Branching out into food sauce production - News | The Star Online

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Branching out into food sauce production


(Left) Koh (right) giving an employee a few pointers at the office. — ASRI ABDUL GHANI/The Star

(Left) Koh (right) giving an employee a few pointers at the office. — ASRI ABDUL GHANI/The Star

ALOR SETAR-based entrepreneur William Koh, 38, is ready to take his special homemade food sauces to the global market.

He expects the sauce business to take International Trading Profile (M) Sdn Bhd (ITP), a company specialising in the trading of resin and special chemicals used in food packaging, paint, electronic and water treatment industries, to new heights.

“After eight years in the trading business, we are now ready to venture into the food sauce business.

“My family in Alor Setar has several recipes for making spaghetti, tomato and chilli sauces, as they have been involved in the food sauce business for over 20 years. We will use these recipes for our sauces.

“The business should start in late 2019 or early 2020, once the food sauce manufacturing facility in Batu Kawan is completed,” he said, adding that construction work for the facility on a 0.8ha land was expected to start next year.

Raw materials such as yeast are used in the making of soy sauce and other food sauces.
Raw materials such as yeast are used in the making of soy sauce and other food sauces.

ITP bagged the gold award for Best in Corporate Social Responsibility at The Star Outstanding Business Awards (SOBA) 2016.

According to Koh, about RM10mil would be invested in the business, which would include plant and machinery.

“We will use imported computerised technology for testing the quality of the sauces,” he said.

The food sauce manufacturing business would help the company achieve RM500mil in revenue for the company in 2021, he added.

“We now have the necessary networks to promote our food sauce products.

(Right) Titanuim dioxide white powder, one of the chemicals the company trades in.
Titanuim dioxide white powder, one of the chemicals the company trades in.

“ITP’s trading activities have created new contacts and networking that could be used to market our food sauce products,” Koh said.

One of the targeted markets is Turkey, where ITP already has a strong trading network for selling resin and chemicals used in a variety of industries.

“We will use our networks in Turkey to promote our food sauces.

“Turkey is an important stepping stone into the European market.

“In Asia, we also have very strong established networks,” Koh said.

International Trading Profile, which trades in resin and special chemicals used in food packaging, is venturing into food sauces.
International Trading Profile, which trades in resin and special chemicals used in food packaging, is venturing into food sauces.

The increased use of spices in multi-cuisine cooking, he added, has driven the demand for sauces, condiments and dressings.

“For example, fusion food, now fashionable in Asia, is a growth driver of a wide range of sauces, spices and condiments.

“The demand for natural and organic-based products and product innovations would provide the potential for further growth.

“The food sauce industry is fragmented in developing regions and there are concerns over product labelling and ingredient quality, which are barriers that need to be overcome today.

“The imported computerised technology will assist in the production of higher quality food sauces,” he said.

Cooking sauces such as dry and pasta sauces as well as herbs and spices account for the majority of the market share, followed by table sauces and dressings.

“Dips and pickled products are expected to show the highest growth potential,” he added.

The company specialises in the trading of resin and special chemicals used in paint and water treatment industries.
The company specialises in the trading of resin and special chemicals used in paint and water treatment industries.

According to India-based research firm Mordor Intelligence, the global market for sauces, condiments and dressings is expected to cross the US$37.6bil (RM157.9bil) mark by 2022 at a compounded annual growth rate of 4.7%.

“Sauces, condiments and dressings have been an integral part of the global food culture.

“The growing urbanisation, high disposable income and increased interest in multi-cuisine culture are expected to drive the market for these products,” the report said.

ITP will not shift its focus entirely to food sauce manufacturing, as it is retaining the trading division as a core business.

“ITP is very well-positioned to expand its trading business with a strong double-digit percentage growth rate annually,” he said.

Koh added that ITP is involved in more than just trading activities.

“We also provide solutions for our trading partners – the producers of chemical products and their customers.

“There are many foreign small to medium-sized enterprise (SME) petrochemical and chemical producers who have networking constraints in marketing their products in Malaysia,” he said, adding that the SMEs form about 30% of its customers.

ITP helps these producers to sell their products in Malaysia, thus saving them the cost of investing in marketing activities.

“We also act as a middleman to negotiate for a selling price that is attractive for the producers and their customers.

“In other words, we try to find a win-win solution for both parties,” he added.

The producers are always looking to sell at a higher price, while the customers are always looking to buy at a competitive price.

Ready for action: International Trading Profile (M) Sdn Bhd executive director William Koh Hai Min is poised to venture into the food sauce business. —ASRI ABDUL GHANI/The Star

“Our revenue is generated from a rebate that we get from the resin and chemical producers for successfully getting the required volume of business for them on a regular basis.

“They need a specific volume of orders for them to break even before they can offer an attractive price to customers.

“With our strong customer base, ITP is able to deliver the necessary volume of business for SME producers,” he said.

The company also helps foreign SME producers overcome the language and cultural barriers that would come with marketing on their own in Malaysia.

Besides SME producers, ITP works with Fortune Global 500 companies worldwide, comprising about 70% of its customers.

According to Koh, the resin and chemical trading and food sauce manufacturing business will play an equally important role in driving the company’s growth.

“ITP will establish offices in Indonesia, the Philippines, Vietnam, Thailand, Myanmar and Turkey by 2020 to promote our trading and food sauce business.

“We aim for our food sauce to have a strong presence in the Asian market in five years,” he said.

ITP aims to generate about RM100mil in revenue for 2017, compared to RM70mil in 2016.

“We are targeting to be a RM500mil company by 2021,” he added.

Koh said ITP plans to expand its resin, chemical and food sauce business to new markets such as Brazil, Mexico and Africa.

“This is part of a long-term business plan, which is to tap into the emerging markets,” he said.

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