going global

Transcription

going global

E
NTERPRISE
50
2015
The Business Times | Friday, November 20, 2015
GOING GLOBAL
I
NTERNATIONALISATION has been a rallying call among
businesses seeking growth. Whether they are larger
companies expanding their geographical footprint to
mitigate business cycles or smaller firms that have
outgrown their local market, businesses are increasingly
aware of the perks of internationalisation. Our Enterprise
50 (E50) winners are among those going down this route.
Indeed, on average, more than 11 per cent of revenue
for each of this year’s winning companies is generated outside
of Singapore.
Looking ahead, more than 50 per cent said they are pressing
on with internationalisation for growth, despite already having
businesses in two or more countries. Increasingly, one key reason
for internationalisation is the toll Singapore’s productivity drive is
taking on businesses.
Apart from gaining access to new markets, the winners cite
rising rental and labour costs in Singapore as push factors sending
them overseas. According to a survey conducted by KPMG, the
majority of the E50 companies want more government-funded
direct operational and technical assistance and flexibility in labour
rules to match the needs of their businesses.
Not that these businesses are waiting for handouts. After all,
what sets them apart is their constant drive to be better, work
faster, and go further. And they often turn to innovation – whether
in terms of how they do business or the products they put out – to
differentiate themselves.
Accordingly, the judging criteria for the E50 Awards this year
focused on companies’ ability to identify opportunities for
innovation in today’s business environment, alongside the ways
these companies are improving their productivity.
What is notable is that most of these companies have moved
beyond mechanical and technological upgrades to relook business
processes. This is a tall order given that the E50 winners are
heavily represented in the more traditional industries –
manufacturing, for instance, represents 20 per cent of winners.
Another interesting fact about this year’s winners is that more
Supplement editor: Mindy Tan
Sub-editor: Gouw Huat May
than half (27 of the 50) are first-time winners. They come from a
diverse range of industries – there is a private education
institution, a nursing home and a firm that builds dormitories for
construction workers. Half of these companies made it to the
top 10 list of E50 winners.
In the next few pages, in addition to the topic of
internationalisation, we look at the question of family businesses.
Besides tackling currency fluctuations, access to capital, and
economic cycles – issues all businesses grapple with – family
businesses have an additional layer of complications, familial
conflict, that only those involved in it can truly appreciate.
Also top of the minds of many SMEs is the question of
succession planning. Notably, almost all of our winning companies
have a succession plan. Important characteristics of potential
successors include a level of commitment to the business,
experience working in the business and understanding the
principles of business management.
This year’s Enterprise 50 Awards takes place on the nation’s
50th birthday and is aptly forward looking. “The Next 50 –Building
a Better Tomorrow” acknowledges the contributions of local
entrepreneurs who have displayed tenacity and resilience in
building Singapore’s economy, but also celebrates visionary
leadership and those with the foresight to plan for the next 50
years. In these pages, we bring you some of their stories.
The Enterprise 50 Awards is jointly organised by
The Business Times and KPMG, and supported by
International Enterprise Singapore (IE Singapore), Singapore
Business Federation (SBF) and Spring Singapore. The Enterprise 50
Awards are sponsored by OCBC Bank.
Inside
Full steam ahead for ROS
2
The process is the thing for AllAlloy
Coming out of Jumbo’s shell
4
Containing fallout from family feuds 15
Cover design & photo illustration: Simon Ang
6
Advertising sales: Rix Low 9620-1365, Jaclyn Sim 8333-5665, Lina Tan 9620-1355
2
ENTERPRISE 50
| 2015
Full steam ahead
for ROS despite
oil & gas slump
Rotating Offshore Solutions will continue to go after larger projects and is
intent on moving up the value chain. BY TAN HWEE HWEE
T
HE downturn in
the offshore marine sector is not
stopping Rotating Offshore Solutions (ROS) from
pushing the envelope by going after larger projects along with its intention to progress up the value chain.
Set up in 2004, ROS began by taking on contracts valued at millions of
dollars for the provision of engineering and design services and module
fabrication to the upstream oil and
gas sector.
Over the past decade, ROS has acquired a track record with industry
bigwigs including Modec and BW Offshore as well as supermajors such as
Total and Shell, delivering modules
and packages for fixed and floating
production structures that have been
deployed across a wide geography
spanning South-east Asia, the Middle
East, West Africa and the North Sea.
Having established its track record
with the key industry players, ROS
subsequently set out to enlarge its
role by taking on turnkey upstream
projects. These contracts, typically
ranging in the tens of millions of dollars, called for engineering, procurement and construction (EPC) of offshore production structures.
ROS has completed the EPC for the
conversion of a mobile offshore production unit (MOPU), as reported in
The Business Times in November
2014. A company executive told BT
then that the aim was to expand into
EPC for “more diverse and larger oil
and gas process modules and facilities”, including the complete topsides
of floating production, storage and
offloading vessels.
That comment was made in the
early months of a sharp fall in oil prices, which recently traded in the
US$40-US$60 band – about half the
more than US$100 average during the
first half of 2014.
Some supermajors had already signalled their intent to cut exploration
and production budgets before the oil
price collapse, but a persistent lack of
visibility in its recovery led to more
drastic reductions in capital and operational expenditures.
Against this unfavourable macroenvironment, ROS managing director
Chia Kuan Wee says that the relatively
young startup is not backing down
from its growth plan. Instead, ROS
still wants to raise the ante by graduating to larger-bracket contracts that
cross the S$100 million mark.
This may sound ludicrous in an industry rife with talk of down-sizing
and cost-cutting. But this is where, in
Mr Chia’s view, being registered as a
private limited company instead of a
public-listed entity makes a difference. The shareholders and management behind ROS are all aligned with
a common vision to grow the company, according to Mr Chia.
With just 350 employees on hire,
ROS is small but nimble compared to
some multinational oilfield services
companies with thousands of employees and encumbered by a much higher cost base.
ROS also takes comfort from going
after niche segments that see less
competition. “It is a lot easier to command loyalty from clients when there
are not many vendors chasing after
the same projects,” Mr Chia says. For
this reason, he prefers not to disclose
specifically which segments ROS now
goes after, instead broadly describing
its present focus as "fast-track production units".
❚ Continued on Page 4
“It is a lot easier to command loyalty from
clients when there are not many vendors
chasing after the same projects.”
ROS managing director Chia Kuan Wee, on the company’s strategy of going
after niche segments that see less competition
PHOTO: LAURA NG
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ENTERPRISE 50
2015
Coming out of Jumbo’s shell
The seafood-focused restaurant group has set its sights on regional – and even global – expansion. BY VIVIEN SHIAO SHUFEN
F
OR seafood fiends, there is
nothing more glorious than
getting your hands messy
and tucking into a plate of
piping-hot chilli crab.
This renowned Singaporean dish is what Jumbo Seafood is most well-known
for, and its five outlets here are often packed
with both local and tourists wanting a taste.
Its fame has paved the way for Jumbo
Seafood’s ambitious expansion into China
and its recent initial public offering (IPO) debut on the Catalist board that was almost
eight times subscribed.
It has certainly been a busy period for chief
executive officer Ang Kiam Meng, but he says
that it is necessary for the company to continue participating in awards such as Enterprise
50 as it is a “report book on how well we have
done”.
“We can’t just go ahead blindly without a
benchmark in the industry as we would not
know whether we are on the right path or not.
It is a recognition of our effort,” he says of the
company’s listing.
Jumbo Seafood’s IPO was the talk of the
town earlier this month as the listing market
has been relatively dismal so far this year.
According to Mr Ang, the purpose of the
IPO was to expose the company to a wider platform, tap the capital market and raise its profile in the hope of attracting better talent.
“It is also for staff to have a share of our
company and distribute the fruits of our success,” he adds.
The company’s listing is considered one of
the biggest this year, and raised S$40 million
from investors including Heliconia Capital
Management (a Temasek Holdings unit) and
OSIM International chairman Ron Sim.
“With the IPO, it is hoped that more people
will get to know us. The company will be more
transparent and people will know we have
good corporate governance (due to listing requirements). We also hope to get more strategic business partners,” says Mr Ang.
One of the ways Jumbo Seafood is planning to use its IPO proceeds is to expand further in China.
Mr Ang believes that China is a very promising market with a large segment of cosmopolitan middle-class consumers who have high
spending power and are “adventurous in food
and taste”.
Jumbo Seafood’s
restaurant in
East Coast Park
(above), one of
its five outlets in
Singapore, and
the chain’s
signature chilli
crab dish.
PHOTOS: ST FILE,
JUMBO GROUP
MANAGING HUMAN CAPITAL
Jumbo Seafood entered the China market in
November 2013, and has been focusing on
Shanghai as a springboard into the country.
The plan is to build a strong local middle-management team there, as well as create awareness of the brand before expanding into other
cities.
“By then, if we have opportunities in other
places like South Korea or Hong Kong – or
even the US and Europe – we will move in,” he
says.
Mr Ang says he is not particularly worried
about China’s slowing growth as Jumbo Seafood is targeting the mass market, and not the
fine-dining segment.
“Our experience in Shanghai shows that
their spending per head is more than in Singapore – about S$70 compared to S$50-S$60
here. With labour costs and rental costs relatively lower, that gives us the extra margin for
our business there. There is very good market
potential,” notes Mr Ang.
Even with all the fanfare over its China expansion and IPO listing, Jumbo Seafood still
puts managing its human capital at the top of
its priorities. “We are mindful of human capital, and we put in a lot of effort to recruit,
train, groom and retain people – that’s how we
stand out from the rest,” says Mr Ang.
He adds that doing business in Singapore
requires an understanding of labour policies
and the company has to be careful to strike a
balance between local workers and foreign
ones.
The first step of the process is recruitment.
Aside from advertising, Jumbo Seafood has
“The F&B industry
here is so vibrant
as Singapore is a
food capital. I hope
more companies
will do well and
take the path to an
IPO to grow
Singapore’s food
culture to the
region.”
Chief executive officer
Ang Kiam Meng
various initiatives to attract talent such as
scholarships, taking in mid-career workers
and staff referrals.
Mr Ang stresses that staff need to feel they
are a part of the company and have a purpose
in their careers. “This is especially true for
young people. After training them, we need to
think of ways to retain them, to make them
stay with us. So in addition to a good pay package, we also take care of their welfare,” says
Mr Ang.
Jumbo Seafood provides staff with three
meals a day, and they also get the opportunity
to go on a free day tour around Singapore on
their day off to relax and mingle with colleagues from the other outlets.
The company has taken welfare one step
further by providing comfortable, low-cost accommodation for its foreign workers.
“Rental is very expensive in Singapore and
many times, living conditions are bad with up
to eight people squeezed into a room,” says
Mr Ang.
In view of that, Jumbo Seafood rents fully
furnished apartments equipped with wireless
Internet and air-conditioning, and with a maximum of four people to a room. The company
pays for utilities and even provides domestic
helpers to clean the apartments.
“We hope to achieve an environment just
like home. We believe that if our employees
rest well, they will perform well,” he explains.
Mr Ang emphasises that the food and beverage industry is very dependent on people.
“Every step of the process – from the buying
of raw products to sending the customers off
– requires people. We can only automate to a
certain extent so that is why we need good
people. Processes and SOPs (standard operating procedures) can minimise problems, but
we still need the human touch to ensure quality delivery,” says Mr Ang.
One thing that Mr Ang has learnt about the
F&B business is that food is the most critical
factor. “People can bear with rude hawkers as
long as the food is good. People are willing to
queue, get scolded, and will still come back
for more,” he jokes.
One of Jumbo Seafood’s biggest milestones was to open a central kitchen in 2008
when the company realised the need to deliver food consistency across its outlets.
“Before we had our central kitchen, the
sauces were made individually by the chefs in
each outlet. Some chefs like being more creative, but we realised we needed consistency.
Also, with a central kitchen, our chefs don’t
need to do as much preparation work, so it is
less tiring for them. They are able to work
longer hours, and consistently produce the
same dish,” he says.
INSPIRING OTHERS
The central kitchen also helped save precious
space in the company’s outlets as there was
no need for such big kitchens any more. This
translated to more seating space, and more
revenue generated per square foot.
Moving forward, expansion plans in the Republic will take place at a slower pace as Singapore is a mature market for Jumbo Seafood’s
business. Setting up a base in Shanghai and
the focus on growth in China will take precedence for the time being
Jumbo is the only seafood-focused restaurant group on the Singapore Exchange, and Mr
Ang says he hopes to spearhead a movement
and inspire others to do the same. “The F&B industry here is so vibrant as Singapore is a
food capital. I hope more companies will do
well and take the path to an IPO to grow
Singapore’s food culture to the region,” he concludes.
[email protected]
@VivienShiaoBT
Full steam ahead for ROS despite oil & gas slump
❚ Continued from Page 2
Demand for these fast-track solutions is
fuelled by a necessity confronting oil companies to maintain output despite the low oil
price environment.
This puts pressure on contractors to think
out-of-the-box in coming up with highly customised but cost-effective solutions. This is a
challenge in which ROS stands a chance of triumphing over its much larger rivals as it has
the flexibility of operating from a more competitive cost base as a result of its lower overheads.
ROS also enjoys a key advantage from having elected to operate from Singapore. Here in
the home country of Mr Chia, spare parts,
valves, steel plates and other equipment and
materials are available in all shapes and sizes
as a result of the thriving offshore marine supply chain that has developed roots in the island nation. This puts ROS in a better position
to tailor equipment packages to end-clients’
specifications and budget requirements.
ROS has elected to lease a two-hectare wa-
terfront yard at JTC’s Offshore Marine Centre,
where fabrication and assembly of modules
can be carried out.
ROS has also established relationships
with vendors and bankers, which it relies on
for support to execute projects. Mr Chia notes
that ROS also enjoys the flexibility to turn to
bank borrowings given its relatively lower
gearing ratio.
Besides debt financing, ROS is set to receive further capital injection with Singaporelisted Ezion Holdings announcing in July the
subscription of over 300,000 shares for a consideration of S$18 million. Ezion’s interest
will constitute 30 per cent of ROS’ enlarged
share capital.
Ezion is a seasoned liftboat and accommodation jack-up rig operator. In its July disclosure to the Singapore Exchange, Ezion said
that the alliance with ROS is expected to expand the customer bases of both companies.
Besides Ezion, ROS also has close ties with
Keppel Shipyard, to which, BT understands,
the younger startup can turn for additional capacity required to deliver EPC projects.
“Oil and gas is a sector that creates opportunities for locals – the value creation is very
high but it also requires a lot of hard work,”
says Mr Chia.
ADAPTING TO NEW OPPORTUNITIES
Of the headwinds confronting oilfield services providers active in the upstream space,
Mr Chia says: “In business, there are always
ups and downs – you have to maintain reserves during upswings and work harder and
innovate to adapt to new opportunities during downturns.”
