Success Stories - SME Corporation Malaysia

Success Stories 105I Medikel Pharmaceuticalalso benefited from loansextended by the MalaysianIndustrial Development FinanceBerhad (MIDF) and MajlisAmanah Rakyat (MARA) forthe construction of its twomanufacturing facilities, andfor the purchase of additionalmachinery and equipment.Tuan Haji Yusmat commendedthe Government for itscommitment in helping todevelop entrepreneurs,particularly SMEs and addedthat the degree of assistancerendered and the variousfacilities currently available hasenabled many companies toexpand their business. Support inthe form of financial assistanceand other incentives haveenabled SMEs to grow theirbusiness, while the provisionof training and assistancein the area of research anddevelopment have contributedsignificantly to strengtheningtheir businesses. The Governmenthas also played a pivotal role inhelping SMEs to penetrate intonew markets.In terms of challenges, Tuan HajiYusmat said that one of the mostdifficult hurdles to overcome wasto ensure that the company hadsufficient capital for its businessoperations, which includesproducing enough stock, andfor investments in advertisingand marketing. While the costis high, advertising remains anintegral part of the company’ssuccess as it reaches out to themasses. Competition he added,is also intense domestically,and the introduction of variouslocally-produced healthproducts and supplements hasmade it extremely difficult for aparticular product to be in themarket for an extended periodof time, unless it is being backedup by continuous advertisingand promotion. Changes in theglobal economic environmentsuch as increase in the costof raw materials and changesin purchasing trend can alsoadversely impact their sales.In facing the challenges andrisks, Tuan Haji Yusmat believesthat an entrepreneur must noteasily accept defeat but onthe contrary, become evenmore courageous in strivingforward. As an entrepreneur,Tuan Haji Yusmat said onemust be able to react quicklyin changing their strategies tosuit the current situation. LocalSMEs must also be bold enoughto face competition, and toacquire all the necessary skillsand knowledge to strengthentheir operations. Moving forward,I Medikel Pharmaceuticalintends to venture intomarketing and production ofpharmaceutical, cosmeceuticaland neutraceutical products.The company also aspires tobecome a leading manufacturerof Islamic health and cosmeticsproducts globally.An entrepreneur mustnot easily acceptdefeat but on thecontrary, become evenmore courageous instriving forward. As anentrepreneur, Tuan HajiYusmat said one must beable to react quickly inchanging their strategiesto suit the currentsituation

Success Stories 111in 2005. Today, the companymanages a turnover of RM65million per month (face value)with transactions amountingto between RM2.5 and RM3million per day. The experience,knowledge and expertise gainedin selling smart electronic creditcard terminals had facilitatedKAT Technologies to evolve intobecoming the first company toventure into the prepaid salesportal in 2000, initially linking fivemajor financial institutions.I would like to have KATTechnologies evolvefrom being a Malaysiancompany into a worldleader in the distributionof prepaid cards.Sometimes you have todream, but dreams docome true“Over the years we haveconcentrated on developingour own distribution support,solutions, methods andprocesses. As a result, we nowoperate a system called KATsys,an integrated and in-housedesigned system which enablesus to manage procurement,supply planning, sales andmarketing. This system isessentially able to track the statusof a prepaid card from the time itleaves our principal’s warehouseto when it reaches the salesdealers and subsequentlycustomers. We have to bevery precise with our stock byaccurately calculating the stockwe manage. When you managea RM65 million business a month,you can no longer afford to goon gut feeling and this is wherethe system comes in place,” saidY.Bhg. Datuk Ir. Haji Khairol.On average, transactions at KATTechnologies amount to 250,000units of prepaid starter packsper month; 6 million pieces ofrecharge cards per month; withmore than 45,000 sales invoicesgenerated per month. Withan authorised capital of RM10million and a paid-up capital ofRM4 million, KAT Technologies ison track to record a net profitin its thirteen year history byend 2012. For its achievements,KAT Technologies has alsobeen accorded numerousawards and accolades. It wasnamed TM’s Most Valued CardDistributor in 2010 and 2011; itwon the Excellence Award byPerbadanan Usahawan NasionalBerhad (PUNB) in 2010 and 2011;Celcom/TM’s best DistributorAward in 2008; and awards forCelcom’s Highest SIM PacksSold (2010) and Virtual ReloadSold (2009). It was also namedas Celcom’s Most InnovativeDistributor in 2009. In 2012, KATTechnologies received a DoubleA rating from the InnovationCertification for EnterpriseRating and Transformation(1-Innocert) and was rated asa 4-star company under theSME Competitiveness Ratingfor Enhancement (SCORE). InFebruary of 2012, the companywas fully accredited as one ofthe 80 pioneer Teras companyby Teraju; a unit under the PrimeMinister’s Department.Moving forward, Y.Bhg. DatukIr. Haji Khairol has his sights seton going regional and global.“Our target is to become thepreferred business partner to ourprincipals in the distribution trade,operating regionally in 2015 andinternationally by 2020. I wouldlike to have KAT Technologiesevolve from being a Malaysiancompany into a world leaderin the distribution of prepaidcards. Sometimes you have todream, but dreams do cometrue”. His parting words to otheraspiring entrepreneurs: “You mustovercome what is in your mindand you have to tell yourselfthat you can achieve it. This isnot easy but at the end, tradingis all about trust and if you canuphold this motto, people willcome back to you”.

