Lim Boon Chay
The road to success was long and arduous for Lim Boon Chay, managing director of Thong Siek Food Industry. The man who once peddled fishballs on the streets of Singapore in the early seventies has had many ups and downs along the way.
But today, Lim (pictured) is head of a seafood product manufacturing business that employs 220 people and grosses more than S$30 million (US$16.5 million) a year. And on top of this, Lim was named Entrepreneur of the Year 2001 by the Rotary Club of Singapore and the Association of Small and Medium Enterprises.
Amid the current economic downturn, Thong Siek is on course for its projected turnover of S$40 million for 2001 and S$50 million this year. The company exports 30% of its products to more than 20 countries including Australia, Britain, China, France, Hong Kong, Malaysia, Thailand and the United States. It plans to increase the export share of its turnover to 50% over the next three years.
Lim's business had humble beginnings with the fishball, a local favourite, as the mainstay. When he first set up shop in 1973, production in the backyard of his home in Changi Village in northeast Singapore was a crude affair; later, a grinder and mixer were brought in to speed up the process. Lim, then a relative newcomer to a business dominated by elderly people, actively sought to improve the quality of his product as well as to increase sales.
In 1981, three years after he registered Thong Siek as a business, he discovered surimi - minced, processed fish meat that has been through a washing process to remove the intestines. Against convention, he started importing surimi from Thailand to produce better quality, whiter fishballs and other products. That marked a turning point for Lim.
Another came in 1983 when he made a trip to study the industry in Japan. That proved to be an eye-opener. "It is a huge industry there and all the factories producing fishballs and other seafood products are very big," says Lim. "They use advanced machinery, the [frozen] products come in very good packaging and have a shelf-life of up to one year. It is big business. But we think of making fishballs only for a living, not big business, and our products keep only for two or three days. It changed my mindset."
He exchanged S$150,000 for a silent cutter to cut frozen blocks of surimi. Colleagues and competitors in the business thought he was "mad", Lim says, as such equipment was then unheard of - and it came at a prohibitive price. But it proved a productive investment as the machine could cut 100kg of surimi in an hour, where previously surimi was manually cut and ground, which was tiring and time-consuming. One reason for the growth of his business, the 50-year-old entrepreneur says, is that "our product is fairly recession-proof as it is a basic food". But Thong Siek has added value to fishball manufacturing through research and the use of technology. It is this push for knowledge and innovation that has helped the company to develop better, more innovative products in more productive ways.
Few who have tasted Thong Siek's DoDo brand of products would disagree. "Their products are good. The consistency of quality is there. I'm very impressed with the hygiene level on the factory floor," says Andrew Chua the managing director of enterprise banking at DBS Bank.
As business expanded, Thong Siek made a few critical moves. In 1991, it bought over the DoDo brand and business of a competitor for S$200,000, a strategic acquisition that was a stepping stone for Thong Siek's expansion into supermarkets from the wet markets. It was also a good fit because the company was then looking at branding and has since been aggressively building up its DoDo brand name, which is now quite well known in Singapore and the region.
"Thong Siek is quite innovative in coming out with new products and is very competitive. It has quality and branding and an aggressive team that has helped it to capture 30% of the local wet markets," says Tan Khieng Sin, managing director of Heinz Sinsin, a manufacturer of chilli and other sauces, who has pooled resources with Thong Siek to participate in some overseas trade exhibitions.
Automation meanwhile continued apace. In 1992 a fully automated chikuwa (Japanese-style roasted fish rolls) production plant was introduced. Another turning point, says Lim, was the installation in 1993 of a fully automated fishball/fishcake processing line, developed with the help of the Singapore Productivity and Standards Board. The company says it was the first in Southeast Asia to have such a facility. The automated line increases production from 8,000 fishballs per hour to 40,000, while at the same time requiring only two workers compared with six on a non-automated line. Another automated production line, capable of producing 450kg of crabsticks per hour, was added in 1997.
Thong Siek moved to its 6,500-square-metre factory in 1995, an investment totalling S$7 million including the building and equipment. It now processes more than 24,000kg of fish meat daily and produces more than 60 varieties of surimi-based seafood products.
It is also serving up healthier, "functional" fare with new products such as low-sodium fishballs, produced through a process that reduces salt content, but keeps the fishball springy; spirulina fishball, containing a nutritional algae that is said to reduce cholesterol, prevent cancer and increase immunity; Omega-3 crabstick, containing a fish extract that is believed to play a vital role in aiding infant development and regulating cholesterol levels. A research team, aided by Lee Yuan Koon, a lecturer in biotechnology and microbiology at the National University of Singapore, works at formulating such high nutritional value surimi-based products.
In Lim's books, people are just as valuable as the company's fixed assets. Recognising the need for good staff as well as technology, he has built up a strong team headed by general manager Dianna Kwek to help run his company. Kwek was brought in in 1993 because of her experience in the seafood processing business and her exposure to overseas markets.
"Thong Siek is a very well managed business and Kwek is a very capable assistant," says DBS' Chua. "If Lim can continue to build up a strong management team, then the company should be able to go places and there will be very good times for him."
Kwek credits Lim with being a man of foresight and ideas. "He makes use of information he has gathered to introduce new ideas like coming up with a range of healthy products," she says.
Banker Chua agrees: "Lim is a shrewd businessman. He knows his business very well, but he is very ready to listen to new ideas and to implement useful ideas."
In its 23-year history, Thong Siek has suffered some big setbacks. A rough patch occurred in 1991 when Thai suppliers doubled the prices of surimi. The company simply had to absorb the higher costs without raising prices because of fears it would lose customers.
The company suffered a S$2 million loss with the recent closure of its factory in Tianjin in northern China after three years of operations. "China is a difficult market. We cut our losses, but feel that there is still a market there and we will return when the time is right," says Kwek.
The company is aggressively seeking to expand its export market through overseas trade exhibitions and missions.
At the Entrepreneur of the Year Award in August, an event organised by the Association of Small and Medium Enterprises with the Rotary Club of Singapore, Lim came out tops.
What was impressive about him was how he has grown a traditional trade into big business, says Frankie Foo, co-chairman of the award organising committee, "A fishball is a fishball and costs a few cents," Foo says. "Who could imagine a fishball seller building a multi-million dollar business empire selling not only locally, but exporting to the world? Thong Siek is innovative and is forward looking."
Thong Siek Food Industry
14 Senoko Way
Singapore 758035
Tel: (65) 756-0233