He acknowledges, though, that this is often easier said than done.
ROS is understood to have delivered two
fast-track production units to oil companies
operating in Indonesia and Malaysia. The contracts were delivered amid oil companies unveiling up to 50 per cent capital expenditure
cuts in the two South-east Asian hydrocarbonproducing countries.
But as the chief executive of Malaysia’s Petronas, Wan Zulkiflee Wan Ariffin, signalled at
a June 2015 industry event, oil companies
have to invest in new ways of doing business
to improve productivity and eliminate inefficiency to tide over the current downturn.
Since his comment in June, Petronas has
held back on final investment decisions on
several large new field developments including the Kasawari gas project off Sarawak. Instead, the Malaysian national oil company has
pushed on with the sanction of the D18
project involving injecting water and gas
through a MOPU to boost output from the existing field, Malaysian media reported.
Petronas has awarded two contracts tied to
D18, the first involving the lease and provision of a MOPU to home-grown oilfield services contractor, Uzma, and the second for
the supply and installation of flexible lines
connected to the offshore production structure – this went to French contracting giant
Technip.
Petronas has also flagged its intention to
begin a pilot sour gas field development off
Sarawak using a MOPU.
[email protected]
@HweetanBT
“Oil and gas is a sector
that creates
opportunities for locals
– the value creation
is very high but it
also requires a lot
of hard work.”
Mr Chia
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ENTERPRISE 50
| 2015
The process is the
thing for AllAlloy
The welding solutions provider is building up its own brands as it seeks to
help other SMEs move up the productivity ladder. BY MINDY TAN
T
HE pieces are falling in place for local small and medium enterprise
AllAlloy. With almost eight years
of solid experience under its
belt – during which the firm actively
boosted its branding and established
its distribution network – the company is now ramping up a segment it
has been quietly building and
strengthening – its own brands.
It is a plan that has been in the
works from day one – Revolt, its oldest brand, was started almost as soon
as the welding equipment and solutions provider was established and focuses on accessories. Its other brands
include Revosafe, which focuses on
safety products, and Sqwincher, under which it distributes hydration
products including ready-to-drink isotonic beverages which are sold as
powder concentrate and liquid concentrate.
“We have had an office in Malaysia
since the day we started. In Australia,
also, we are selling a lot of our products,” shares Victor Khaw, general
manager at AllAlloy.
“In Indonesia, we just (established
a) JV (joint venture company) so we’re
going to sell a lot more of our products there. We are (also) going to do
one in the Philippines to sell our
brand of products.”
It is a fine line to toe, ensuring that
the products the company designs
and commissions are not in direct
competition with the products it distributes, especially as its principals
are well-established firms with long
histories and that it is selling at the
top end, which is limited in whichever
market it enters.
One of the new products it distributes, for instance, is an automatic
pipeline welding system which elevates the operator from being a welder to a technician.
“The technician can operate this
system and the system can operate
five or six times faster than the existing manual method,” says Mr Khaw of
the system which is aimed at offshore
customers. The operating cost for an
offshore barge is about S$250,000
per day, says Mr Khaw, so being able
to reduce the timeline for a job from
five months to a month-and-a-half is
something all customers are keen on.
But as hyped up as the company is
about this new system, AllAlloy is already in talks with the manufacturer
to make a “B-grade” version of the system, one that may be slightly less effective, but is a lot cheaper.
“We are asking them to make a system – not so advanced, but a lot cheaper – so that all SMEs can use it. This
system costs 200,000 euros
(S$305,300). If you go to an SME and
say one system costs S$300,000, they
will have to think three times, four
times, five times! But if we can bring it
down to half the price, it’s still expensive, but if the price is lower, maybe
we can rent it out to SMEs and if after
six months they find it’s good, they
can buy it over,” says Mr Khaw.
RETHINKING PRODUCTIVITY
Helping other SMEs move up the productivity ladder is something that
clearly informs the firm’s decisions
with regards to products it distributes and designs. Although AllAlloy’s
customers include large shipyards,
ensuring that it has a product line suited to SMEs is also key.
Another product designed with
SMEs in mind is a mini submerged arc
system which AllAlloy designed to be
low-cost and energy efficient. In addition to being suitable for the smaller
work spaces that SMEs typically have,
it is able to use standard power sources. The company has sold about six
such units; each unit is about
S$18,000.
AllAlloy has clearly benefited from
the productivity drive that Singapore
has embarked on. When the firm first
started in 2008, it was posting revenues of slightly over S$10 million, a
figure which shot up to S$25 million
in 2009. The next quantum leap was
in 2012, when its sales turnover
surged to more than S$40 million.
The geographical breakdown of its
revenue streams similarly underwent
a metamorphosis.
Prior to 2012, revenue streams
were equally split between Singapore,
Malaysia and Australia, says Mr Khaw.
In FY2012, Singapore constituted
over 60 per cent of sales by region, a
figure it retains to the last financial
year.
But while there is still space for improvement, sustaining the level of
productivity improvement gets increasingly difficult as the baseline
moves upward. The other problem,
notes Mr Khaw, is the sluggish market
the industry faces.
“Oil prices have been low for many
months . . . but do you see companies
here laying off workers? You don’t
. . . because a lot of companies are
frightened that when they send their
foreign workers back, they will not be
able to get their quota back again. So
today (even if) you’re still working at
this productivity level, your volume
of jobs has gone down (but the
number of workers remains the
same). Even if you’re not doing anything wrong, your productivity next
year will drop.”
This is a multi-faceted problem,
particularly for the marine sector
which will see its foreign worker quota reduced by 10 per cent next year
and a further 20 per cent in 2018.
“This means their productivity
must increase by 30 per cent, which
we find close to impossible. We have
been to yards around the region and
even Europe. We find the yards here
are quite good already, so even if they
can improve their productivity we believe it won’t be in the region of 30 per
cent. So what we are doing is helping
them redesign their jobs to make locals want to work in it. If you can hire
more locals, even if your foreign dependency ratio drops, your total
number of staff can be retained.”
AllAlloy is helping yards redesign their welding jobs in order to attract more Singaporeans to the sector amid
the cutback in the foreign worker quota, says Mr Khaw. PHOTO: YEN MENG JIIN
And by focusing on processes rather than products and helping customers change their welding processes to
improve their productivity, AllAlloy
has built its clout.
Says Mr Khaw: “Our industry is not
a big industry. We are differentiated
from the rest because we’re the only
welding house that has an E50 award.
Now, when we talk to overseas people, we are eight years old so there’s a
bit of track record. But when we were
two years old, people would ask, Can
we trust them?”
To that end, AllAlloy has won recognition in the form of awards – in the
very first year of business, the firm
clinched the Emerging Enterprise
award which it went on to win for two
years running; this year marks the
fifth consecutive year it has clinched
the Enterprise 50 award.
Casting its eye to the wider market, AllAlloy sees a number of overseas prospects. These include the potential of starting a welding business
in China and looking for opportunities in Myanmar.
But it is not in a rush, and is biding
its time. After all, the best gains can
be found in the process.
[email protected]
@MindyTanBT
Nursing home provider rides the silver tsunami
By Vivien Shiao Shufen
[email protected]
@VivienShiaoBT
NURSING homes do not have to be
dull, sterile places crammed with
beds. With some experimentation
and effort, eldercare services provider Orange Valley is paving the way for
residents to enjoy quality care in a
comfortable, modern setting that
feels just like home.
Singapore, as well as the region, is
facing a greying population and the
demand for nursing homes has shot
up tremendously in the past decade.
Orange Valley has been riding on
the silver tsunami to become the largest nursing home operator in Singapore with six locations islandwide
and more than a thousand beds.
Khoo Chow Huat took over the
helm in August last year and he is not
content with just conquering the local
market: he has his sights set on the
surrounding region as well.
A first-time entrant to the Enterprise 50 Awards, Orange Valley started with just one nursing home in
1993 set up by its founder and previous CEO Tan Soo Sam.
After the business was bought
over by equity fund KV Asia last year,
Mr Tan stepped down and Dr Khoo
was brought in to run Orange Valley.
ENHANCED STANDARDS
Dr Khoo may be new to Orange Valley
but he is no stranger to the healthcare
business. He was previously at an investment firm which looked at healthcare assets in the region. Prior to that,
he was the CEO of Mount Alvernia Hospital and Assisi Hospice from 2008 to
2012.
Says Dr Khoo: "Our vision is to be a
leading healthcare operator in the region. We see eldercare as a sector with
a lot of potential because of the ageing population. We want to focus on
two things: growth and the improvement of quality of care."
With the introduction of the enhanced nursing home standards by
the Ministry of Health (MOH), Orange
Valley has been reviewing and improving its systems and processes to
meet the new requirements which
will be enforceable from next April.
“Our vision is to be
a leading healthcare
operator in the
region. We see
eldercare as a sector
with a lot of
potential because of
the ageing
population. We want
to focus on two
things: growth and
the improvement of
quality of care.”
Orange Valley CEO
Khoo Chow Huat
PHOTO: LAURA NG
Orange Valley recently passed all
three licensing audits by MOH with zero findings, and all six facilities are on
a two-year licence.
“We have been looking at new
tools and equipment to enhance productivity and deliver better care,”
says Dr Khoo.
This year, the company purchased
a new medication packing machine to
improve efficiency by allowing staff
to pack medication faster and reduce
errors with more information printed
on the packages. It also enables them
to track stock levels.
Orange Valley is also evaluating
the use of machines to monitor vital
signs of patients more accurately and
make the task less taxing for staff.
The company is also looking at
new models of care. For example, Orange Valley is currently testing out
the “Eden” concept in its newest nursing home at Sims Avenue.
The idea is to create a lush and
healing environment for residents
with plenty of greenery. Residents also get the opportunity to benefit from
pet therapy and to plant their own gardens in the premises. If successful,
this initiative will be rolled out to the
other homes, says Dr Khoo.
“We want to grow, but we want to
also make sure we deliver good care
through these different initiatives,”
he states.
Dr Khoo says that the company is
constantly on the lookout for more opportunities. He cites the
government’s move to grow the eldercare sector by releasing suitable sites
for the private sector to develop into
nursing home facilities.
Another area that Orange Valley is
looking at is the government’s BuildOwn-Lease model, where MOH builds
and owns nursing homes and selects
an operator through an open tender.
The ministry aims to develop 17,000
nursing home beds by 2020.
These developments are all
growth opportunities for Orange Val-
ley and would allow the company to
increase its capacity, says Dr Khoo.
Aside from the government’s support for the nursing home sector as a
whole, he says that having a private
equity fund owner gives the company
an advantage. While some nursing
home operators face constraints
when it comes to resources, Orange
Valley is able to request more funding
to pursue opportunities if it has business propositions that make sense.
OVERSEAS MARKET
Also, as a larger group, Orange Valley
is able to enjoy greater economies of
scale. For example, the company has
a central kitchen that cooks for all six
nursing homes instead of having
meals cooked separately at each location. This also helps the company to
have better control over food quality.
“As a bigger group, it allows us to
experiment with different models of
care. With six branches, we can try
out a model in one home and if it is
successful, we can roll it out to the
other homes. If we only have one facility, it is hard to try new things and run
normal operations at the same time,"
explains Dr Khoo.
Another growth opportunity that
Orange Valley sees is the overseas
market.
“In the past, we were very focused
on Singapore as our main business.
But over the past year, we have started looking at regional opportunities –
in particular, China,” says Dr Khoo.
He adds that the company has
been approached by various parties
to collaborate with them on nursing
home projects in China as they have a
high regard for the Singapore healthcare system.
Just a few months ago, Orange Valley signed a memorandum of understanding with CapitaLand in Guangzhou to develop an eldercare facility.
Dr Khoo says that of all the markets the company is looking at, China
is the most ready due to its ageing
population as a result of the one-child
policy.
“They don’t have many good nursing homes and there is a gross shortage of supply. All of the Asian markets are ageing, but in markets like Indonesia, there is still a strong mindset
that the elderly should be cared for in
the family. The idea of a nursing
home might take a while before it becomes a viable business proposition,”
he explains.
Orange Valley may be benefiting
from the growing ageing population
and rising demand for eldercare services, but it still faces challenges as
an SME.
Rent is not a big factor as it owns
some of its facilities and some are
leased from the government, which is
“quite a reasonable landlord”, says Dr
Khoo.
“Manpower is always an issue in
the healthcare sector, even in big hospitals. When it comes to SMEs, it gets
even more challenging,” he says.
To cope with the labour crunch, Orange Valley has been looking at different sources of manpower. The company used to bring in workers from the
Philippines, but it is now looking at
places like Myanmar.
The company is also trying to attract locals to the business by participating in job fairs, and is looking at
how to redesign jobs to attract Singaporeans to the sector.
“I am part of the ILTC (intermediate and long-term care) manpower
council and we constantly discuss
how we can work together as an industry to raise the profile of the sector so
that people are more aware of it and
the advantages of joining us,” he says.
Dr Khoo says he expects demand
for eldercare services and nursing
homes to continue to grow.
“What we hope to do, besides growing our capacity in tandem with demand, is to offer more options for consumers. In the future, I imagine that
when we build nursing homes, we
may build homes with more selection
of room types, with a higher proportion of single and double rooms, so
they can choose,” he says.
Dr Khoo adds that over the next 20
years, consumers will be more discerning and there will be people who
have the ability and the desire to be
cared for in an environment that is
better than what’s available today.
“As the government ramps up capacity, our question is how we can improve our quality of care and offer value for money,” he concludes.
|
7
8
ENTERPRISE 50
| 2015
Exploring new worlds
Two-decade-old electronics firm Superworld is ready to exit sectors it has established itself in and move into R&D and new markets. BY SOON WEILUN
C
HANGES are afoot at Superworld as it gravitates towards new frontiers.
One change was the
creation of two new
full-time positions earlier this year to engage in
product engineering and design. At the same
time, Superworld is reaching out to new markets while winding down its presence in old
ones.
With these changes, Superworld hopes to
reorientate itself towards a rapidly changing
landscape in the global electronics manufacturing industry.
“As the economy changes, we can’t stay
put with our old ways of doing business,” says
the company’s managing director Johnson
Chen. “Right now we are trying to be more orientated towards design and engineering.”
It is this commitment to innovation that
has helped Superworld remain relevant
throughout its 22-year history – and a frequent winner of the Enterprise 50 awards.
It clinched the award five times previously
as Superworld Electronics, and this will be the
first time it is being awarded as Superworld
Holdings.
Superworld Electronics started out in 1993
as a sales and trading company for electronics
components. It then gradually expanded its
operations to include manufacturing of these
components.