SME ANNUAL REPORT 2011/12112 National SME Development CouncilFrom a Home-based Businessto a Large Furniture CompanyPassion over fine craftsmanshipand wood carving inspired Y.Bhg.Dato’ Hashim Mohamad toestablish HASRO Furniture Galleryin 1978. From a home-basedbusiness, the company whichis into its 34th anniversary hassince grown into one of the mostsuccessful Bumiputera furnituremanufacturing companiesin Malaysia. Today. HASROoperates its own factory andgallery in Kawasan Rambai,with Y.Bhg. Dato’ Hashim as theChairman of the company whilehis eldest son Encik Abu Huzaifah,acts as the General Managerwho runs the company alongsideother family members.From a humble beginning as asub-contractor to several maincontractors, HASRO movedup to becoming one of thesuppliers for Guthrie under itsvendor programme in the early90s. Thereafter, the companybegan supplying furniture toschools, government officesand universities via governmenttenders and in 1992, beganexporting its products to overseasmarkets such as Japan and theUnited States.In the early stages of itsoperations, the company weremainly funded through internalsources of financing except forhire purchase from financialinstitutions used to acquiremachineries. In the subsequentyears (2005-2008), the companyutilised the Market DevelopmentGrant by MATRADE to participatein trade exhibitions. HASROalso received the EnterpriseResource Planning (ERP) Grantfrom SMIDEC (now known asSME Corporation Malaysia), andwas extended a series of trainingby the MARA Furniture IndustryTechnology Centre (FiTEC),the Forest Research Instituteof Malaysia (FRIM) and theMalaysian Timber Industry Board(MTIB).According to Encik Abu Huzaifah,one of the biggest challengesin establishing HASRO was inbuilding the trust and confidencein a market that was new toBumiputera. The companyhad also gone through its fairshare of challenges arising fromchanges in the global economicenvironment over the years.“When there was a housing crisisin the United States for example,the sales of conventionalfurniture such as coffee tablewere affected as opposed toregular furniture like bed. Thesales of this furniture declined

