to begin publishing the company’s maiden magazine calledMingguan Kanak-Kanak. This was soon followed by weekly tabloids Bacaria andWatan as well as magazines Media Hiburan, Remaja and Nona.

It was a bold effort for the local publishing market but these magazines became extremely popular and circulation grew in leaps and bounds. This led to the acquisition of a printing press (Ultimate Print Sdn Bhd) that broadened Karangkraf’s capacity to handle the increasing needs of customers by taking on large-scale print jobs. Thus, although Karangkraf publications are the most popular of the Karangkraf Group business, Ultimate Print is actually their biggest earner, accounting for up to 70 percent of revenue.

Casting a Wider Net

In July 2006, Kumpulan Karangkraf took a brave step forward by publishing Sinar Harian, a community based daily newspaper focusing only on Kelantan and Terengganu. It is as if it has brought a new light to the East Coast community. Sinar Harian then conquered Pahang in June 2007. This newspaper differs greatly from other mainstream papers as it reports the voice of the people, who were previo usly rather neglected by the mass media.

Beginning September 2007, Sinar Harian expanded its horizons to Selangor and Kuala Lumpur, followed by Melaka and Negeri Sembilan in June 2008. As a company that never rests on its laurels, Karangkraf will not stop there. This humble community newspaper plans to conquer Penang, Kedah and Perlis in October and Perak in November.

As Dato’ Hussamuddin shares with us, Sinar Harian is neutral, transparent and always attentive to any problems or issues of the people that need to be highlighted to the relevant authorities in order to reach positive outcomes.

Force to Reckon With

Today, Karangkraf boasts 30 titles including Pesona Pengantin, Nur, MIDI, Rasa,, Fokus SPM, Bintang Kecil, Majalah PC, Maskulin and Laman Impiana, to name a few. This diverse range spans genders, age groups and even social standing – a Malaysian marketer’s dream. Furthermore, Karangkraf was recognised by the Malaysian Book of Records for having the largest number of Malay publications and has also won numerous awards for its popular publications.

The company has experienced continuous yearly growth of 20% and continues to expand whilst keeping abreast with modern lifestyles, market trends and consumer demands. Thus, Kumpulan Karangkraf stands as a publishing force to be reckoned with and now holds the proud mantle of leader in a challenging and demanding industry.

When we sat down with the inimitable Dato’ Hussamuddin Yaacub, the Group Managing Director and CEO of Karangkraf Group, he captivated us with his candid and quotable opinions. Case in point, he shared just how ‘people-centric’ his Sinar Harian newspaper is with this AirAsia-like sentiment, “Now everybody can be in the news” because the paper is extremely localised and focused on stories of the ‘rakyat’.

It proved impossible to resist Dato’ Hussamuddin, former publisher of the discontinued and controversial Watan and Eksklusif, not least because of his laidback charm and candour as he divulged his thoughts on the ad business and how it relates to his prized publications.

Why did you decide to establish Karangkraf?

I was raised in a bookshop, so I have always loved books and since there weren’t many Malay books or magazines, I felt that a publishing house made perfect sense. It was also my dream since young to become a publisher because I instinctively knew the trade – what people want, what they enjoy to read and so it was a natural thing for me.

Tell us about some of your biggest challenges in the publishing industry?

I was quite lucky [when I started this business about 30 years ago] as Malay publishing was nearly non-existent. There was only Dewan Bahasa dan Pustaka and a few small publishers of Malay books. The Malays were also not very interested in reading. But I happened to come at the right time. When I produced my books and magazines, it was very popular. So my timing was good and I could ride on the wave – the economy was better, people were more interested in learning and it all came together perfectly.

I was also very focused – I started with books and then moved into magazines. Despite the four economic crisis that we have encountered, we at Karangkraf found ways to make it work to our advantage. For example, when money is short, people spend less on things like movies and shopping, but books and magazines are still popular because they are relatively cheap. Also, there was never as much competition for us as the English publications, where we would have to compete with international publishers who often have similar publications.

We are very clearly ahead of our competitors. In terms of magazines, we control about 60 to 70 percent of the [Malay] market. In terms of books, we do not publish educational books, but other than that (general books and fiction) we are definitely very strong.

Aside from being recognised by the Malaysia Book of Records, what are some other proud moments here at Karangkraf?

There’s been many great moments here, which is why we are a big happy family. When we started Bacaria almost 30 years ago, we were selling 200,000 copies while the Malay newspapers were selling 70,000 copies. Basically, whatever we touch makes history because we are market leaders. I would say a lot of it comes from being born inside a bookshop – I give the consumers exactly what they want. It comes down to this: whatever field we enter, we always want to be number one, and we don’t stop until we are. Remaja, Nona and Mingguan Wanita are all still number one. The circulation for Mingguan Wanita is 165,000 copies a week and our numerous advertisers queue to place their products in this magazine. It has proven to be more effective than TV or radio ads. In fact, many small entrepreneurs, such as local cosmetic brands, have become multimillionaires by using our magazine to reach their target audience, and while they’ve moved into TVCs and radio ads now, they still advertise with us.

How has the Malay publication segment evolved?

I think now it has definitely become more competitive. As the number of Malay readers increases, more and more English publishers are realising that the Malay market is very lucrative because it is huge and there is also less competition, so they are entering what was previously our territory. But it is actually good, because it makes us improve our own standards and quality. Furthermore, as we do everything in-house (printing, distribution, etc) I don’t really think that the others can compete with us in terms of costs and such.