As its operations grew, Superworld Holdings was created in 2002 to help manage the
finances and investments of the Superworld
group of companies and subsidiaries.
Now, Superworld sells products such as
multi-layer chip beads, power inductors,
transformers, connectors and cables to other
electronics companies.
Its products are designed and manufactured in Singapore, China, Taiwan and Hong
Kong.
Customers then use these products in
their own manufacture of electronics
end-products such as mobile phones, electronics controller, LED lighting, hard disk
drives and graphic cards, for both industrial
and consumer end-users, including Motorola,
Dell, Hewlett Packard and Dyson.
Aside from sales and manufacturing, Superworld is making another push to move up
the manufacturing value chain.
Superworld employed a design engineering manager in January this year, and a fresh
graduate was hired as product engineer a few
months later in June. Together, these two engineers will work on conceptualising new designs and possible new products from a
90-square-metre engineering laboratory in
the company’s headquarters located along
New Industrial Road in Bartley.
“As the economy changes, we can’t
stay put with our old ways of doing
business. Right now we are trying
to be more orientated towards
design and engineering.”
Managing director Johnson Chen
“No more
laptops,
printers, but
more of the
higher-end
applications
– that’s the
way to
maximise our
profits,” says
Mr Chen.
PHOTO:
LAURA NG
EMPHASIS ON TEAMWORK
Mr Chen highlights the need to move up
the value chain and increase profit margins as
competition is getting more keen in the sector
that the company is primarily in – producing
components for consumer electronics like television sets, laptops and printers.
The engineering laboratory is also expected to help lead Superworld’s forays into new
frontiers.
“It will be a place that drives our innovation, creating better products to improve the
well-being . . . of our end-consumers,” says Mr
Chen.
Superworld is not driving change only
from within the confines of its headquarters
in Bartley. It recently started to speak to university professors in Singapore to find out if
the company could collaborate with students
on product innovation projects.
More significantly, Superworld is ready to
exit sectors that it has established itself in and
enter new ones.
Mr Chen notes for example that there is a
clear trend towards consumers using wearable electronics like smartwatches.
Automotive companies are also looking to
incorporate smart technologies into their vehicles. For example, just by looking at what’s
shown on the car’s dashboard, the driver will
be able to know how strong the pressure is in
the car’s tyres. This is made possible by sensors built into the tyres, and this requires microelectronic components to do the trick.
FINE-TUNING OPERATIONS
Wireless charging is another growing sector.
Already, some furniture makers are incorporating wireless chargers into their products.
Then there are smart metres that Superworld
is looking at. It is in touch with Agilent Technologies of the United States and
Landis+Gyr’s Australian office to produce
components for their smart metres.
Mr Chen says that the market is rapidly expanding in these sectors, so Superworld is
re-orienting itself in that direction by conducting research and making innovations in related components to accommodate any such requests from current and potential customers.
“No more laptops, printers, but more of the
higher-end applications,” he says. “That’s the
way to maximise our profits.”
Re-orientation came at a cost to Superworld, however. In 2012, the company reported an annual turnover of about S$75.3 million. This dropped to about S$59.4 million in
2013, and then to S$59.2 million last year.
The fall between 2012 and 2013 was attributed to Superworld Holdings disposing 90 per
cent of its equity interest in one of its whollyowned subsidiaries in August 2012.
“We were trying to fine-tune our operations,” explains Mr Chen. “And it was then that
we gave up some of the lower-end products,
specifically consumer products, and moved
towards higher-end ones.”
Hence, Superworld is hoping to employ
more product and design engineers in Singapore to venture into future growth areas, but
Mr Chen concedes that this is no easy task.
For one, the increasing costs of labour and
rent in Singapore are constant worries that
the company needs to address before deciding to invest more in R&D.
To mitigate this, Superworld is bringing
down overheads by investing in automation.
Fresh ideas to
improve the lives
of foreign workers
By Soon Weilun
[email protected]
@SoonWeilunBT
IT was a gap that needed to be filled in the foreign worker dormitory sector.
Through working for his family, Jonathan
Cheah, managing director of S11 Capital Investments, realised that there was a lot more
that dormitory operators can do to make the
lives of foreign workers here more comfortable. “Living standards were something that
particularly struck me, and being in the business of recruitment, my parents did mention
to me that a lot of work and improvement can
be done for the dormitories in Singapore,”
says Mr Cheah in an interview with The Business Times.
With that in mind, he and his business partners seek to foster a welcoming environment
at their dormitory, Changi Lodge 2.
There, foreign workers can work out in a
fully-equipped gym and unwind in a games
room that comes with a foosball table and
PlayStation and Xbox gaming consoles.
Their efforts at improving the conditions
of foreign workers living in their dormitories
and turning this into a financially viable operation won them a spot on the Enterprise 50 list
for the first time this year.
NO TIME FOR DOUBTS
The beginnings of Changi Lodge 2 started to
blossom in 2010. Mr Cheah was working for
his parents then, recruiting blue-collared
workers for the maritime, oil and gas, and construction sectors.
Struck by the living conditions of these
workers, he started to consider seriously the
possibility of venturing into building and operating a foreign workers’ dormitory that
stands out from the rest.
When a government tender came along, Mr
Cheah put in a bid together with business partner Lawrence Lee. Having no prior experience
in this field but confident about their prospects after doing their sums, they submitted a
proposal.
They won the tender in 2010 to build
Changi Lodge 2, and then anxiety set in. Mr
Cheah recalls that he and Mr Lee, who now
By introducing automated production
lines in its Dongguan factory in China, where
labour costs are rising rapidly, Superworld
has managed to halve its staff size from about
800 to a total of 284 at present, says Mr Chen.
The Singapore headquarters has 33 employees.
But even after reducing its reliance on labour, hiring of talent remains a problem for
the company as the talent pool in Singapore is
too small, according to Mr Chen.
For example, when Superworld approached a university professor here to see if
his students would collaborate on materials
engineering so that the company’s product
can achieve a smaller form factor, the professor said that they did not have the know-how.
In the mean time, the company is developing clearer career paths for its employees to increase staff retention rates.
oversees business development at S11, wondered just how watertight their financial models were and where they could find reliable
contractors to help build the dormitory.
But there was no time for doubts; work had
to be done. “We knew that at the end of the
day, when the government awards you a contract, you have to do it,” says Mr Cheah.
Within a month, they found a main contractor to start building the dormitory. Along the
way, the business partners also had to put
proper financial structures in place to ensure
that work went smoothly.
The dormitory, spread over 1.7 hectares of
land in Changi, became operational in October 2011. It was able to maximise its
4,000-person capacity within nine months,
and the company was on track to repay its
bank loans within two years.
During this time, the team at S11 made
trips to the countries of origin of the Indian,
Bangladeshi, Chinese and Myanmar workers
they were hosting to get a sense of the environment they come from.
“It was really like a kampung,” says Mr
Cheah.
The management also conducted monthly
focus group discussions to find out from the
residents how it can make things better at the
dormitory.
These measures helped to fine-tune S11’s
approach in providing a living environment
for the workers that goes beyond basic requirements, hence the well-equipped gym
and games room.
The rationale behind this is simple. “The
idea is that if you leave them (the workers) on
their own, especially on their days off, typically they start to drink, and sometimes a different creature appears when they’re drunk,”
says Mr Cheah. Providing more amenities
would help channel their attention towards
more wholesome activities and thus create a
better environment for all.
“Even though conditions in their (foreign
workers’) home countries are worlds apart
from Singapore’s, you cannot expect them to
not have the same living conditions and standards of hygiene as Singaporeans; that’s why
we wanted to fill this gap,” says Mr Cheah,
Superworld also places a heavy emphasis on
training, welfare and corporate social responsibility. This not only increases the morale of
the staff, but also helps the image of the company.
Mr Chen believes that its emphasis on
teamwork and a sense of belonging have
helped Superworld stay relevant amid the
changing demands of the global electronics
sector.
This strong sense of teamwork is immediately clear when one steps into the company’s
office: all its staff don maroon jackets when
visitors are around, there are many photos of
the company’s employees enjoying themselves at various events and maxims on integrity and character are emblazoned on the
walls facing the entrance to exhort and advise
employees.
"Out of an open mind comes true wisdom;
out of meekness comes true strength," states
one quote in Chinese.
Perhaps this is also a saying that has
helped Superworld adapt to an ever-changing
electronics world over the past two decades.
[email protected]
@SoonWeilunBT
1B shows a dormitory that places great emphasis on the welfare of the foreign workers
who live there – perhaps to a greater degree
than at Changi Lodge 2. PPT Lodge 1B has a
food court, supermarket, clinic, remittance
outlet and even a cinema.
Mr Cheah says that the company’s experience in managing Changi Lodge 2 revealed
that music and dance form a big part of the
culture of Indian and Bangladeshi workers.
Thus, when S11 was building its Punggol dormitory, it made a conscious effort to incorporate a cinema within its grounds.
It then collaborated with cinema operator
Golden Village to run the two-hall cinema.
Each hall seats 200 people. The cinema had its
first screening on Sept 3. Since then, there
have been nights when the halls were sold
out.
COOKING STATIONS
S11’s novel approach in managing dormitories has paid off, says Mr Cheah, as it has
generated good word-of-mouth from residents. PHOTO: LAURA NG
who recalls seeing workers living in sub-par
housing conditions, with some not even
equipped with cooking facilities. As a result,
some workers, due to their odd working
hours, had to have both their breakfast and
lunch at the same time after they come back
from their shifts.
S11’s novel approach in managing dormitories has paid off. Mr Cheah says that it generated good word-of-mouth for S11 as residents
shared details of what their lives were like at
Changi Lodge 2 with workers who lived in other dormitories.
Slowly but surely, contractors began to notice that residents of Changi Lodge 2 seemed
more content in general. This has helped S11
forge a better relationship with its clients.
Now, Changi Lodge 2 generates an annual
turnover of S$15 million.
With the success of Changi Lodge 2, S11
was confident of taking on a bigger project.
The same team then set up S11 Granuity Management to bid for a tender for a new dormitory in Punggol, which it won.
This massive dormitory, called PPT Lodge
1B, covers 5.8 hectares of land in Pulau Punggol Timor and has a housing capacity for
14,000 workers. It became operational in February this year.
A quick look at the amenities at PPT Lodge
Adrian Tang, business development manager
at S11 who is also in charge of cinema operations, says that the management wanted to
provide the workers with a convenient place
to watch their favourite movies and relax.
“This way, they don’t have to go all the way
into town to catch a movie – this option is just
not feasible when you’re situated out here in
Punggol,” he says.
Amenities aside, care has been put into the
design of the dormitories to make daily life a
bit less demanding for the workers who live
there. For one, all dormitory rooms have their
own dedicated cooking stations in the communal kitchen. This helps instil a sense of ownership of the cooking areas among the residents
and contributes to making the cooking spaces
cleaner.
Also, each of the 12 beds in a room has two
dedicated power sockets. This gives residents
the freedom to charge their mobile phones or
plug in a radio or an electric fan after they return from a hard day’s work. This also prevents power surges from having too many
people using the same socket, notes Mr Tang.
S11’s efforts in operating PPT Lodge 1B are
clearly seeing results. The dormitory already
hosts 9,000 workers and looks set to reach its
maximum capacity by March next year.
It generates about S$2.6 million in turnover a month, and could hit an annual turnover of S$55 million when full.
Mr Cheah believes that S11’s performance
is a good indication of the value that clients
see in the business. “We can’t simply tell our
clients that our dormitory is better, but when
the workers are the ones telling our clients
that they prefer staying with us . . . it just
made this venture all the more meaningful for
us,” he says.
|
9
10
ENTERPRISE 50
| 2015
PHOTO: FREEIMAGES
Tapping overseas markets for growth
The heads of three S’pore firms that have operations abroad share their thoughts on moving to a foreign market and offer some advice to fellow SMEs
ROUNDTABLE PARTICIPANTS
one hotel manages to garner good sales over a
certain online booking portal, we would check
and see if it is feasible to adopt the same promotion strategy for the other hotels.
At Hotel Royal Newton, we have installed
solar heating panels for hot water on our rooftop not only because it is environmentallyfriendly but it also helps to save electricity.
For all the innovative and productivity initiatives that you put in place, you must not forget the importance of a better customer experience, especially in the hospitality industry.
Guests have shared with us the reason why
they choose to stay at our hotels – because of
our friendly staff who make them feel right at
home.
❚ Daniel Chan, group chairman,
IPS Group Pte Ltd
IPS GROUP is a leading player in building infrastructure equipment & industrial radiators,
and in the distribution of engines, generators
and security equipment in Asia and Africa. It
is an engineering group principally engaged
in the design, manufacturing, distribution, installation and commissioning of a wide range
of infrastructure and industrial equipment,
and provision of training, maintenance, rental
and after-sales services.
❚ Chee Teck Lee, chief executive officer,
Moveon Technologies Pte Ltd
With the growing significance of optical components in many electronics industries, Moveon Technologies aims to be recognised as a
reliable partner in Total Lighting Management. Through its wide range of optics engineering and fabrication solutions, it caters to
the evolving needs of clients and consumers
alike. Moveon is a one-stop shop for optics –
its services comprise design, prototyping and
volume production. Since it was established
in 2006, Moveon has worked with many multinational companies in a variety of industries.
❚ Lee Chou Hock, chief executive officer,
Hotel Royal Limited
Hotel Royal was incorporated in 1968 and was
subsequently listed in Singapore in the same
year as a hotelier. Hotel Royal not only houses
357 exquisitely-designed and spacious
guestrooms, it is also situated close to the
shopping paradise of Orchard Road. The
group has also expanded into Malaysia with
the acquisition of Hotel Royal Kuala Lumpur,
Hotel Royal Penang and The Baba House in
Melaka. It also owns Hotel Royal Bangkok @
Chinatown and Burasari Resort in Phuket,
Thailand. Apart from its hotels, the group has
diversified into property investment as its second core business. The investment properties
are located in Singapore, Malaysia and New
Zealand.
“Finding the right people
to fill key positions in the
different markets is a
challenge. We want
people who share the
company’s vision . . . Also,
as a new player in the
various overseas markets,
it was not easy for us to
convince the established
local manufacturers to be
our partners as they were
not familiar with us.”
Mr Chan
“Proximity to your
customers is crucial. This
not only gives you a
logistic advantage but also
makes it easier to
communicate and build
rapport and relationship
with your customers . . .
Nothing is possible
without a raging passion
for the things you do. It is
important to look beyond
the financial rewards and
do something that you
genuinely enjoy doing.”
“We have to do our
homework and find out
more about the new
market that we are
interested in venturing
into. Speak to the local
business owners and, if
your banker has a
presence there, tap their
expertise. Work with a
bank that is familiar with
your business so that it
will be easier to get the
necessary support when
you go overseas.”
