Wearing a hat of the right size

Coming to terms: Dont wear a big hat if you dont have a big head, says Lee.

Coming to terms: Dont wear a big hat if you dont have a big head, says Lee.

OVERSIZED ambitions used to be a hindrance for Datuk Lee Ngai Mun.

But in building Proguard Technologies (M) Sdn Bhd from only RM560 – leftover cash from his wife’s hospital bill – into a company with an estimated value of RM80mil, Lee has learned not to wear a hat too big for his head.

Lee started his journey as an entrepreneur in 1988 on the day his eldest son was born.

There was another mouth to feed and he knew he needed something more than his job as a storekeeper to provide his family with a comfortable life.

“I had sent my wife to a private hospital to deliver the baby but I had no money for the medical bill,” he recalls.

Fortunately, his wife, Datin Cindy Choh, had RM2,000 in savings.

After the bill was settled, Lee used the remaining RM560 to start a hardware supply business. He printed his name cards and traded his van in for a truck that he could use to deliver stock. Their dining table served as an office space and they lived frugally – often sharing a meal for one.

“Times were bad then,” says Lee.

But over time, business grew. Their little company started making decent income of about RM10,000-RM15,000 per month.

Success is a double-edged sword, they say. And Lee started taking bigger risks. He wanted to double his turnover quickly.

“I became greedy,” he admits.

Sure enough, within a few months, the business encountered some financial difficulties. Lee had extended too much credit to his customers. His cashflow came to a halt and he couldn’t pay his creditors.

With nowhere else to go, he took up his mother’s advice and turned to his father for a lifeline.

Rise of the machines: The company is looking to automate as much of its processes as possible to increase productivity.
Rise of the machines: The company is looking to automate as much of its processes as possible to increase productivity.

The visit didn’t go down well.

“We went to a coffee shop and I told him that I was in financial difficulty. I wanted to borrow RM30,000. When I turn around the business, I will return the money.

“Immediately, my father raised his hands and said no. ‘All borrow but never return money’, he said out loud.

“Everyone in the shop turned and looked at me. I was a bit shocked. I haven’t even drank my Milo. I immediately got up and told him, ‘If you don’t want to lend me, it’s ok. Leave me some pride’. And I walked out,” Lee reveals.

He drove home in tears.

Although his mother comforted him, Lee’s problems remain. And once again, Choh came to the rescue.

“I suddenly remembered that she still had her dowry. I asked for all her gold to pawn. She didn’t even ask me anything. She got up, went to the room and brought her jewellery out,” he says.

Choh’s only request was that he would, someday, redeem back the jewellery.

Lee pawned the jewellery and used the money to par down some of their debts. That helped them tide over for a while longer.

There is a sense of nostalgia every time they drive pass the pawn shop in Pudu, notes Choh.

“Without the shop, we wouldn’t have survived,” she says.

The experience was a turning point for Lee. He never tried to wear a hat too big again. A decent 10%-15% business growth was enough to satisfy him for many years to come. He now prefers the slow and steady path.

After the business recovered, Lee came across another opportunity.

A customer asked if he had any safety eyewear – he did not. He went around to other hardware shops and found that none of the shops had them too.

“Oh, this is an opportunity if I can find a supplier!” he says. “I can supply to other hardware shops.”

Luckily for him, Lee found someone who could supply him Taiwanese-made safety eyewear at RM3.50 apiece. These, he sold to hardware shops at RM10 apiece, which he notes, was still cheaper than the average retail rate of RM50 at that time.

His stock sold off quickly and Lee decided to fully focus on safety products. By 1993, he was distributing items such as safety belts, poly harness, safety shoes and visors.

A new business

Before long, Lee and Choh saw a need to manufacture their own products. After all, if they could trade safety products in the local market, what is to stop other companies from following suit?

But they weren’t sure on what they should be manufacturing.

At the time, there were only two other manufacturers that were producing safety helmets, notes Lee. There was more demand than supply for this product. There was, apparently, a two-month wait for retailers to get their helmets.

Well, safety helmet it is, he decided.

The husband-and-wife team had no knowledge of the product, but they were more established then and could afford to take risks.

Proguard cranked up their own manufacturing plant in September 1997. Alas, timing was all but on their side. The effects of the Asian Financial Crisis started showing the following month.

It was a challenging time for the company but Lee did his best to hold the fort. Lee and Choh reassigned the workers from the production floor to the other departments to retain their employees.

In 1998, Proguard did a grand total of only three production rounds.

But according to Lee, its distribution business was still doing well and the company took the opportunity to capture more of the market. This helped the company make a quick recovery once market rebounded the following year and they started manufacturing other products like earmuffs, visors, earplugs and brackets.

But the safety helmet remains its core product. The company produces about 1.4 million helmets a year, but Lee expects production to increase to about 2.4 million pieces this year as demand from foreign markets increase.

Proguard exports to over 30 countries, including Germany, Japan, Netherlands, the US, Russia, the Middle-East and South-East Asia. It also carries out contract manufacturing work for large equipment companies overseas.

“We are not scared of competitors. People think it’s easy (to do this business). But there are different safety standards that you have to meet for each country and that is not easy. It’s also time consuming and expensive. Sometimes, it takes years,” says Lee.

In 2008, amidst another economic slowdown, Proguard was already established on its growth path. They took out a RM6mil loan and started building their new flagship plant at their current base in Hulu Langat, Selangor.

Lee and Choh are proud of their latest factory. It houses three blocks, each with a built-up area of 60,000sq ft, fitted out with the latest machinery. They often take in requests to tour the facility as a sign of transparency in their business.

“We’ve learned everything on our own, we started from nothing and became something 25 years later,” Lee smiles.

Proguard won the prestigious Malaysian Business of the Year award for the above RM25mil revenue category at The Star Outstanding Business Awards (SOBA) 2017. The company also took home the Best Employer (Platinum), Best Brand (Gold) and Best in CSR (Silver) awards while Choh won the Female Entrepreneur of the Year title.

“We were very excited. I couldn’t sleep for two nights after winning the awards!” laughs Choh.

But the company’s journey is far from over.

Choh, who is currently the company’s chief executive officer and chief financial officer, says Proguard will continue to look into automation to grow even further.

“We’ve been travelling to Europe quite frequently. And we can see their logistics and warehousing and they are fantastic. Everything is computerised. The stocks are in their proper areas and any new person will know where to go to pick things up.

“It’s a system that we need. We want to be the first Malaysian company to be able to do that in safety hardware. We must move a few levels up so that my competitors will be left behind,” adds Lee.

Undoubtedly, setting up such a sophisticated system would require a hefty investment. So Lee is aiming for a listing exercise, possibly in the next two years.

Last year, Proguard turned in revenue of RM56mil.

This year, it is projecting sales of RM60mil-RM65mil.

While the local market is expected to be weak, Choh says there is strong business coming in from its overseas division.

“We also want to expand our Proguard brand internationally. Most probably we will come up with more products to compete with the branded products overseas. We might do larger productions on our core products.

“We may not make a lot of money in the short term. But we will invest in our branding and make it more outstanding. It’s not just about making money anymore,” says Lee.

He believes that when the brand gets stronger, it will naturally bring the sales in.

So did Lee bought back Choh’s jewellery? Yes, two years later, he smiles.

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SOBA , Proguard