Hasil Karya started from zero, literally, as entrepreneur Tee Ah Ling didn’t even have a product in hand to sell when he started in 1983. But his ability to adapt to changing conditions has ensured the success of company, which is now preparing to move into a spanking new warehouse with an exhibition area, reports LIM WING HOOI.
BEING able to adapt to changes is a way of life for entrepreneur. You have to be able to read the market, expect the unexpected, and change if you’re to do well in business.
And that is why the Chinese term for “business” is sheng yi or “vibrant life”, says Hasil Karya managing director Tee Ah Ling, 67, whose company distributes industrial machines to manufacturers and workshops.
Tee’s appetite for entrepreneurship began after he had worked in a hardware shop for over five years in the late 1970s.
Apart from the usual nuts and bolts, the company he worked for also sold simple machines, usually those used in cottage industries, particularly for iron works.
“I sensed there was an opportunity as the country’s industrial capability was still at a relatively young stage back then, and I felt I could do more in this segment,” Tee recalls.
And so he went solo and established Hasil Karya in 1983, by renting a three-storey shoplot in Cheras, Kuala Lumpur.
For Tee, it was not a very capital-intensive venture, and he had all of one clerk. He approached the owners of cottage industries personally, especially those involved in iron works, and began to introduce himself and his machines.
Without having any of the machinery he intended to sell, Tee was still able to get orders and deposits from these entrepreneurs. Orders secured, he would then import the machines, mainly from Taiwan.
“I also pledged my savings in the form of fixed deposit receipts whereby the banks would provide me with a small loan, about two times the leverage (of what was pledged),” he says.
Given his minimal capital, he says, it was imperative that he knew what the market wanted. Tee was very selective about the machines he brought in. At the time, they cost about RM4,000. Today’s more advanced machines cost well over RM1mil.
Just two years into the business and the country was hit by a commodity crisis in 1985. This obviously affected business as sales slowed, and Tee had to think of some other types of machines that he could sell to keep his company afloat.
He learnt that there was then a demand for cocoa, as well as a problem many planters faced: drying the cocoa after harvesting, especially during the monsoon season.
So he immediately began to look for machines that would be able to dry freshly harvested cocoa and sold them to plantations owners and government agencies in the agricultural sector.
Then in 1988, the price of cocoa fell, and with it the demand for the machines. But by then, Tee had managed to sell about 200 machines. Instead of holding back during this challenging period, he expanded his business by renting a warehouse to stock up on more varieties of machines, rather than relying on other suppliers.
Tee felt certain that the cottage industries were booming and there would be demand, mainly from specialised parts manufacturers, for more machinery.
Besides, China was also beginning to liberalise its economy, and Tee took advantage of this by importing more machines from there.
In 1995, the company moved into its own 2,043.8sq m office in Taman Industri Selesa Jaya, Balakong, Selangor.
“Change is a universal law in business. That is why during good times, one should realise that they will not last forever. Similarly, when one goes through difficulties, it’s not the end either,” he says.
The Asian financial crisis in 1997 was certainly difficult for him. Sales dropped by over 90%, and Tee went into debt. Luckily, he managed to negotiate a longer repayment term, as well as obtained some discounts. Dipping into the savings that he had kept for a rainy day, Tee was able to survive the dark days until 1999 when the economy began to stabilise.
Whenever he had free time from managing the business, Tee says he would travel abroad to look for new machines to keep abreast of the latest in the market and to identify the next product that he could offer to manufacturers. In 2001, when the Turkish lira depreciated following a banking crisis a year before, he took the opportunity to buy machinery from there.
As the nation looks towards becoming a high-income nation, Tee was attuned to the fact that reducing labour and increasing productivity was the priority of the day. His two sons, Robert Tee, 34 and Ryan Tee, 32, were roped in to take the company to the next level.
Graduates of mechatronics, electrical and electronics engineering, the brothers joined the company in 2007. Today, the two are general managers in the company, looking after the sales and the after-sales service departments.
“We now carry more advanced machines that rely less on labour known as Computerised Numerical Control (CNC) systems,” Tee explains.
Despite bringing in these machines at prices five times higher than those for conventional machines, Hasil Karya continues to grow its revenue because Tee has analysed the market well.
Their usual cottage industries clients have also grown, with many of them becoming original equipment manufacturers (OEM) who have partners or clients that are multinational companies. These clients usually demand higher productivity and products with more precise manufacturing processes.
Much like how their cottage industries clients had progressed, Tee, who in the early days had out-sourced the after-sales service, decided to build a more robust after-sales service team. High-tech machines require more technical know-how, he reasons. Consequently, he is sending more of his staff overseas for training.
Today, the company has more than 40 workers and imports over 100 types of machines from various countries, including Japan, South Korea, Italy and China. Hasil Karya caters to various industries, ranging from aerospace to agriculture.
Moving forward, Tee says, they are preparing their next warehouse, which will have an exhibition area, as Tee feels technology evolves very quickly and his clients would benefit from learning about the latest manufacturing technology in the market.
“We continue to remain optimistic in this field as our clients are continuously upgrading themselves. With the new warehouse, we hope we will have the machines to meet our clients’ needs in the shortest time possible,” he concludes.