Mr Chee
Mr Lee
Moderator: OCBC Bank
IN the face of rising costs, manpower constraints and the small Singapore market,
small and medium-sized enterprises (SMEs)
have been making forays into overseas markets in search of new revenue. OCBC Bank has
seen an increase in the number of its SME customers expanding their footprints in the region, especially in China, Malaysia and Indonesia. According to IE Singapore, Singapore businesses invested S$33.7 billion overseas in
2013. Even as these SMEs enter new markets,
they will have to navigate the regulatory, financial and business nuances of the different
markets. Three Singapore companies that
have operations overseas shared their
thoughts on why they chose to expand overseas, the challenges they faced and their advice to fellow SMEs.
OCBC: Can you briefly share with us your
growth journey? When and why did you expand your business overseas and where are
your key markets?
Lee Chou Hock: Our first foray into the overseas market – specifically, Australia and New
Zealand – was in the 1990s. It was a time when
the property market offered very attractive
yields. Subsequently, in 2004, we acquired a
nine-storey boutique office building at Cecil
Street as well as Hotel Royal@Queens. From
2007, we continued our overseas hotel acquisitions, such as in Malaysia and Thailand. As
the Singapore market is too small for us to
build our brand and hotel portfolio, Malaysia
and Thailand are our biggest overseas hotel investment markets presently.
Daniel Chan: International Project Supplies (S)
Pte Ltd started in July 1986 as a small trading
company dealing with general supplies to international contractors in Singapore and
South-east Asia. Over the years, the business-
es grew and several subsidiaries were formed
under its wings. The holding company was
then renamed IPS Group Pte Ltd to better reflect the group’s international business and organisation structure.
To grow our business, we need to tap markets outside of Singapore. We began expanding our business to countries in South-east
Asia in the late 1980s. We also formed business alliances with partners as far away as Europe to bring new niche products such as Asphalt Batch Plants, Concrete Batch Plants and
generators to the Asia-Pacific region. With
these niche products, we managed to penetrate markets in the Far East including China
in the early ’90s, followed by India, the Middle
East and African countries since 2000.
Chee Teck Lee: Moveon Technologies was
founded in 2006 to provide customised optical engineering solutions to meet the burgeoning demands and growth potential in imaging
and illumination needs in the consumer electronics and automotive industries.
We now have about 250 employees and we
have grown from providing design solutions
to component fabrication and module assemblies from our two plants in Singapore and
Sungei Petani, Kedah. This growth was largely
driven by the increasing use of optical solutions in mobile devices and computing peripherals as technologies and needs continue to
evolve with the adoption of the Internet and
mobile computing.
Today, our key customers are original
equipment manufacturers and MNCs based in
US and Europe, many of whom are Fortune
500 companies relying heavily on technology
products spanning mobile computing, medical, automotive and industrial automation.
OCBC: What are some of the challenges you
faced while expanding your business oversees?
Mr Lee: Some of the key challenges include
adapting to the local culture, understanding
the local rules and regulations, and having the
patience to learn how things work in the different overseas markets. Another challenge is
the need to manage the foreign exchange risk,
especially when the Singapore dollar is so
strong.
Mr Chan: Finding the right people to fill key positions in the different markets is a challenge.
We want people who share the company’s vision. To retain them, we offer them competitive salaries and provide incentives such as a
profit-sharing scheme. We also invest in the
training and development of our employees
to ensure they have proper career development. Also, as a new player in the various overseas markets, it was not easy for us to convince the established local manufacturers to
be our partners as they were not familiar with
us.
Mr Chee: On a global scale, the immense opportunities are overwhelmingly met with
threats from competitors. As an SME, our competitors are not only other SMEs but the bigger companies as well, regardless of the market we are in.
The key challenges in expanding overseas
are the sustainability of businesses, given the
dynamic nature of today’s business environment, as well as growing a core management
team that will function independently and effectively.
OCBC: How critical is the role of a banker when
you make forays into an overseas market?
Mr Lee: Before we venture into a new market,
we will speak to our OCBC relationship manager who will link us up with a staff member in
charge of the operations in that particular market. They are able to share with us some local
insights as they have a good understanding of
the local market. They are also able to introduce us to potential business partners.
Mr Chan: It is important to work with a bank
that understands your business and needs, especially in countries like China and India
where we are not familiar with the local banks
and vice versa. So it is easier for us to work
with OCBC Bank and tap its overseas network
when we expand overseas.
Mr Chee: A major challenge for any startup is
cashflow management. Poor or inadequate
cashflow management is probably the single
biggest factor that leads to the demise of
many startups. In our early years, our strategy
was to innovate and develop new solutions.
We didn’t want to be a “Me Too” company as
we realised that competing on the same technology platform is myopic and short-lived.
So, we struggled between funding our R&D efforts and paying our staff.
Since 2010, when we won the Best Innovation Award at the Emerging Enterprise Award
jointly organised by OCBC Bank and The Business Times, we have established a good relationship with the bank. It has supported us
over the years when we undertook “calculated
risk” investing in new technologies and opportunities as we expanded our business.
OCBC: There has been a lot of focus on productivity and innovation recently, with many saying that these are two value drivers critical to
an SME’s ability to stay ahead of the competition amid the challenging business environment. How has your company leveraged these
drivers to create value and remain competitive?
Mr Lee: We do a lot of cross-selling at our hotels in Singapore, Malaysia and Thailand, and
we also share best practices. For instance, if
Mr Chan: As a Singapore company, customers
may not be as receptive to us compared to a
foreign brand name. So we entered into a joint
venture with German company, Lintec GmbH
& Co KG, to manufacture and distribute asphalt and concrete plants in the Asia-Pacific.
Lintec won the R&D Innovation Award in
Germany in 2002 for building the first ISO Sea
Containerised Asphalt Batch Plant in the
world. Our joint venture helped to reduce
shipping costs and allowed us to catch regular containerised vessels with regular shipping schedules. On our end, we have the relevant network and market know-how in the
Asia-Pacific region. So we tapped each other’s
strengths to expand and grow our respective
business operations in the Asia-Pacific.
Mr Chee: Moveon Technologies was founded
on the belief that “sustained innovation” is the
key to growth and survivability. In this dynamic marketplace where competition abounds,
the ability to continuously generate ideas and
innovate is, in our opinion, instrumental in
staying relevant.
Productivity must be construed as a given.
It is no longer rocket science to automate manufacturing processes or increase output
through the use of high-efficiency machinery
and equipment. The benefits of automation
go beyond reducing cost and increasing output; it also results in higher consistency in
product quality and increases yield due to a reduction in handling defects.
A key aspect of productivity is enhancing
the knowledge of our employees. This will
eventually lead to productivity derived from
being able to stay relevant and aligned to
evolving changes.
OCBC: What is your advice to SMEs looking to
grow their business overseas?
Mr Lee: We have to do our homework and find
out more about the new market that we are interested in venturing into. Speak to the local
business owners and, if your banker has a
presence there, tap their expertise. Work with
a bank that is familiar with your business so
that it will be easier to get the necessary support when you go overseas.
Mr Chan: It is important to set a goal and vision for your business so that there is a direction that everyone can work towards. You also
need to invest in and retain the right employees by ensuring that they have good compensation as well as training and career development opportunities.
Mr Chee: Three important things we learnt
from expanding beyond our shores:
■ Do your homework to ensure there is a certain level of outlook and confidence regarding
business sustainability in the new market that
you are intending to expand into.
■ Proximity to your customers is crucial. This
not only gives you a logistic advantage, but also makes it easier to communicate and build
rapport and relationship with your customers. Also, choose an area with less competition. We chose to be in Sungei Petani and not
Penang so that we do not have to compete directly with the bigger players.
■ Last but not least, nothing is possible without a raging passion for the things you do. It is
important to look beyond the financial rewards and do something that you genuinely
enjoy doing.
|
11
12
ENTERPRISE 50
| 2015
Game-changer
in how
hospitals work
Mr Chan is taking his
productivity message to
government agencies and
restructured hospitals in the
hope that they will relook
their contract requirements.
PHOTO: LAURA NG
UEMS, which services six out of the eight hospitals here, is
intent on improving productivity. By MINDY TAN
H
AVING tackled the
housekeeping in his
own organisation and
improved the productivity of workers at UE
Managed Solutions
(UEMS), chief executive Chan Cheow
Hong is now taking the productivity message
back to the top of the food chain – government agencies and restructured hospitals – in
the hope that they will relook their own contract requirements to further spur productivity downstream.
UEMS, which was established in 1988, provides a range of services including facility engineering services, environmental services
(such as housekeeping, portering and linen
and laundry management, particularly for
hospitals) and property management services. But healthcare remains a segment close
to its heart, in part because of its roots – then
parent company United Engineers bought the
licensee from Service Master USA which focuses on hospital support services – but also because healthcare facilities form the bulk of its
business. UEMS is, for instance, the secondlargest player in Singapore’s healthcare scene
and it services six out of the eight hospitals
here; it is also the market leader in Taiwan
and in the private hospital sector in Malaysia.
“Everyone thinks this is an easy business,
and everybody wants to open a company.
There are almost 2,000 cleaning companies in
Singapore compared with three years ago,
when there were 1,400 or 1,500,” says Mr
Chan, who rejoined UEMS in 2011 and went
about re-engineering the way the company
did its business, firmly aware that the business model would not be sustainable if it simply relied on cheap labour.
One of the game-changers implemented
was the creation of the firm’s in-house
UETrack System which tracks workers’ locations and assigns jobs via the app.
When ward nurses, for instance, put up a
request for a porter to move a patient to a specific area within the hospital, the system assigns the task to the relevant porter (based on
his skillset).
Upon arriving at the location, the porter
scans a QR code which will indicate his response time, and after sending the patient to
the relevant area, he scans another QR code to
indicate that the job is done. The system will
then assign him to another job in the vicinity.
Says Mr Chan: “In the past, they would
walk from the central office to the location –
unproductive time – do the job, and then walk
back – unproductive time again. We find that
the workers do a lot more jobs now because
they are less tired. In between jobs, they walk
about 50 per cent less, compared to the past.”
ADAPTATIONS
The system goes beyond these productivity
improvements. With data that’s been gleaned
over the years, UEMS is looking to leverage data analytics to further improve its productivity by pre-empting orders.
“We know that in hospitals, certain departments will make a request for a porter at different times; we have all this information in
our database. So we are now designing that
part – to be able to predict an order before the
order comes . . . (This means) we can send a
notification to a porter and he can start walking there. So when you put in your order, he’s
so near you, he can meet the key performance
indicator (KPI).”
Says Mr Chan: “We see huge potential in
this area. And this is something that’s very im-
portant in our business – we move about
3,000 patients a day, on an average of eight to
15 minutes, with 80-90 per cent efficiency.”
Having developed the system in-house also means that the company is able to quickly
adapt the system to the needs of its clients.
“(With a) third-party programme, a lot depends on what you tell them to do. Even then,
there is a gap between what you want and
what they do. And after they write the software, it becomes a standard software.
“Our experience working with different customers is that their protocols vary . . . Over
the years, the nurses have been trained in that
hospital (and) that’s the way they do things. If
you try and push them to do something else,
they’ll say, ‘No, I don’t want to use your
system’. So if we understand what they want,
we can customise the software.”
When the company tried to port over the
UETrack system to Taiwan, for instance, it
met a lot of resistance as the staff preferred to
pick up a phone and dial for the service rather
than key the data into a computer. UEMS was
able to redesign the front end to suit them. Its
solution? A simple touch-screen interface
which allowed hospital staff, through a few
clicks, to pick the services they require.
The company also went down the route of
mechanisation in an effort to improve productivity. It employs, for instance, a compact multi-purpose system to tackle toilet cleaning.
The machine, which has a spray jet and wet
vacuum, allows the cleaner to deep clean and
sanitise the toilet without touching it.
But improving productivity goes beyond
simply buying machinery.
“The machine is so expensive, we couldn’t
continue to do things the way we used to (because) the machine would be idle 95 per cent
of the time,” says Mr Chan. The job re-design
comprised setting up toilet cleaning teams
which would be equipped with the specialised machine. This freed up the housekeepers
who were then given other areas of work.
This has resulted in visible dollar savings –
previously, the labour cost to manually clean
a male toilet, for instance, was S$3.88 per toilet; the figure is now S$1.99 per toilet.
Not surprisingly, training and upskilling
play a big part of UEMS’ productivity improvements. Its in-house training programmes,
which span technical skills training to soft
skills, dovetail with the progression plan the
company offers to all workers.
“If you look at the workforce, we have the
lowest grade of workers in our company. But
you need to train and upskill them, motivate
them. In the past, for example, if we used 20
people to do a job, we now use 18. If I look at
our labour productivity over the last few
years, from 2012 to 2013 there was an increase of 7 per cent. And from 2013 to 2014, it
was an increase of 11 per cent . . . Going forward, I think we can do above 5 per cent every
year. There’s still a lot of room for improve-
ment. Even for the lowest
grade of worker, you can upgrade them.”
But even as UEMS pursues
such productivity measures,
Mr Chan notes that margins
will always be slim if clients
don’t rethink the way they procure services.
“Most procurement contracts for our services – whether for porters or housekeepers – are still headcount-based.
When they specify the number
of workers they need, you
have to provide that number
of workers or they will penalise you for the shortfall. So
what is your motivation to increase productivity?”
Instead, procurement contracts should be performance-based, says Mr
Chan. This means trusting the service provider to decide the optimum number of staff to
put on the job which can ultimately result in
savings for the service provider and the customer.
“We have been in the business for so long,
we can say, to clean this room, it will take 25
minutes. We have unitised every piece of
work and broken it down. For example, in a
hospital, in a day we need to do 10,000 jobs.
We can work out how much resources we
need to channel. Then we can save some labour cost, pass some of that to the workers,
and pass some back to the customer and, of
course, we earn a little bit more.”
UPHILL BATTLE
This shift in thinking about the way procurement contracts are set up is gaining traction
in Taiwan, where the hospitals are more budget-conscious. But educating customers to rethink their procurement style in Singapore
continues to be an uphill battle.
“With the government pushing for labour
productivity, it has to get its own agencies to
set an example. They have to give out contracts that move away from headcount. Or,
you can still have headcount but give incentives to companies that can improve services
using fewer resources but can prove to them
the work is done just as well or better.”
[email protected]
@MindyTanBT
|
13
14
ENTERPRISE 50
| 2015
Unique model
in the private
education
sector
Singapore’s oldest not-for-profit professional institute gears
up to stay successful in its next 60 years. By MINDY TAN
S
TANDING at the cusp of its
60th year, the Management
Development Institute of Singapore (MDIS) is far from slowing down.