Where does Karangkraf stand today?

We have always invested heavily in R&D and for the past 20 years, we have made certain to plough every cent back into the company itself, which keeps us strong. We currently have 30 titles and we hope to launch one or two new titles each year. We are now looking for new categories to break into as we want to ensure that all readers are catered for.

On a related note, we did try to branch into English publications a while back, but realised that it just wasn’t the right fit for us. The entire concept is different with English publications as compared to Malay because English is much more advertisement-based while Malay magazines are circulation-based. So in terms of getting the ads, it is quite a struggle and we decided it was not worthwhile. We have found our niche, which is in Malay publications; that is our strength and we will continue to capitalise on that.

There are so many Malay dailies already, what convinced you that there was still room for Sinar Harian?

To me, because Karangkraf is the only publishing company of this size that is not owned by government-related or political party-related companies, we felt there was a need for us to produce a truly independent newspaper. And because I am a Kelantanese, I chose to start the paper there. It is often considered an undeveloped state and is neglected by most. Our first day there, we became the biggest circulated newspaper in the state. Other papers were selling 6,000 to 10,000 copies a day and we sold 30,000 in our first day, becoming an instant success.

I understood that people were tired of all the propaganda in the newspapers. That’s why we started Sinar Harian as a truly grassroots and community paper. We do not just carry the stories of the leaders, but of the rakyat, too. In fact, the people are our focus; be it the mak ciks attending weddings or a school football match. We became so popular that we moved into Terengganu and Pahang. When we entered the ultra-competitive Selangor market, we conquered most of the other newspapers and are now the number two Malay daily here.

That’s very impressive – Selangor is a very saturated market.

Well, I think we have proven that there’s still room for original news! What we provide is different from the other papers. So when we enter the northern market in October, we anticipate even greater success. We pride ourselves on being neutral and fair and considering the new political environment, we have once again arrived at the right time.Sinar Harian is only two years old, yet our circulation is already comparable to newspapers that have been around for thirty years. This is great as it proves that we are the fastest growing newspaper in the country.

So what has led to th is instant success?

Our unique selling point is that each of our papers is localised for the particular state – the Kelantan edition is different from the Terengganu one; in fact, as much as 60 to 70% is specifically local news. We achieved this is by introducing our Skuad Cakna (‘Caring Squad’), which are Kancil cars that have been equipped with telecommunications systems so that they can operate as mobile offices. These compact vehicles operate in all districts, no matter how remote. We give our reporters’ contact numbers to the public, for their convenience. This ensures that whenever there are any incidents, whether accidents, funerals, or just clogged drains, we are the first to be there. That is how we serve the people; sometimes I even think we serve them more than their wakil rakyat!

This is how we have gained the people’s trust; now they know our telephone numbers and contact our mobile teams whenever something happens. They know that when we publish a story, they will receive the help they need. If you go to small districts in Kelantan or Terengganu, people will tell you of roads that are now tarred whereas before it was just dirt roads. That is why we are their number one newspaper. We are also very fair in our coverage, irrespective of race or religion. Actually, that has led some people to question if we are linked to the opposition parties! But we just believe that the people have bigger concerns; they want solutions to their everyday problems.

Speaking of politics and the powers that be, do you ever face dilemmas about what to publish?

No, we haven’t because we believe in self-censorship. That is what we practice and it works. In this manner, we have avoided having any problems with either side of the fence. Politics can be left to the politicians – that’s their job, after all!

In a time where the Internet is so important, do you feel pressure to focus there?

We have our online version of Sinar Harian, but it is not our emphasis. We have found that Malaysians still prefer the physical newspaper. While online is the future, I think especially in the places we focus on, the people aren’t so keen on going online to read something – we still want to touch and feel the news. Our telecommunications system here is still developing, so newspaper publishers will be safe for the next ten years. Advertising income also mostly comes from print, not from online news! So we still have time here at Sinar Harian to rise higher. I believe that in two years, Sinar Harian will be the number one newspaper.

What would you like Malaysian advertisers to know about Karangkraf?

Personally, I feel the industry has not been treating Malay publications fairly. If you go to supermarkets and malls, you will see that the Malays are the ones who buy the most but the advertisers do not really support them, especially the agencies. That is why some English publications that only have a very small circulation still have pages and pages of ads, whereas Malay magazines have more than 100,000 readers but still no one wants to advertise.

This has to do with perception and it needs to change. That’s why at Karangkraf, we’ve gone against the tide. We are successful because we never focused on advertising too much; it is more of a bonus. Instead, we ensure that our circulation is very high, and this alone makes us very influential because we have hundreds of thousands of readers. This is why some small local brands have become much bigger than their international counterparts, simply because these Malaysian companies have utilised publications such as ours. The big brands are actually losing market share because they are not tapping into the Malay market. So it’s time for the advertisers to take a second look at our market.

Straightforward Success

Many offers have been received for KarangKraf to become public-listed or bought by large corporations or political parties, but Dato’ Hushamuddin and his partners have always resisted because they relish having their independence and freedom, and they recognise that it is part of why Karangkraf has been such a runaway success. It certainly doesn’t hurt that this giant publishing house is helmed by a man who loves to keep things simple and steadfastly maintains a “no frills” family atmosphere.

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