People are the Plus point

Chen: The biggest stumbling block faced by mid-tier businesses stems from leaders with closed mindsets.

“PUTTING people before profit” is a core philosophy by which plastics manufacturing company LH Plus Sdn Bhd defines itself. Its chairman and CEO, Callum Chen, firmly believes that this ethos is a key factor that undergirds the success of the business and its ability to compete in the global market.

“We are always investing in our people,” says Chen. “We train our staff, upskilling and reskilling them so that as they progress in their career path, they also grow alongside the company.”

He adds that it is not enough to merely say that a company’s greatest asset is its people – leaders have to back up their words with actions by ensuring the needs and well-being of each employee is taken care of.

“It should be a culture in which you respect them and they respect you. You have to build bridges, not walls, and you have to walk the talk and not just pay lip service,” he says.

The 77-year-old LH Plus is one of the oldest plastic product manufacturing companies in Malaysia.

Specialising in original equipment manufacturing (OEM) and private label production, the business is recognised for manufacturing a range of high-quality products such as water bottles, food containers and medical devices.

Currently, about 95% of its output is exported to countries like Japan, the United States, Germany and Australia, which Chen says allows the business to spread out its geographical risk and balance its production throughout the year.

He also adds that the organisation is seeking to move up the value chain into higher value- added offerings.

LH Plus has certainly come a long way since its founding in 1947 by Chen’s father, the late Chen Kow Fatt. In a post-war economy where bicycles were ubiquitous, the founder saw an opportunity in the market and began producing bicycle parts out of recycled plastic items.

As raw materials were expensive and difficult to obtain at the time, the family-owned enterprise made use of ready-made plastic products like combs and hangers to create accessories like safety light reflectors.

The business then went on to innovate its own plastic injection moulding machines to meet its high standards of quality and consistency.

The next few decades saw LH Plus adapt and evolve to serve changing demands, manufacturing plastic houseware goods and going into exports through collaborations with international brands like Rubbermaid.

Projects included producing Barbie doll heads and building finished goods and parts for American plastic toy company Little Tikes.

Chen shares that the chance to work with toy brands like Little Tikes offered the company valuable learnings and exposure to global standards of practice.

“When creating baby products, everything is very strict, from the pigment to the material, they must all be FDA-approved. They can’t have sharp edges or small parts, and must go through drop tests to ensure there’s no choking hazard.”

While this presented more complex and challenging work for the business, Chen saw it as a positive opportunity.

“It was not a big order, but that also meant less risk for us. They were teaching us to be a better manufacturer, and we were essentially being paid to learn,” he reflects.

Today, this commitment to pursuing growth, improvement, innovation and consistent quality continues to run through LH Plus’ operations.

In 2018, the company embarked on a 10-year technology-centered transformation plan, which includes upgrading infrastructure to enhance energy efficiency, integrating automation and digitalising operation processes.

Chen reveals that the move towards automation has resulted in an output increase of 30% and a man-hour reduction of 200%, helping the company remain competitive in a modern age.

“More importantly, it ensures consistency of quality and yield,” he adds. “We are fortunate to be doing low-mix high-volume manufacturing, which lends well to automation.”

As part of its digitalisation and connectivity journey, LH Plus has implemented an ERP (enterprise resource planning) software system, and plans to introduce a warehouse management system and quality management system into its operations.

“Without digitalisation, you don’t have big data. Without big data, you cannot make informed decisions,” he notes.

When it comes to the top challenges faced by mid-tier businesses, he opines that the biggest stumbling block stems from leaders with closed mindsets.

“They’re not willing to change, and due to ego and pride, they don’t want to admit when they’re wrong and continue down the wrong direction,” he stressed.

Chen, who is also the honorary president of the Malaysian Consortium of Mid-Tier Companies, adds that the second most pressing issue these companies encounter revolves around the matter of succession planning.

Ensuring that successors are of a high calibre is critical to the long-term continuity of a business, and at the family-owned LH Plus, Chen is adamant that promotion to leadership positions must be based on contribution and merits rather than familial ties.

“Many of our staff members have been with us a long time. We give them a career path, groom them and empower them to take ownership of their roles,” he says. “I make an effort to step back and trust their judgement. My job is to support them with the right tools.”