Indeed, in recent years the
institute has been making aggressive moves overseas. It
opened its first overseas campus in Tashkent,
Uzbekistan, in 2008, and its second in Johor,
Malaysia. It broke ground for its Malaysian
campus – estimated to be almost five times
the size of its Singapore campus – in 2013.
This year, it announced that it was setting
up its third overseas campus in Chennai, India, in a joint venture with Vels Institute of Science, Technology and Advanced Studies.
MDIS, which bagged its first Enterprise 50
Award on Thursday, has come a long way.
Founded in 1956, it is Singapore’s oldest
not-for-profit professional institute for lifelong learning. Its courses – about 60 per cent
of its programmes are Bachelor’s and Master’s
degree programmes – are offered in collaboration with several universities from Australia,
France, the United Kingdom and the United
States.
A TURN IN FORTUNES
It has been more than 25 years, but R Theyvendran, who continues to be the force behind
the institute, is still often asked about how he
turned the fortunes of MDIS around.
Not that he tires of telling it. It is after all an
impressive story – when Dr Theyvendran first
arrived at MDIS in 1989, the private education
institution was losing about S$60,000 a year.
Within three years, however, he was able to
not only bring it back to the black, but turn in
a surplus of over S$1 million.
Today, the institute has a tidy nest egg
which it sits on, ready to take on its next
project. Indeed, the institute has been able to
meet all its financial obligations and engage in
overseas investment projects and acquisition
deals without incurring any debt, a fact it is
very proud of.
“Our model is very unique compared to
other private education (PE) institutions. We
are not profit-making . . . Board members are
not paid salaries and they don’t get dividends
or anything. Everything is reinvested for infrastructure, curriculum development and expansion plans.”
It is, Dr Theyvendran believes, these values which make MDIS tick. Students are themselves made to sit through compulsory
three-hour courses which stress the importance of family values and ethics.
In fact, the MDIS campus at Stirling Road is
peppered with statues at every turn – the 10
sages of the world (which include Albert Einstein, Samuel Johnson, Aristotle and Maria
Montessori) flank the entrance to the campus
while elsewhere there is a family group and
further inside the campus, a student in graduation robes holding up a globe.
“The statues are a constant reminder to students of what they’ve learnt,” says Dr Theyvendran.
The statues that dot the MDIS campus are “a constant reminder to students of what they’ve learnt,” says Dr Theyvendran.
PHOTO: YEN MENG JIIN
It is not just about imparting values to students, it is about pushing them beyond academic success. In fact, this same spirit of constant innovation and improvement pervades
MDIS’s corporate culture.
Earlier this year, MDIS Corporation, a subsidiary of MDIS, acquired Service Quality Centre (SQC) – which was established in 1990 by
Singapore Airlines and Spring Singapore as
part of the government’s efforts to raise service standards in Singapore – for S$5 million.
SQC provides service excellence, quality and
productivity-related training solutions, and
counts financial institutions, supermarket
chains as well as government ministries and
agencies among its clients.
The acquisition diversifies MDIS’s offerings in training solutions. The school has set
aside S$1.2 million to renovate its Dhoby
Ghaut campus to house SQC as well as its existing corporate training arm, the Manage-
ment Development and Consultancy (MDC),
under one roof.
“We are constantly striving to improve our
processes . . . I tell the departments that every
year I want to see a process change or process
improvement. It’s compulsory if they want to
get better rewards,” says Dr Theyvendran.
“Force them to think!
LOOKING AHEAD
“Now when they tell me they did this and this
(improvements over the year) I won’t accept
because I’ll say that’s not what we want. You
don’t have to tell me what you did, I want you
to look at how you can think ahead and what
you are doing by way of proactiveness. Simple things will make me happy.”
Next year, MDIS is looking to launch its
60th anniversary book, The MDIS Story, which
captures the trials and tribulations of the insti-
tute and puts the spotlight on the movers and
shakers who have contributed towards the
institute’s growth and development. It will also draw on the fundamental core values that
motivated the institute to succeed, and what
it stands for today as a social enterprise and a
key player in private education in Singapore.
Dr Theyvendran is also hoping to not only
boost the awards the institution has collected
over the years, but also build a suitable space
to showcase them.
“Not only local awards, let’s go for international awards,” he says, turning to his staff.
“We’ve got about 11 awards; we should carve
something and put them outside so when people come in they can see we’re real solid.”
He returns to the interview, a determined
glint in his eye: “We are clear of where we’re going and where we’re driven. We don’t want to
collapse.”
[email protected]
@MindyTanBT
ENTERPRISE
50
2015
| 15
Containing fallout from family feuds
Family firms should have a governance framework to manage family risks, one of the key reasons that many go bust. BY MARLEEN DIELEMAN
E
VERY head of a
family firm intuitively knows that
the greatest business risk is not currency fluctuations, access to
capital, nor even
an economic crisis.
It is family conflict.
If a family feud arises and spills
over to the business, it can easily destroy decades of careful reputation-building, split the firm into separate pieces, or spell its end altogether.
Recent years have seen a series of
high-profile bust-ups splashed across
the headlines – from problems at investment firm Hiap Hoe in Singapore
to restaurant business Yung Kee in
Hong Kong and the bitter conflict between the Ambani brothers over
India’s Reliance Group.
How can families – and family
firms – avoid such damaging conflict?
In much of the corporate world,
firms have built governance frameworks designed to manage business
risks effectively.
However, very few business families have created family governance
frameworks to manage family risks,
despite the fact that family conflict is
one of the key reasons why family
firms fail.
This is especially the case in Asia,
where family firms are a dominant feature of the business landscape.
Feuds often arise within families
because expectations of wealth or
leadership positions remain implicit
and contradict the distribution of actual competencies or voting rights.
The larger the number of family
members involved, the more policies
one needs. This is because family
members have different interests and
abilities, and the more diverse the interests, the more likely that painful
trade-offs have to be made.
For example, if someone holds
shares but is not active in the business, he or she might be primarily interested in dividends. Those actually
running the business, however, could
be more focused on longer-term
growth and not inclined to pay out.
What then are the issues that require clarification for family businesses?
MAKING THINGS CLEAR
Here are some points for firms to consider, all of which can be laid down in
a family constitution or charter.
■ The family’s values that underpin
the success of the business.
■ Who can and cannot be owners of
the firm, and how ownership is transferred (including whether shares can
be sold to outsiders and how shares
are inherited).
■ The process for choosing family
leaders and business leaders.
■ Who can work in the business and
under what conditions.
■ How the family interacts with the
business.
■ What the dividend policy is.
■ How family members should and
should not behave (including how to
deal with conflicts of interest).
Of course, discussing these issues
in the open may not be easy. It involves thinking about inheritance,
who deserves what level of compensation, whether family members can get
fired, how much to pay out to whom,
or how to deal with divorce, conflict
and other emotive topics.
Other than aligning the family, the
structure of the firm’s constitution
should also carefully spell out how
In most Asian family
firms, the
boundaries between
private and business
issues are blurred.
While this in itself
may not hamper the
business, it opens
the door to
misunderstandings
and grievances – for
instance, if family
members borrow
from the firm or use
the firm’s property
privately.
the family interacts with the business. In other words, there should be
a link between family governance and
corporate governance.
Ideally, these are separate issues,
but they need to be connected in order to channel the family’s commitment to – and benefit from – the business in a transparent manner.
In most Asian family firms, the
boundaries between private and business issues are blurred.
While this in itself may not hamper
the business, it opens the door to misunderstandings and grievances – for
instance, if family members borrow
from the firm or use the firm’s property privately.
Typically, such misunderstandings do not erupt into conflict when
the founder is still around.
But left unaddressed, they are
much more likely to become an obstacle when the leadership transfers to
the next generation.
By being more transparent about
some basic principles, family business leaders can proactively shape ex-
pectations through greater clarity upfront and instilling a “fair process”.
Although this may not pre-empt
all conflicts, a culture of transparency
and rule-based decision-making can
dramatically reduce any disruptive
impact on the firm.
This way, everyone knows that
trade-offs need to be made and the
message to all family members is that
any difficult decision involves a fair
weighing of multiple interests based
on jointly created principles, rather
than individual preferences.
This can help mitigate any perception of personal bias, so that even if a
family member does not agree with
the decision, it is much easier to accept it as a “fair process”.
There is, of course, no one-sizefits-all recipe to avoid family conflicts
and rules alone are insufficient. Families should also cultivate the right values and a corporate culture of constructive discussion, especially when
the firm moves beyond the founder
phase.
Ideally, disagreements should give
In recent years, there have been a
number of high-profile family
bust-ups that hit the headlines,
including the bitter conflict
between the Ambani brothers,
Mukesh (far left) and Anil, over
India’s Reliance Group. PHOTOS:
BLOOMBERG
rise to constructive discussion which
benefits the family and the business,
with the rules of a family governance
charter assisting in their resolution.
Fundamentally, effective governance is about the rules by which leaders lead.
Small and simple firms need simple corporate governance, and small
families can have simple family governance structures. But when the business becomes mature and diversified, and the family is complex with
multiple generations involved, then it
is time to put rules in place.
Prevention is always better than
cure, and the best time to start is
when there is no serious conflict.
Even so, the process of developing
family governance can take many
months.
Conflicts remain a key business
risk, but families can manage them
constructively through family governance complementing corporate governance frameworks to provide a
more secure business future.
The writer is associate professor of
strategy and policy at the National
University of Singapore Business
School
16
ENTERPRISE 50
| 2015
A yen for doing things differently
Without having a single order, Steven Toy plunged AME International head first into oil and gas. His gamble paid off. BY CAI HAOXIANG
S
OMETIMES, success comes
from thinking differently and
investing boldly.
Steven Toy Kok Sin, 47, recalls how he invested S$15
million in 2010 to buy machines that make components for the oil and gas industry – without having landed any orders from
potential customers.
“It’s a chicken-and-egg thing. If you don’t
have the facilities, customers won’t be interested in you,” says Mr Toy, the founder and
managing director of precision machining
firm AME International.
“A lot of people were saying I was crazy,
throwing in S$15 million as a small SME (small
and medium enterprise) without getting orders. But I like to do a lot of things that people
don’t think is the right thing to do. I decided to
go in and do something different. A lot of people don’t do that,” he says.
The move paid off. AME , then making components for the semiconductor and construction industries, pivoted entirely into oil and
gas – and started growing its business significantly. It now produces components for multinational equipment makers which sell their
equipment to oil majors for subsea drilling
purposes.
From making S$10 million in annual revenue in 2011, AME now makes S$25 million a
year. The firm’s order book for 2016 is already S$20 million.
Despite the oil price crash, revenue is expected to grow 20-30 per cent again next year.
Says Mr Toy: “Our customers are forward
looking. They have been in the business for
more than 100 years. They’re not looking at
the short term, they’re thinking of the long
term.
“And when compared to the West, we’re
more cost effective and efficient.”
SMALL BEGINNINGS
AME began in 1996, when Mr Toy was in his
late 20s. He was then a sales engineer dealing
with customised machines for the plating
and semiconductor industries. But he
yearned to make more money. So he set up
Automated Machinery and Equipment with
S$15,000 of his savings and just one other
person, a welder.
They rented a 1,000 square foot space in
Mr Toy, who
believes the
energy
business is
essential for
the world, says:
“I think this is a
big industry;
there’s a lot of
growth for us
in the next
10-20 years.”
PHOTO: LAURA
NG
Pioneer North and got their first deal making a
spectacle lens coating machine for an Indonesian company.
But disaster soon struck.
The Asian financial crisis hit the region,
and in 1998, Indonesian President Suharto resigned. There were riots in Indonesia, and a
major customer’s factory was burnt down.
“We also took the hit. We were forced into
transforming our business to focus more on a
sector that gives us more consistent orders at
lower risks,” Mr Toy recalls.
The first five years of his business were
very challenging, Mr Toy adds. “Cash flow was
the main issue. It was hard to get bank financing as a new startup,” he recalls.
As AME transformed its business, it began
making components for machines for the
semiconductor industry here, which then had
rosy prospects. By 2003, the company hit S$1
million in annual revenue. Two years later,
the offshore and marine sector took off.
AME entered the industry after making
some investments, supplying components to
a major rig builder in Singapore.
In 2008, the company, which was renting
its factory premises, decided to buy its own
space in Tuas South, which had a gross floor
area of 65,000 sq ft.
Then in 2010, Mr Toy made his foray into
oil and gas.
The company’s move was in line with how
the Singapore economy was transitioning into
higher value-added businesses, Mr Toy says.
“The entry level was higher, more stringent. But in terms of stability and growth, we
saw that from a global perspective, this was a
growing industry.”
He says the rig business was also labour intensive. Making machine components for subsea drilling activity, however, relies more on
technology and knowledge.
“We needed to have special know-how on
equipment and also to digest the specifications our customers needed,” Mr Toy says.
To qualify to supply components to their
multinational customers, AME had to undergo
a stringent process. But once qualified, the
company is assured of a long-term business
relationship, he says.
Still, AME cannot afford to rest on its laurels. Every year, the company is reviewed on
the quality of its work and whether it delivers
goods on time.
And AME has always delivered, Mr Toy
says. “In our business, the trust and confidence customers have in us is important. We
have to ensure internal teamwork across engineering, production, quality control and logistics.”
Looking ahead, a major challenge for AME
concerns labour: attracting local talent to
work as engineers, and dealing with restrictions on foreign workers.
Certain operations and checks in the manufacturing process are dictated by customers
and cannot be cut out in the name of productivity, Mr Toy points out.
Meanwhile, few Singaporeans are willing
to work as machinists. The company hires
50-60 machinists from China and Malaysia on
Work Permits.
The company of 120-150 workers also employs a number of production, quality and
programming engineers. Yet, like other SMEs,
it suffers from the perception that working
there is less than prestigious.
“One of our key projects is to come up with
schemes and a career path for undergraduates to join us after they graduate,” Mr Toy
says.
The company took in two interns from Nanyang Technological University and hopes to
do more, he says.
And while the company is competitive relative to Western firms, it has to contend with
even cheaper countries like Vietnam, Malaysia, Thailand and China as well as those from
Eastern Europe, notably Poland.
“Poland can be pretty good in their engineering; labour costs are much cheaper. For
customers to choose us, we need to have certain winning points; we need to have an advantage in our efficiency,” Mr Toy says.
GLOBAL MARKET
He is confident the subsea drilling business
will continue to grow as he says land exploration opportunities are limited.
“The energy business is a must, a necessity, especially when the world’s population is
still growing,” he says. “I think this is a big industry; there’s a lot of growth for us in the
next 10-20 years.
Mr Toy also has other plans for his company. It may pursue an initial public offering in
the next two years. This will raise funds to
take AME’s business to the next level, possibly
through acquisitions.
