Go with the flow. This is what Wong Kim Hwa, managing director of Wintech Metal Processing Sdn Bhd, has learned to do in his journey as an entrepreneur.
Wong, now 44, had been working as a sheet metal factory manager for about five years when he decided he wanted to start his own business. However, he was not sure what to manufacture.
Falling back on what he knew best, Wong turned his company – set up in 2000 with a capital of RM200,000 – into an original equipment manufacturer (OEM) for companies that required metal frames as part of their end-product, ranging from air compressor and switch boards to conveyor belt systems and stainless steel gates.
“We had to be prudent as money was tight, and we would not be able to borrow additional working capital from banks as we did not have a track record yet,” he told Metrobiz.
Investing in two secondhand press plate machines, his company began operations in a 2,000 sq ft rented shoplot in Ampang, Kuala Lumpur with 10 staff.
As customers became familiar with the quality of his products, more orders came in.
“It is difficult to get skilled workers, so we started to invest in more machinery – this time with bank loans. Some Japanese clients inspected our factory and, knowing that we used machines with high precision and were able to do fine cuttings, gave us more jobs,” Wong said.
One of the larger projects that they have handled was the manufacture of a protection casing mechanism for over a million air conditioning units in the UK. The casings were made in the factory here and exported to the UK.
In 2007, Wong got a request from clients in Russia to build metal cabinets.
Providing him with the specifications, they asked for hundreds of cabinets that would fit into three containers to be shipped to Russia every month. This went on until 2009 when the global financial crisis hit and the orders came to a halt.
This was a dangerous period for the company as Wong’s investments in raw material and equipment fell dormant, while the bank loans still needed to be paid.
“This was what I’d feared all along. It was a competitive environment, we were dependent on orders from clients and did not have a solid product line of our own. We had to change,” he said.
So that same year, Wong decided to redevelop the metal cabinets he had been making and started his own product line. He felt there was potential in metal cabinets that were durable.
His team then went about exhibiting the cabinets in international trade shows, and in early 2010, the company began to export to Libya, Nigeria, Australia, Indonesia and Singapore.
On average, they exported about 3,500 cabinets a month, shipped in 10 containers, thanks to increased orders from existing customers, as well as new clients from referrals.
Today, the company operates in a five-acre factory in Banting, Selangor, with 150 workers comprising sales staff, engineers and factory operators.
To-date, the company has invested RM20mil in machineries. According to Wong, this investment was vital as the machines not only reduced reliance on foreign workers but also allowed them to do very precise cutting and other manufacturing activities.
“Shipping cost is high, and we do not want to export ‘Malaysian air’,” he joked.
The company’s metal cabinets are pre-fab, manufactured to be shipped in the most efficient manner possible. When their overseas clients receive the containers, they are able to quickly assemble them and send them to end-users.
With the increased capacity, Wong is also eyeing the local market.
“We know the cabinets are of good quality, and our foreign importers love it, so why not have the same product for Malaysians as well?” he asked.
The cabinets come in over 100 designs and are marketed by select distributors. The company also does project-based designs, ranging in value from RM500,000 to RM1.5mil, that are marketed via architecture firms to clients of their residential and commercial developments.
Some of their projects include providing customised fire-resistant cabinets for data storage for companies in the oil and gas industries.
Reflecting on his 15 years in the business, Wong said surviving in a competitive market was about balancing price, quality and service to meet customers’ needs.
“If you can meet all three well, customers have no choice but to give the orders to you,” he said enthusiastically.
That may sound like conventional wisdom, but there are also times when you have to be different in your outlook from your competitors.
For example, manufacturers generally do not like to keep extra inventory, especially with the advent of Toyota Motor’s ‘Just in time’ philosophy. It is akin to tying down capital, be it in the form of cash or space. But Wong is not averse to doing just this.
“In our warehouse, we keep many finished goods. We often have clients who want the products on short notice,” he said.
Wong is proud of how far the company has come. He said there had been instances in big projects when they were required to apply for a performance bond from commercial banks to ensure that they delivered the projects on time.
“To-date, we’ve not failed,” he concluded confidently.