The Ng siblings are aiming to be the world’s top producer of security seals
IN THE early days of running their security seals manufacturing business, brothers Datuk Dr Nick Ng and Adrian Ng made a promise to themselves: that they would conquer the world with one seal.
They had little resources then and hardly any experience as a manufacturer, but they certainly were not short on ambition.
It has been 20 years since and they’ve made good on that promise.
With operations in over 20 countries and a team of about 700 people worldwide, the siblings are proud of how far they’ve come with Mega Fortris (M) Sdn Bhd.
But it could have been a missed opportunity if Adrian, 52, had not been persistent in sharing the business idea with his brother.
Adrian had left his job as a marketing manager for a security seal manufacturer some years before that and had no intentions of returning to the industry. However, his former clients kept coming back to him for his services and he soon saw that there was perhaps an opportunity there to explore.
He took almost two years to talk his brother into starting a security seal trading business with him.
Security seals are used to seal containers to prevent them from being tampered with.
“I finally bought into the idea because he was convincing me every other day,” says 67-year-old Nick.
By the time they decided to make a go for it in 1996, the economic climate had turned rather unfavourable.
They were fortunate, though, to find a chemical company that placed an order for 20,000 seals with them.
“When we had the order, we were just so happy that we made a lot of secondary processes to make sure that the seals we got from our supplier were intact,” recalls Nick.
Alas, two weeks after delivering the goods, they received a call from the customer noting that their seals could not be locked.
It turned out to be a bad experience, says Nick.
But the defective seals taught them to take a closer look at the products from their suppliers and eventually pushed them to manufacture their own seals.
“Something just struck us and we thought that we should just develop our own seals. And it’s not that difficult when I look at it,” he says.
That was when they got serious with the business and vowed to build a global company.
“It sounded very strange then. We were in a recession, we had no money or working capital. But our ambition was that with one seal, we will conquer the world,” says Adrian.
That vow came with a lot of hard work and many long days.
They also had to resort to “high interest borrowing” to fund their operations.
Mega Fortris started distributing its products locally to grow its market. They took the time to gauge market acceptance of their seals and improved on their products through feedback. They had to make sure that their products made the mark.
Once they go abroad, there was no room for errors.
Their efforts were well rewarded. Business grew and sales jumped from about RM99,000 in the first year to RM1mil the following year.
By the end of 1997, Mega Fortris had started exporting to Indonesia and then moved on to Europe and the US.
The company was strategic in its move overseas. They stuck to countries that had existing trade agreements with Malaysia and made use of their price advantage.
“When we exported to the UK, their prices were extremely high at the time. We had the price advantage. They were selling at 65pence apiece while we were doing about 40pence.
“It’s not that we wanted to sell cheap but it was about how much money we wanted to make. We didn’t mind a slightly lower margin and our products were produced in Malaysia, so our cost was lower. That was how we managed to capture the market,” says Adrian.
But it took a while for Mega Fortris to build its brand in the export market.
In the initial stages, their distributors had requested that they removed the “Made in Malaysia” label from their packaging.
“We said no. You want to buy from me, that is what you are buying. It is made in Malaysia and we produce good products. We are proud to brand it as a Malaysian-made product.
“Over the years, they accepted that fact.
“Our cartons are very clearly stamped with “Made in Malaysia” and our brand grew from there,” he says.
Adrian reckons that Mega Fortris is, today, among the top five security seal players in the world.
It has been enjoying double-digit growth and exports currently make up 94% of its annual revenue which tops RM100mil.
Its seals are used across many industries such as airline, logistics, gaming, healthcare and transportation.
The company’s diverse business enables it to withstand a slowdown in any of the industries. But seals are mandatory for most industries anyway, he adds.
One of the main challenges in going overseas, says Adrian, is in identifying the right partner.
“They need to have very good integrity because they hold our money there. They need to be very hardworking and loyal. They manage their own bottomlines even though they report back to us.
“Some of our partners have been with us for more than 10 years. So it shows that we got the right partners,” he says.
Building a stronger foundation
After 20 years of expanding the business, Nick and Adrian are now looking at the company’s next phase of growth.
They are embarking on a three-year plan which encompasses a restructuring exercise, some merger and acquisition activities and plans for organic growth.
The aim of the plan?
“So that I can retire,” laughs Adrian, who is currently Mega Fortris group chief executive officer.
“Jokes aside, in three years, we are aiming to be number one in the world,” he adds.
The siblings hope to put the company on a stronger footing and transform their stable company into a solid conglomerate.
There are also plans to move into different market segments and roll out more products and solutions.
“We are moving towards being an end-to-end security solutions provider incorporating the seal. That’s where the future business is,” he says.
They are also putting in more automated operations to keep with the rising cost of materials and labour. Adrian notes that margins have halved over the past two decades as costs continue to rise.
Mega Fortris is also moving from its corporate-based business towards the commercial space and is hoping to eventually sell directly to consumers.
There is a lot of potential in the consumer market, says Nick.
And if all goes according to plan, the same can be said about Mega Fortris.
Last year, Mega Fortris’ achievement was recognised at the Star Outstanding Business Awards 2016. The company bagged Malaysian Business of the Year, Gold for Best Global Market, Gold for Best Innovation and Silver for Best Brand in the Above RM25mil revenue category.
Adrian also took home the Male Entrepreneur of the Year award in the Above RM25mil category.
“The achievement is for everyone. It is not only us. It is a contribution from everyone,” says Adrian.
He opines that the security seals business is a “nice business” to be in.
“Our passion since day one has stayed the same. We eat, sleep and breathe security seals. All of us do that. It has become a big part of our lives. It’s been 20 years,” he says.
Nick, who is the group executive chairman, is handing over the reins and slowly taking a backseat.
“Adrian is in charge now,” he smiles.
“I think I’ve been very lucky. I have a brother who is very hardworking and brought me an opportunity that I had not thought of. Everything is ‘just nice’ now,” says Nick.
And for him, it is only a matter of time for “just nice” to become “top of the world” with their seals.