The company has also invested S$30 million in a new 140,000 sq ft plant in Joo Koon,
which will be ready by the end of 2016.
“The spirit of business is that you have to
continue to grow. In Singapore, I see plenty of
SMEs get comfortable after they’ve been in
business for 10-20 years,” Mr Toy says. “I want
to continue to grow. We want to go to the global market and do business not only with the
West, but with the Middle East.
“The multinationals are doing oil and gas,
but there are other markets like pharmaceuticals and aerospace that we can bring here.”
[email protected]
@HaoxiangCaiBT
ENTERPRISE
50
2015
Staying ahead
by adapting
to the times
Mr Leong has come a long way from his
home in a “small village in Perak” – his
company generated revenue of S$9.3m in
2014. PHOTO: LAURA NG
Strategic partnerships and a commitment to innovation
help Onn Wah Tech move onwards. BY KENNETH LIM
O
NN Wah Tech founder
and managing director Leong Kwong never got to finish his
polytechnic
programme, but that
didn’t matter as some
of the most important
lessons he has learned about his business
came from outside the classroom.
Success for Mr Leong has come from two
fronts. The first is a dedication to improving
skills and capabilities to keep up with the
changing times, and the second is a belief that
growth can be greatly increased if one finds
the right partners.
Semiconductor testing and assembly
equipment maker Onn Wah Tech, which was
one of the Enterprise 50 award winners this
year, generated revenue of S$9.3 million in
2014. That was a sum Mr Leong, 43, could
hardly have fathomed 24 years ago when he
first came to Singapore to find work.
The young Mr Leong had just finished his
‘O’ Level equivalent in Malaysia and saw an ad
for a job in Singapore. He left his “small village
in Perak” and came to Singapore, where he
lived at a company hostel in Woodlands.
“They sent me the letter, I straightaway
packed my bag and came to Singapore,” recalls Mr Leong.
After a few months, he switched to a job in
the semiconductor industry, where the work
was more interesting and, because the industry was booming, the money was better.
“It was good money then,” he quips. “In
1991, 1992, I could work overtime (OT)
non-stop. Back then, I could work 12-hour
shifts, night shifts; I only rested for two to
three days a month . . . Just imagine, the salary was about S$600 plus allowance, the most
was S$800. From OT you can bring home
S$1,700, so the OT was more than everything
added together.”
Mr Leong also learned very quickly which
path to take if he wanted to advance his career. “I looked at myself and thought, in a factory, if you want to get to the next level, you
need to always study,” he says. “You have to
get your ‘paper’ no matter what, or you can
never climb the ladder. I actually took some
courses. I got my industrial technician certificate, then I did my polytechnic studies while I
was working.”
It soon dawned on him, however, that the
well-trodden path may not be the most suitable for him.
Having worked closely on the development of certain products and processes, Mr
Leong found that he had already acquired a
wealth of knowledge about the equipment he
was working on and for which his employer
was ordering parts. That was knowledge that
he realised would be valuable.
“If I want to excel in a multinational corporation, it’s rather hard, or I have to take a longer time,” Mr Leong says. “But if I know very
well all of (the things I already know) – I work
hard with this design, and I know about this
process – I believe that I can achieve more if I
were to work on my own than in a factory.”
Mr Leong left his job in 2004 and quit his
polytechnic programme in his final year to
start his own business, making the parts that
he had bought while at his former job.
When a semiconductor manufacturer
makes a new product such as a new circuit
board, it needs to reconfigure its machines to
handle the new design. Rather than change
the machinery entirely, it is often more economical to simply change the tool set that is
directly affected by the new design. Onn Wah
makes those tool sets.
Having been on the buyer’s side of the
| 17
equation, Mr Leong had an intimate understanding of what customers wanted, which he
turned into an advantage once he became the
seller. What Onn Wah Tech did in its early
days, and continues to do today, is not simply
manufacture the tooling sets that its customers need, but also to design them from
scratch.
Being able to design a tooling set requires
the company to have a good understanding of
the machines on which its tooling sets will be
used. And that knowledge about the machines is only possible if Onn Wah Tech maintains a close relationship with its customers.
“How we keep up is we need to work with
the customer and see the latest trends and prepare for them,” Mr Leong says. “We’re not the
machine builders, we just sell the toolings.
But we know the latest machine types that are
coming up. Are there any differences in process for producing these parts? If there are,
we have to get ready for that . . . We always
keep up with the latest technology.”
Employees are also constantly upgrading
themselves. Mr Leong believes that his days
of formal education are over, but that does
not stop him from encouraging his staff to further their studies.
“It’s good for them and good for the company,” he says. “This is part of the journey of
their working life . . . And when opportunity
comes, you need to be ready for it. You could
get to know some classmates, and if they’re
good, you can ask them to come and work for
us. Besides that, they can meet more people
from different fields – who knows, one day
they can bring business to us.”
Besides keeping up on technology, Mr
Leong has been keeping Onn Wah Tech
abreast of industry trends. That Onn Wah
Tech remains in business even as the semiconductor and electronics industries have been
shifting most of their manufacturing operations out of Singapore is a testament to the
company’s ability to adapt to the times.
Mr Leong says that about 80 per cent of the
company’s sales originated in Singapore
when he started in 2004. Today, Singapore accounts for about 10 per cent of revenue.
“We have to regionalise our sales and marketing teams, so we employ people for on-site
service in those countries . . . If I just rely on
Singapore customers, it’s likely I’m not in the
market any more because they’re no longer
here,” Mr Leong says.
It has helped, perhaps even been essential,
that Onn Wah Tech has been able to find established partners to help it accelerate its growth
when it needed to.
Two years after starting his company, Mr
Leong in 2006 set up a joint venture in Taiwan
with a customer so that he could pursue business in Taiwan and China. Two years after
that, in 2008, the global economic crisis collapsed margins and led Mr Leong to seek a
partnership with Onn Wah Precision Engineering, his competitor at that time.
Onn Wah Precision was already an established player in the market and had the capacity Mr Leong needed, while Mr Leong brought
design capabilities to the table for Onn Wah
Precision, which was mostly manufacturing
tooling sets for the machine suppliers. It was
a case of competitors joining forces, and Onn
Wah Tech was born.
“That should be the way,” Mr Leong says.
“Keep on competing when the market is so
small – you buy the machine and you employ
10 people and I buy my machine and I employ
10 people, or we together buy the machine
and employ 10 people. Which is better?”
But Mr Leong acknowledges that not all
mergers and acquisitions work out. His experience has been positive so far partly because
he and his partners share the same vision for
the business. There is also a commitment to
stay true to a path that all parties agreed to
when the partnerships were cemented, or at
least to have consensus when the plan needs
to change.
What is the ultimate plan? For now, Onn
Wah Tech is focused on growing its presence
in Taiwan and China with a new manufacturing plant that was set up in 2014. The company is also looking for customers in new industry segments such as the biomedical industry
and semiconductor wafer fabrication houses.
“If we have the right model, even though
the market is down, once the market starts to
pick up, we are ready,” says Mr Leong.
[email protected]
@KennethLimBT
18
ENTERPRISE 50
| 2015
Apeiron finds
treasure in
used cooking oil
the market is also crucial. “They know
that we will never default. Trust and
credibility are what will differentiate
you from the rest of the market –
these are the intangible barriers to entry,” he notes.
Apeiron’s turnover of S$3.7 million in 2008 had surged to around
S$50 million in 2014. However, Mr
Chen acknowledges that 2015 has
been a tough year, especially in July
and August when there was a broad
sell-off in commodities.
Cautioning that the company likely cannot achieve the same growth
rate of the past eight years, which had
come largely on the back of China’s
economic expansion, Mr Chen says
Apeiron has set its sights on integrating upstream and downstream to preserve its rice bowl. “The challenge every trader faces is that we know trading is not forever. A supplier might
build a new refinery to treat products
that they might otherwise sell us.”
The bio-energy trader’s strategy of not competing head-on with the giants
in the commodities supply chain is paying off. BY MELISSA TAN
A
BOUT to throw
away your used
cooking oil?
Apeiron AgroCommodities
wants it.
Well, maybe
not in Singapore
just yet but certainly in the Middle
East, where the bio-energy trader recently teamed up with a unit of Dubai-based conglomerate Lootah
Group to collect used cooking oil in
the United Arab Emirates. It has also
started collecting used cooking oil in
Indonesia and aims to start collection
in other countries in Asia soon, including the Republic.
Apeiron has set its sights on used
cooking oil as a new potential growth
area for its trading business, having already carved out a niche in other biofuel platforms, says the firm’s
co-founder and director Chris Chen in
an interview near his office in Clarke
Quay. “Instead of it being recycled illegally, we can use it for producing biodiesel. There’s a very sustainable angle to this product.”
The company buys and sells physical goods such as palm oil-related and
soyabean oil-related products that
can be turned into biodiesel, a kind of
fuel that can be used in diesel engines. Biodiesel is its biggest revenue
segment.
It also trades in biomass, a segment that includes supplying wood
pellets to be burnt by power plants.
While it is still too early to say if
used cooking oil will become one of
Apeiron’s major business segments,
the company is “quite aggressively”
looking at this area, Mr Chen says, noting that a recent slowdown in demand from China means greater urgency for the company to expand and
diversify into more products within
the bio-energy space.
The firm’s move to target used
cooking oil as a source of bio-energy
is part of an overall strategy of not
competing head-on with the giants in
the commodities supply chain.
As an illustration, in Malaysia or Indonesia, the supply of used cooking
oil as a feedstock for biodiesel might
be 1,000 tonnes compared with
100,000 tonnes of palm oil as feedstock, Mr Chen says, though he notes
that if ever the biodiesel segment
grows too lucrative, Apeiron may be
acquired by a bigger player.
“We pick our battlefields carefully
. . . we try to identify products that
are non-mainstream, something
that’s not worth the big boys’ time to
look at.”
That strategy seems to have paid
off so far for the firm, which Mr Chen
and business partner Richard Huang
started in July 2007 with “zero capital”, a makeshift office in Mr Chen’s
parents’ house and virtually no experience in physical commodities trading
– let alone the fairly niche area of
bio-energy trading. The two were
former schoolmates.
“We started exploring areas and
identified biodiesels as an industry
with good growth potential,” Mr Chen
recalls. “There was big hype about it
(biodiesels) back then, so we thought
it would be good to be the first mover.”
Luck also smiled on them. “We
didn’t do much planning, we just
thought we’d give it a try. Fortunately
we went in at the right time . . . there
were pretty volatile price movements. Over 2007 to 2009, prices
could move up or down by a few hundred per cent over a few months.”
It helped a little that Mr Chen previously worked as a proprietary trader
in Manhattan since the fundamentals
of trading are pretty much the same,
he recounts. But the kind of trading
Apeiron engages in is completely different from “facing the computer every day”, he says, noting that he now
does much more face-to-face meetings with suppliers and clients.
FIRST DEAL
The learning curve was steep. “We did
a lot of cold-calling in the beginning
. . . learnt almost everything on the
job. Apeiron is purely physical, moving products from point A to point B.”
The partners started out by looking for suppliers in Asia. Mr Huang
worked in the chemicals industry before co-founding Apeiron and had
some relevant knowledge, plus fluency in Bahasa Indonesia, something
that was to Apeiron’s advantage.
Apeiron managed to clinch its first
deal, which was between a seller of
glycerine in Indonesia and a buyer
from China, within just three weeks
of inception.
After that, other deals started rolling in via word of mouth.
“We were one of the first few traders to approach some of our suppliers
so they could have been more willing
NEW PLANTATIONS
Mr Chen is bullish about the future of bio-energy, citing declining costs
and a rise in regional demand for clean energy amid oil price swings and
worries about the hazards of nuclear energy. PHOTO: ARTHUR LEE
to give newcomers a chance. Timing
was also important because at that
time, the first product was newly traded and supply was scarce.”
From that point, the company gradually started to trade more products
within the bio-energy space as suppliers became more comfortable with
Apeiron and asked it to help source or
sell related products, Mr Chen says.
It subsequently branched out into
South America, Europe and the Middle East and now has offices in Indonesia, Dubai, South Korea and India. It
has six employees in Singapore and
slightly less than 30 worldwide. Although it also tried to set up a representative office in Brazil early on, that
turned out to be difficult due to the
language difference and time zone,
so it decided to work with a “trading
partner” in that country instead.
While Apeiron’s suppliers are mostly in Asia and South America, its buy-
ers are mostly in China and parts of
Europe such as Rotterdam, Britain
and Spain. It also has customers in India and Africa. Altogether, Apeiron
has a presence in 15-20 countries, Mr
Chen estimates.
Although the bio-energy trading industry is fragmented, he says the
company keeps its edge through customer service – “and, of course, competitive pricing”.
“From day one, we realised that
trading is quite globalised; you can
get bypassed pretty easily and many
people can contact suppliers and buyers directly. So value-add is very important, customer service is very important,” Mr Chen says.
On the supplier side, “we give
them top-notch market info”, he
adds. Logistics is also key in trading
so the firm provides “full-fledged” logistics services.
Maintaining a good reputation in
The firm is hoping to tender for
long-term contracts to supply biomass to power plants in Asia. It also
plans to build its own refining facility
in South-east Asia so that it can also
manufacture biodiesel, and has invested in six to nine-month time charters for chemical tankers for liquid
storage.
Mr Chen remains bullish on the future of bio-energy, citing steadily declining costs and an uptick in demand
for clean energy in the region amid oil
price swings and worries about the
hazards of relying on nuclear energy.
The supply of palm oil has also
been growing “tremendously” over
the past few years, he says. “New plantations the size of Singapore are being
developed. For palm, there’s only so
much that the cooking oil market can
absorb, so it has to grow into other areas such as biodiesel.”
Some countries in Asia already require biofuel to make up a certain minimum percentage of total fuel and
that percentage could grow over the
next five years, he says. Indonesia, for
instance, mandates a “B10” biodiesel
programme that involves a blending
rate of 10 per cent palm methyl ester
and 90 per cent diesel.
Apeiron, a first-time E50 award
winner, is also keeping an eye out for
mergers and acquisitions, and a possible listing down the road.
[email protected]
@MelissaTanBT
ENTERPRISE
50
2015
| 19
Overcoming limitations
EPS Computer Systems’ blend of HR and IT knowledge gives the group
its strong competitive advantage. BY MINDY TAN
F
OUNDER and chief
executive of EPS
Computer Systems
Kevin Liang is unabashed about using
off-the-shelf software to automate
his firm’s work processes and store important business
data. Despite this jarring mismatch –
the group, after all, has on hand its
pick of IT talent – it is precisely this
ability to think outside the box that
has transformed the group’s business
model into what it is today.
