THE recent announcement allowing car owners to tint their rear windshield and rear passenger windows as dark as they want has brought a lift to car services shops. Many of them are already seeing increased orders.
Naturally, this is also good news for window film manufacturer Totalgard Manufacturing Sdn Bhd.
“These are exciting times,” agrees chief executive officer and managing director Ng Jun Jie.
He is, of course, expecting a surge in demand – not just for the near-term, but also in-line with increasing car sales in the future.
Well positioned, the company’s heavy investment in its manufacturing arm is paying off for Ng, who claims to be the only window film producer in the country, and, possibly, the region.
The business was initially established by Ng’s mother in 2006. With Malaysia’s hot and humid weather, window film seemed like an essential accessory and a sunny opportunity to tap into.
Much like other players in the market at that time, Totalgard became a product distributor.
“Malaysia was basically an import market. All the window film products in the market were from overseas,” he says.
But what set them apart was their attention to quality control. Instead of pushing these products straight into the hands of distributors and car workshops, the company took the time to test them out to ensure that they were reliable and were of good quality.
This was a necessary move for Totalgard to be competitive. Ng notes that workshops then were shifting their focus from providing car accessories to window film, thereby adding more players to the market.
“Cars nowadays are already fitted with accessories. They don’t need to buy a radio or CD player, for example. But for window films, consumers can still choose to get them fitted and they can choose whichever product that meets their budget,” he says.
Ng was almost a constant fixture at the company. He helped out in the business during his school days and even enrolled in a degree programme that would help him understand the product better.
When he returned from the UK six years ago, he dreamed of bigger things for the company. Rather than remain as a distributor like everyone else, he explored the idea of moving into manufacturing.
“More distributors will come into the market,” says the 30-year-old. “So we need to be innovative and we need to enter into a higher barrier segment. We want to up the game.”
With car sales growing year-on-year, demand for window film is expected to also increase. As such, manufacturing made business sense.
However, Ng notes that businesses have generally shied away from production due to the high set-up cost and technical knowledge needed to make a successful product. It took time for the team to source for good machinery and materials and to raise the RM30mil to RM40mil required to set up shop. Convincing the banks to support its project was also a challenge.
Totalgard’s production finally kicked-off in late 2017. While it was an achievement of sorts, it wasn’t all rosy.
“With this, we get to control our own quality. Previously, the quality was controlled by others because they weren’t our own products. We couldn’t demand for certain materials to be added in, if we wanted.
“But the shift was hard because you need a lot of knowledge on the technical and chemical aspects of the operations. You need the right people and the right engineer, especially,” he shares.Although his background in chemical engineering helped, the company still had to hire foreign expertise to assist with product development.
Ng points out that Malaysia is a rather unique market for window film. Unlike Indonesia and Thailand, which mainly use the black tint, Malaysians have a penchant for a variety of tint colours – including green and pink – and standards. While this makes product development more interesting, it could also be more complex. According to him, the main criteria for product success are durability, heat rejection rate, market trend, safety and availability of a warranty.
Nonetheless, their manufacturing arm enabled them to tap into the local window film distribution market estimated to be worth about RM150mil a year. Surprisingly, breaking into the market wasn’t all that difficult. Ng reckons that Totalgard currently holds about 40% share of the distribution market.
The market, he explains, can be divided into two distinct segments: branded products and house brands. The latter segment, his main target, makes up 90% of the market.
“We can manufacture for them and repackage for their house brand.
“Last time, all the other importers were our competitors. But now, they are our customers. One thing we’ve learned is if you can’t defeat your competitors, you need to move up the technology chain so that you can become their supplier. We changed the local market,” he says.
Production grew to 22 million metres of film in 2018 from 15 million metres the previous year. He is looking at increasing production to 25 million metres for this year and 29 million metres in 2020.
Revenue sits at about RM50mil to RM60mil a year.
If it maintains its growth trajectory, Totalgard may max out its current production line by the end of 2020.
“But we have space for increment.”
Currently, export to some 30 countries makes up about 20% of its sales and Ng is hoping to grow its foreign business.
He sees opportunities in South Korea, one of the bigger players in the global market.
“There has been a drop in Korea’s market share. They are facing issues with product quality and only a few manufacturers are maintaining their quality. So people are looking for alternatives that have good quality and are cheaper. We have an advantage because labour and production costs here are lower and we offer a variety of quality.
“Also, we started off as a marketing company. Most of the companies overseas started as manufacturing companies. So we have a marketing advantage. If you order from, say, Korea, you will need a minimum order and production lead time. But we already have an established network. They can buy our products directly without waiting,” he says.
Totalgard is also looking to manufacture adhesives used for window film in the near future.
While a large part of window film sales is supported by the automotive industry, demand is also emerging from the architectural sector.
In fact, the potential is so great that Ng started a new department at Totalgard to explore opportunities in this area.
“The architecture side is seeing a boom. People are starting to see the importance of window film. It’s not just to block heat, but also the glare and UV ray.
“This is a growth market and we foresee that in five years’ time, architecture film will be a hit in the market,” he says.
He notes that new constructions are incorporating more glass windows and developers are increasingly looking at options to add value to their designs. There is certainly room for the company to work with developers directly, he adds.
And if this takes off, he foresees this new segment contributing about 20% of revenue in five years.
Notably, the bulk of its export market already caters to the building sector, particularly for markets in the Middle East, Australia and South America.
However, he adds that its main challenge is dealing with products from China.
“There are a lot of sub-standard products coming into the market. These are the ones where you see bubbling under the film due to the low quality adhesive they use. There are quite a lot of those here in Malaysia.
“If the government can do a good job of protecting this industry from sub-class products, that would help increase the overall quality of products in the market. Enforcement is important,” he says.