There is no need to reinvent the
wheel, states Mr Liang. “These are market-leading software so it doesn’t
make sense for us to develop our
own, especially with cloud-based (programmes) – these are done by
third-party providers and are very
convenient and easy to use (so) rather
than we reinvent the wheel, we use
these products.”
He is also quick to accept that his
group has its limitations – not that
that stops him from rising to the challenge.
“Investment in state-of-the-art IT
infrastructure and equipment is very
expensive with high depreciation
costs. EPS does not have the financial
muscle to invest in world-class IT infrastructure to meet the standards of
global companies,” says Mr Liang.
Recognising this limitation, but
not willing to limit himself to smaller
projects, Mr Liang, in tendering for a
project which would require EPS to
provide support for a global network,
coined the term “joint outsourcing”
more than a decade ago.
This essentially required EPS and
its client to enter a collaborative partnership in which the client, itself a global IT company which produces laptops, desktops, printers and accessories, would supply the facilities and infrastructure while EPS would deliver
the full suite of services.
UNKNOWN BRAND NAME
The “accidental entrepreneur”, as Mr
Liang calls himself, started EPS Computer Systems in 1993. Then, the
company’s mandate was to offer customised software solutions and IT
consultancy services in executive information system and decision support system.
“Although this was a growth area
at the time, I soon realised it is not
easy to run a startup with limited capital and an unknown brand name,
even though I was doing well previously as a salaried employee in the
corporate world,” says Mr Liang.
Within three years, he decided to
change the group’s business model
to providing IT talent management
and IT outsourcing services, riding
on the strong demand for IT talent
driven in part by millennium software bug fixes.
In 1997, he decided to expand the
business by starting another entity –
EPS Consultants Pte Ltd – to offer recruitment and executive search services for both the IT and non-IT sectors.
Today, the EPS Group comprises
five legal entities in Singapore and Malaysia. In addition to recruitment and
executive search (provided through
EPS Consultants), the group offers
contract staffing services, IT talent
management, IT outsourcing, IT technical support services, and business
process outsourcing.
Of its more than 500 employees,
over 400 are IT professionals. But it is
the blend of human resources (HR)
and IT knowledge that gives the
group its edge, says Mr Liang.
“Our business management team
and staff possess substantial HR and
“I believe the
demand for IT
talent will remain
strong because with
every technology
change, new
skill-sets will be
required to develop
and customise new
applications using
new tools.”
EPS Computer Systems CEO
Kevin Liang
IT knowledge and experience, and
this ‘hybrid’ combination gives us a
strong competitive advantage as we
are able to communicate effectively
with our customers using the same
technical language.”
Looking ahead, Mr Liang has plans
to set up operations in three other
countries – Indonesia, Thailand and
the Philippines – in 2016.
“We are already in talks with some
target companies – the arrangement
is likely to be M&A (merger and acquisition), failing which we will set up directly on our own,” says Mr Liang.
“With our strong business base
firmly anchored in Singapore and Malaysia, and the emergence of an Asean
common market, we want to expedite
our presence in the other countries of
Asean, which is expected to be a
strong growth region in the years to
come,” says Mr Liang.
In addition to Asean, the group has
its eye on economies including Australia, China, India, Japan and Taiwan.
“With a stronger regional presence, we will be able to pitch for larger projects and contracts to deliver
our services to our global and multinational clients who may demand a region-wide service level rather than
just in-country ones. This allows us to
raise our profile and to compete and
succeed better in the marketplace.”
He adds: “I believe the demand for
IT talent will remain strong because
with every technology change, new
skill-sets will be required to develop
and customise new applications using new tools.
“In addition, the demand for services such as IT outsourcing and business process outsourcing will remain
strong as companies see value in outsourcing these services to service providers and partners who are expert in
these fields and can deliver these services in a cost-effective manner.”
[email protected]
@MindyTanBT
Mr Liang plans
to set up
operations in
Indonesia,
Thailand and
the Philippines
in 2016. “With
the emergence
of an Asean
common
market, we
want to
expedite our
presence in
the other
countries of
Asean, which
is expected to
be a strong
growth region
in the years to
come,” he
says.
20
ENTERPRISE 50
| 2015
Harnessing
the power
of digital
disruption
Companies that will emerge victorious in the
competitive stakes are those that are designed
for disruption and have a nimble architecture to
implement innovation. BY CHIU WU HONG
Digital technology, which is
disrupting Old Economy
industries, is transforming
markets and will lend value to
firms that master it. PHOTO:
FREEIMAGES
S
UBTLY exerting a new
way of doing business and responding
quicker to market
changes than before,
it is something that is
putting pressure on
enterprises in Singapore and around the world.
Digital technology today is rapidly
transforming markets and will lend
value to the companies that master it.
Today, digital technology is seen to
be flooding every sector and disrupting Old Economy industries.
In the case of Singapore, an economy driven by consumers who are increasingly empowered and spoilt for
choice, enterprises must find ways to
stand out from their competitors and
create tighter bonds with their customers. Factors such as fluctuating
market dynamics, growing competition and increased customer expectations also come into play and make it
tougher for local enterprises to stand
out from the crowd.
This year, many of our Enterprise
50 (E50) companies leverage on technological innovation to drive digital
transformation across their businesses. The champions in the competitive
stakes will be those enterprises that
are designed for disruption, have a
nimble architecture to implement innovation and deploy technologies
that mobilise the work process.
AN ENTERPRISE-WIDE
DIGITAL STRATEGY
Digital transformation, if not well
thought through, can prove to be misdirected or difficult to follow
through. Designing the strategy will
involve defining what "digital disruption" means to the organisation at all
levels, accounting for the range of
threats and opportunities, and devising a system to tackle implementation challenges.
■ Weaving innovation into
products and services
For sustained visibility, local enterprises will need to continue creating
innovative products and services. Enterprises should merge and apply
technologies that will allow them to
undercut rivals, get closer to customers and disrupt conventional ways of
doing business.
Past E50 winner Victor Enterprise
has invested steadily in productivity
improvements with support from
Spring Singapore. Some of these enhancements include a transport management system with GPS technology
and a virtualisation project to realise
the potential of cloud computing for
better business continuity management.
Sales personnel also benefit
through smart technology such as
iPads to realise greater manpower efficiency and optimised workflow.
■ Having an international mindset
Local enterprises will need to be
adaptable to suit international markets and adopt a global mindset. For
effective decision-making and business plans, they will need to equip
themselves with solid data and research covering technology, culture
and strategy. This will allow them to
penetrate new markets and think of
new ways of doing business that
could be foreign to how they did
things done previously.
■ Having a scalable and
moveable process
Enterprises need to focus on transformation and ensure their business is
compliant and savvy with the latest
trends in the industry even if it may
require significant restructuring.
This will largely rely on an agile development process that is able to
quicken the pace as well as partnering
IT and business strategically to test
and develop vibrant ideas.
❚ Continued on next page
ENTERPRISE
50
2015
| 21
Harnessing the power of digital disruption
■ Developing adequate skills and
new talent to stay relevant
The skills required to manage digital
transformation may not always be cultivated within the organisation. Being
able to meet the challenges brought
about by digital disruption may involve understanding innovative technologies that similarly call for new
skillsets.
Some leading companies turn to
other industries to attract digital talent as skills may often trump experience. For instance, those most skilled
at digital product management or user-experience design may not work in
one’s given industry.
A holistic attitude towards talent
retention should be taken by the business owners and not left to the human resources department. They will
need to continue investing time and
effort in skills-building, hiring and
corporate culture.
■ Dealing with data diligently
Enterprises will need to make rapid
decisions in today’s fast-moving digital environment. Those which maintain their competitive edge in the digital stakes are those that use data to
drive decisions and insights.
They will need to work towards
continuous improvement through
consistent experimentation and a
seamless process for responding to
bits of information quickly.
For example, a global fast-moving
consumer brand created a single analytics portal, the Decision Cockpit,
which lets teams identify issues such
as declining market share and also allows them to make predictions over
historical data.
In order for local enterprises to
move forward, they need to challenge
everything they have done, including
the products and services offered and
the markets they target or penetrate.
This includes re-evaluation of all
aspects of their business – from customer-facing to back-office systems
and processes – for digitally driven innovation. Digital leaders of enterprises will also need to find ways of creating partnerships to deliver value-added experiences and services.
■ Embracing the new
customer experience
As the emergence of millennials and
use of new technologies come into
play, customer experience is increasingly important. Organisations
should incorporate customer-centric
factors into developing their digital
strategy. Enterprises need to be dedicated to enhancing the customer experience as the foundation of any digital transformation.
Errors or negative user experience
need to be nipped in the bud. There
should also be systems in place to enable companies to capture and learn
from every customer interaction.
Enterprise leaders should also encourage risk-taking and a culture of innovation for employees to feel confident to articulate their ideas and be
willing to experiment with them.
Being customer-centric builds customer retention and advocacy and
this goes hand in hand with business
process optimisation that helps firms
to stay viable and relevant. These
when complemented will allow enterprises to better meet their customers’
needs and build long-term relationships.
CHANGE IS CRITICAL FOR
DIGITAL GROWTH
Local enterprises must continuously
Local enterprises
must continuously
change their existing
practices, systems
and attitudes to
maintain
management vigour
and a competitive
edge in a rapidly
changing business
environment. They
will need to go from
satisfying to exciting
customers and
reinvent themselves
to deal with
uncertainty and
complexity.
change their existing practices, systems and attitudes to maintain management vigour and a competitive
edge in a rapidly changing business
environment. They will need to go
from satisfying to exciting customers
and reinvent themselves to deal with
uncertainty and complexity.
In today’s digitized world, our E50
companies understand that they
must capture new opportunities to
drive growth and innovation.
Through collaboration and innovation and by harnessing the potential
of technology, they have ignited
change and seen their solutions perfected and assets perform better.
The industries in which these enterprises operate will also transform
to meet stakeholder requirements, acquire the appropriate skillsets and
adopt new business models for sustained and enduring growth.
Local enterprises that do not transform into differentiated digital companies with innovative attributes may
be in danger of becoming the disrupted and dreaded.
The writer is head of enterprise at
KPMG in Singapore. The views
expressed are his own.
As the emergence of
millennials and use
of new technologies
come into play,
customer experience
is increasingly
important.
Organisations
should incorporate
customer-centric
factors into
developing their
digital strategy.
Enterprises need to
be dedicated to
enhancing the
customer experience
as the foundation of
any digital
transformation.
FILE PHOTO
22
ENTERPRISE 50
| 2015
House of Kids
principal
Josephine
Cheong
leverages
technology
to help
run the
preschool.
PHOTO:
LAURA NG
Smart
technology
makes its
mark in
preschools
To better manage its
processes, House of
Kids has turned to a
tool that helps with
the routine
administrative tasks
H
OUSE of Kids,
a preschool
situated in a
quiet and
peaceful area
of Yio Chu
Kang, was
founded in
1999 with the aim of providing a holistic programme to help each child
grow physically, intellectually, emotionally and socially.
The preschool believes it is important that every child experiences the
joy of learning, the companionship of
friends and the benefits of a loving
and safe environment.
House of Kids currently has 80 children ranging from infants to those at
K2 level and it recently acquired a second centre that has another 80 students.
To help it better manage its processes and focus on teaching, the
school has turned to technology,
which provides it with the ability to
manage its daily tasks more efficiently as well as allows parents to be connected and receive live updates of
their child’s activities through realtime information.
House of Kids, which has been in
operation for 16 years, discovered
the benefits of using the approved
SaaS, or software as a service, preschool solution during the Infocomm
Development Authority of Singapore
(IDA)’s Call for Collaboration with the
Ministry of Education and Ministry of
Social and Family Development. This
was before the Early Childhood Development Agency (ECDA) was formed.
To-date, the preschool has used
the LittleLives preschool management system for almost three years.
One of the issues faced by House
of Kids was that communicating with
parents weekly or even on a daily basis was the level of service that parents expected from preschools. This,
however, can be quite tedious for
teachers as they have a limited time allocated during the children’s naptime to manage all their administrative tasks.
Enter the LittleLives, Little Family
Room, a tool developed by LittleLives.
This solution allows preschools to
take attendance and the children’s
temperature and input all that information into the system without the
hassle of having to deal with multiple
files and paperwork.
A tool developed by
LittleLives allows
preschools to take
attendance and the
children’s
temperature and
input all that
information into the
system without the
hassle of having to
deal with multiple
files and paperwork.
ENTERPRISE
50
2015
| 23
Smart technology makes it mark in preschools
Through the LittleLives system, preschools are able to receive instant notification on attendance and other data relating to the children.
This real-time information enables
teachers to effortlessly manage their
routine work while allowing parents
to find out more about their child’s
learning activities, notes the founder
of LittleLives, Sun Ho.
The Singapore-based preschool
provider was founded in 2007. The
LittleLives Preschool Management
System has been deployed and used
by 558 preschools in Singapore. Some
of these include Brighton, Kiddiwinkie, Pibos, Little Footprints and Odyssey.
LittleLives has reached 83,000 children, 11,000 parents and 5,500 teachers islandwide, helping to bring preschools into the 21st century.
LittleLives SaaS is supported under IDA’s iSPRINT Programme which
assists small and medium enterprises
(SMEs) in the adoption of technology
for productivity and growth.
“LittleLives Preschool Management System has allowed preschools
in Singapore to use technology for
their advantage. Teachers at preschools have an important role in the
development of a toddler and LittleLives allows teachers to focus on
what they do best – teach,” she says.
In addition to administrative reports, the system allows House of
Kids to provide parents with a range
of updates, including the daily checkin and check-out photos of their children and a portfolio management
folder where parents can find out
what their child has learnt via videos
and photos.
Specifically, the Check In/Out Application enables parents to see if
their child is safe in school and when
their child leaves the centre. This
gives parents a sense of security as
they can make sure that their helpers
have picked up their child from
school.
Parents can also log in to the
Parent’s Portal at any time and from
anywhere to keep track of their
child’s learning progress in school,
says Josephine Cheong, principal of
House of Kids.
CUSTOMER SUPPORT
The system also allows the school to
update parents on upcoming events
via the event calendar.
“Working with LittleLives has been
a joy and allowed me to better manage my centre more efficiently and
the various LittleLives reports are
very useful during our ECDA centre licensing audits. This ensures we are in
line with the preschool standards of
Singapore,” says Ms Cheong.
LittleLives was chosen by House of
Kids mainly because it was approved
by government bodies such as the
Ministry of Education, Ministry of Social and Family Development and
IDA. Ms Cheong also notes that during the past two years of service, the
team from LittleLives has provided
great customer support and an
easy-to-use system.
Indeed, this incorporation of technology has enabled House of Kids to
improve its overall productivity and
alleviate its pain points.
Parents also enjoy receiving timely
updates from teachers while teachers
spend less time doing administrative
tasks and can focus more on guiding
the children.
Not that it was all smooth sailing.
Cost was an initial issue for House of
Kids, as profit margins in preschools
can be low.
Implementing technology, however, has not only helped House of Kids
save time on administrative tasks but
also enables the preschool to be environmentally sustainable by saving on
printing and paper wastage.
“Teachers at
preschools have an
important role in
the development of
a toddler and
LittleLives allows
teachers to focus
on what they do
best – teach.”
Sun Ho, founder of LittleLives
It recently re-contracted with LittleLives, citing the fact that the SaaS system has enabled teachers to focus on
what’s truly important, that is, teaching.
“We have since re-contracted with
LittleLives and we hope that the government can offer more such grants
to help preschools like House of Kids
enjoy the benefits of technology.
With increasing operating expenses
in terms of manpower and rental
costs, every grant from the government does make a difference and
helps SMEs like us grow,” says Ms
Cheong.
House of Kids exemplifies how
technology can lead to productivity
for SMEs. Government programmes
such as IDA’s Enhanced iSPRINT have
made it possible for SMEs to incorporate technology and improve their
overall workflow processes.
Large chains and anchor operators
enjoy economies of scale but single
centres like House of Kids have to ensure that their cash flow is always in
the green. Hence, these government
subsidies make it easier for SMEs to
adopt technology.
This article was contributed by IDA
In addition to
administrative
reports, the
system allows
House of Kids to
provide parents
with a range of
updates, including
the daily check-in
and check-out
photos of their
children and a
portfolio
management
folder where
parents can find
out what their
child has learnt
via videos and
photos.
24
ENTERPRISE 50
| 2015
What’s in store for SMEs in 2016?
A challenging
environment of rising
costs, a manpower
crunch and greater
competition will
continue to beset
companies.
BY CHIU WU HONG
Leveraging
automation
and training
staff are
among the
key practices
companies
will continue
to use as they
expand their
efforts to
lower costs.
FILE PHOTO
I
T HAS been five years since
the government announced its long-term economic strategy of improving productivity in Singapore. Latest figures from
the Ministry of Manpower
show that the Republic’s
employment numbers are falling, in
line with the current economic restructuring, but part of that transition
towards a manpower-lean economy
driven by productivity is still stuck in
reverse.
Despite governmental efforts to
boost productivity growth, the Ministry of Manpower (MOM) figures
showed that labour productivity has
fallen for the third consecutive
six-month period with the manufacturing, services and construction industries struggling to rise to the challenge of a tighter labour supply.
Singapore’s overall productivity
growth “is not likely to see a significant uplift this year”, noted the MOM,
which projected that “some consolidation and exit of less-productive businesses is also expected” as the economy restructures.
A recent SBF-DP SME Index showing that small and medium-sized enterprise (SME) optimism hit a threeyear low in the second quarter indicates that high business costs and the
manpower crunch, along with greater
competition, rapid technological advances and more demanding customers, may even have exacerbated SMEs’
worries during the course of this year.
The key question on the minds of
many SME executives, then, is what
lies ahead for 2016 and how to succeed in such a challenging environment.
SOLVING THE
TALENT SHORTAGE
Finding staff and managing a multigenerational workforce will continue
to be a challenge in the year ahead, as
the government has said it will still
limit the hiring of foreign workers.
SMEs look set to embrace new HR and
hiring models in 2016, however, to
help alleviate the shortage of talent.
The trend towards hiring freelancers and contract workers both domestically and overseas to support business in Singapore looks set to grow,
as it can enable organisations to meet
manpower needs, reduce cost pressures and increase flexibility.
Some SMEs have hired staff overseas in locations such as the Philippines or Vietnam to support their
businesses in Singapore while others
are reaching out to organisations
such as oDesk or Guru.com for outsourced support for everything from
website development to graphic design.
Human resources (HR) departments will also put more effort into
upgrading their capabilities in the
year ahead so that they can attract, engage and retain talent better.
Along with building a talent pipeline to prepare for growth, SMEs are
working to strengthen their talent
management capability, understand
the career aspirations of today’s workforce and develop more creative ways
to reward good performance such as
profit sharing or support for
employees’ further studies.
More companies may also follow
the lead of innovators such as Yang
Kee, which has set up an in-house
training academy, increased automation and established facilities such as
childcare services in order to increase
productivity and retain staff.
MANAGING RISING COSTS
From rent to salaries, cost increases
for SMEs in Singapore are seemingly
relentless and SMEs can expect the
trend of rising costs to continue in
2016.
SMEs are looking intensely at all
parts of their operations as they focus
on how to squeeze costs for everything from postage and paper to laptops and salaries, and that focus is
likely to grow over the coming year.
Training staff and leveraging automation are among the key practices
companies will continue to use to reduce the costs for office space and
staff as they expand their efforts to
lower costs.
An increasing number of SMEs
may well take advantage of the trends
to let staff work remotely as part of
the efforts to reduce rent and use
cloud-based technology solutions for
services ranging from accounting to
office software to reduce technology
costs.
ENTERPRISE
50
2015
| 25
What’s in store for
SMEs in 2016?
Companies are likely to participate in
workshops that help them identify opportunities to further reduce costs as
well as to participate in programmes
run by non-profits such as the Workforce Advancement Federation or ASME (Association of Small and Medium
Enterprises).
LEVERAGING TECHNOLOGY
The relentless focus on productivity,
as well as manpower constraints,
have compelled companies to automate and to use technology better.
SMEs by and large need to master
mobile, analytics and cloud computing in order to gain a competitive
edge in an overcrowded industry and
successfully deliver what customers
are seeking.
Through adopting technology and
making it fit for purpose, SMEs can
boost innovation, strengthen customer interactions, improve their
business’ agility and competitiveness
and develop a reliable and unique relationship with their markets.
Being able to leverage technology
and build innovation successfully
will also help SMEs bridge the gap between venture creation and knowledge creation. This will also help
them to accelerate the conversion of
ideas to market-ready enterprises.
The government has supported
these initiatives in recent years with
grants such as the Productivity and Innovation Credit (PIC), Capability Development Grants (CDG) and the
SkillsFuture Earn and Learn Programme, which provide funds for
SMEs to install new technology to increase productivity and train their
staff.
These programmes are likely to
continue into 2016 and beyond, and
more programmes may be on the
way.
A recent DP Info SME Development
Survey found that a growing number
of SMEs are indeed embracing technology and innovation to improve productivity, and about 50 per cent also
plan to use technology to increase
production capacity.
From sushi-making machines and
self-service ordering in restaurants to
courier service automation such as
Rocketuncle and advertising increasingly moving to social media, technology is already making an impact and
more technology solutions will be implemented during the next year.
CREATING OPPORTUNITIES
FOR EXPANSION
Along with growing their business domestically, SMEs are increasingly expanding their businesses overseas
and will have even more opportunities to do so in 2016.
The establishment of the Asean
Economic Community (AEC) at the
end of 2015, which is intended to
make it cheaper and easier to do business in the region, is likely to accelerate the trend as it makes regional expansion easier. Business operations
can, for example, be structured to use
the region as an integrated production base.
That growth would build on both
existing internationalisation by SMEs
– DP Info found that more than half of
SMEs already generate revenue from
overseas – and on government support for overseas expansion through
initiatives such as the Double Tax Deduction for Internationalization and
the Market Readiness Assistance
schemes.
Better utilisation of
incentives, more
pathways for
expansion and
partnerships and
schemes that nudge
SMEs to
internationalise will
attract and retain
competitive talent.
These will be the
promising new
leaders capable of
taking enterprises
into the next era
of growth.
BUILDING A BETTER
TOMORROW STARTS WITH
DELIVERING TODAY
When leading nations and businesses
seem to be falling behind in sectors
where they were once the dominant
players, there is a clear recognition
that the status quo cannot be maintained.
How does leadership create a work
environment and work-life balance
that will not only survive a crisis but
capitalise on today’s frequent and disruptive changes?
The answer is Change. SMEs need
to embrace change and this has to
start today.
SMEs need to be innovative and forward-looking in order to cope with
challenges as well as to succeed in the
domestic and regional markets. They
will need to introduce new strategies
to strengthen their value proposition
and remain attractive as an employer.
Amid a weaker global economy
and a leaner workforce, there are government initiatives in place to help
companies move towards higher
skills, innovation and productivity.
An example of this is the recent announcement by Prime Minister Lee
Hsien Loong about setting up a new
committee on “The Future Economy”.
The committee looks at how Singapore can continue creating opportunities and help workers and businesses
adapt amid a weaker economy and a
leaner workforce. Chaired by Finance
Minister Heng Swee Kiat, the committee reviews and revises policy measures that have been in place since
2010.
Better utilisation of incentives,
more pathways for expansion and
partnerships and schemes that nudge
SMEs to internationalise will attract
and retain competitive talent. These
will be the promising new leaders capable of taking enterprises into the
next era of growth.
The writer is head of enterprise at
KPMG in Singapore. The views
expressed are his own.
This article first appeared in The SME
Magazine, which is distributed with
The Business Times.
A customer at
a restaurant
ordering food
by tapping on
the item
displayed on
a tablet. A
recent survey
found that
SMEs are
embracing
technology
and
innovation to
improve
productivity.
FILE PHOTO
ENTERPRISE
50
| 27
2015
How to stand out in the marketplace
Singapore companies need to differentiate themselves in order to beat the competition and ensure long-term success
T
O survive and prosper in
the 21st century’s volatile business environment, Singapore companies need to implement a
sound strategy for innovation, branding and
managing intellectual
property that helps them stand out in the marketplace and gain a competitive edge.
Spring Singapore recently introduced a
raft of supportive initiatives to help companies do just that. These include five new Collaborative Industry Projects (CIPs) that will enable more than 400 SMEs (small and mediumsized enterprises) to integrate innovative technology solutions, such as radio-frequency
identification (RFID) and mobile marketing
tools, into their businesses to help them build
sustainable growth.
“Through the CIP initiative, we hope to increase SME adoption of technologies across
multiple industries,” says Chew Mok Lee,
Spring’s assistant chief executive.
“RFID, image recognition and mobile marketing technologies can not only increase
competitive advantage, but also help companies overcome high business costs and be
manpower-efficient.”
SMEs can also tap Spring’s Capability Development Grant (CDG) and Innovation & Capability Voucher (ICV) to upgrade their capabilities
and improve business productivity.
BUILD INNOVATION INTO THE
BUSINESS MODEL
Sometimes, companies do not need to introduce new products, services or processes to
get ahead of the pack. They simply need to
modify their business models. Because this
approach involves transforming the way companies deliver existing products made with existing technologies and sold in existing markets, it can be a more affordable way to improve profitability and productivity.
Take, for example, Adonis International, a
name synonymous in Singapore with quality
beauty and wellness treatments. Faced with
stiff competition from new market players,
the company realised it needed a fresh business concept. With the help of Spring’s CDG,
the company engaged a consultant and got to
work.
Adonis was introduced to design-thinking
(From left) Adonis International, urban greening solutions company Greenology and hair
salon Action are three SMEs that took steps to ensure that they offer something that is
truly unique, that grabs people’s attention, and cannot easily be copied. FILE PHOTOS
CREATE A STRONG BRAND
methodology – a creative tool for solving problems and discovering opportunities. With the
consultants’ help, it revamped its business
model and put its new approach into practice
at its luxury boutique hotel, the Adonis, which
launched in 2014.
The CDG helped Adonis defray up to 70
per cent of the cost of its business innovation
project, including consultancy fees.
Today, the company focuses on designing
unique guest experiences. On arrival, hotel
guests are greeted with a complimentary “Sunset Love” mocktail. And as part of the hotel’s
new 4B concept – bath, bed, breakfast and bar
– each room comes with a mini bar stocked
with complimentary organic beers.
Since implementing this approach, the hotel has received four-and-a-half-star ratings
on travel site TripAdvisor, and is projected to
contribute an additional 5 per cent to the
company’s overall sales in its first two years
of operation.
Brand development is another tool used by
successful companies to stay ahead of the
pack and increase market opportunities.
This was the solution local urban greening
solutions company, Greenology, turned to in
2013 when it realised its competitors were
replicating its eco-friendly products and selling them as their own.
Greenology decided it needed help building a stronger brand that delivered a more
consistent image to build consumer trust and
showcase the company’s value. Taking advantage of Spring’s CDG, it hired a brand consultant to help it map out a new brand story, vision and identity and revamp its marketing
materials, including brochures and the company website. The consultant also helped
Greenology develop a new strategy to market
its products, and position itself as a pioneer
of sustainable “green” walls in Singapore.
The strategy paid off. Greenology has
since received sales enquiries from a broader
customer base, and its total revenue has increased to more than S$2.5 million a year, up
from about S$800,000.
Today, armed with a new brand “attitude”
that’s more distinctive and appealing to customers, the company plans to expand its footprint to China, Malaysia and the Philippines.
PROTECT INTELLECTUAL PROPERTY
Intellectual property (IP) is a key asset for
most businesses. It underpins competitive advantage, is a source of revenue where it can be
licensed out or sold, and often accounts for a
large proportion of a company’s value.
And with businesses constantly under
pressure from increasing globalisation, competition and IP theft, the need for strong IP protection has never been greater.
These challenges prompted Action, a local
hair salon, to pilot an IP portfolio management system to track and manage its assets –
and especially its novel concept of a pampering hair spa. Without an IP rights regime, the
salon feared it would be powerless to prevent
other hair and beauty salons from copying its
idea.
With the support of a Spring ICV, the salon
implemented Scope-IP, an IP management di-
agnostic tool, to help it assess its IP deployment and management systems. This also
gave it a better grasp of IP commercialisation
options and intellectual property best practices.
Action also introduced non-disclosure
agreements and contracts for its international
partners and staff, and registered its trademark logo and brand. This allows a business
to gain statutory monopoly of its mark, and
protect its market share.
Today, armed with a strong IP regime, Action can state with confidence that its concept, products and services will not infringe
the intellectual property of others. As a result,
Action has seen a significant increase in enquiries from franchisees wanting to use its
business plan and brand name to operate independent branches both in Singapore and
abroad.
To survive in today’s volatile and challenging business environment, it is vital for companies, especially SMEs, to find ways to stand
out from the competition. It is by ensuring
that they are offering something that is truly
unique, that grabs people’s attention, and cannot easily be copied that companies can maintain growth and keep competitors at bay.
A version of this article first appeared in
SPRINGNews.
28
|
Published and printed by Singapore Press Holdings Limited. Co. Regn. No. 198402868E.
A member of Audit Bureau of Circulations Singapore. Customer Service (Circulation): 6388-3838, [email protected], Fax 6746-1925.

going global

Transcription

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