SME ANNUAL REPORT 2011/12114 National SME Development CouncilCrafting Success in the Handicraft IndustryFrom its humble beginningsof being a trader, buyingSarawakian handicraft fromthe longhouse communitiesand reselling them to tourists,Tradelinks ManagementSystem (TMS) has come a longway to emerge as one of themost successful handicraftmanufacturers in the country.TMS began its business in 2003,operating from a small retailoutlet selling a blend of uniquelocal handicraft on the third levelof the Kuching Civic Centre,Sarawak. The founder of thecompany, Ms. Florence Skim AKSujang, raised the initial fundswith the help of some friendsand family members, to offera collection of traditionallydesignedbeads, necklaces,bracelets, bamboo and woodenhandicraft to customers.The company was subsequentlyextended a RM30,000business loan by the SarawakEconomic Development Centre(SEDC) which later led to theestablishment of the company’sshowroom in Ewe Hai Street indowntown Kuching. From theoutset, Ms. Florence realised thatTMS needed a value propositionto distinguish itself from itscompetitors. She came up withthe idea of blending ceramicsinto her handicraft collectiongiven the rising demand forceramic products. To acquirethe skills in ceramic production,Ms. Florence enrolled herself innumerous training programmes,one of which was the CeramicIndustrial DevelopmentProgramme, which is jointlyconducted by the Ministry ofIndustrial Development Sarawakand SIRIM Berhad.TMS was also an incubateecompany under the MalaysianHandicraft DevelopmentCorporation for three yearsbefore being invited toparticipate in the CeramicsCentre owned by the Ministryof Industrial Development (MID)Sarawak for mass productionof ceramics in Demak Laut,Kuching. Today, the companyoffer customers who are mainlytourists, an array of more than80 different uniquely designedhandicrafts to choose from. Forits efforts and success over theyears, TMS has been blessedwith numerous accolades. Thecompany was named as theBest Showcase for Handicraftin the 2006 One District OneIndustry programme, and wasalso the proud recipient of theHandicraft Entrepreneurs Awardin 2007 which was presentedby the Honourable PrimeMinister. For the company’sachievements, Ms. Florencewas also named as anambassador under the Duta1Nita programme by Ministryof Science, Technology andInnovation (MOSTI).

Success Stories 115The company has alsoparticipated in numerousoverseas exhibitions such asin Singapore, Japan and theUnited Kingdom with supportfrom Malaysian HandicraftDevelopment Corporation. Itsparticipation in the Groom Bigprogramme has enabled TMSto enhance its packaging andlabeling in accordance withinternational quality standards,and as a result, today, its rangeof beads and ceramics can alsobe found in Australia and theUnited Kingdom.important to be able to compete in a rapidly growing and evolvingmarket. In order to succeed and remain competitive she added,SMEs require a great degree of perseverance to offer consistentquality of products and services that are delivered on time.Ms. Florence realised that TMS needed avalue proposition to distinguish itself fromits competitors. She came up with the ideaof blending ceramics into her handicraftcollection given the rising demand forceramic productsLooking back, Ms. Florencesaid the company’s biggestchallenge thus far has beento make a name for itselfas a preferred and crediblemanufacturer of local handicraft.This required careful marketstudy, which eventually led tothe company producing its ownunique design of handicraft.While the current globaleconomic environment posedchallenges in terms of increasein the price of raw materialsand the cost of production, TMScontinues to enjoy brisk sales ashandicraft and souvenir itemsare a must for any tourist visitingSarawak.“What we are looking at now isto diversify the business. At themoment we are undertakingresearch to introduce a massthermo generated technique toproduce environmentally-friendlyoven as well as into the viabilityof using local clay to producehigher-end products such aslighting filaments,” said Ms.Florence. Meanwhile in advisingother SMEs and potentialentrepreneurs, she said that it is

SME ANNUAL REPORT 2011/12116 National SME Development CouncilTaking the Best of Malaysian Seafoodto the WorldContrary to the common beliefthat one should not start abusiness during a financial crisisor recession, Ambang WibawaSdn. Bhd. has proven to be anexceptional case. The companywas established by EncikMurkhalis Mokhter in November1997, just as the Asian financialcrisis was unfolding. Althoughhe has had his fair share ofchallenges initially, the venturehad turned out to be successfulwhen the company emergedas one of Malaysia’s leadingproducer, processor and exporterof aquaculture fish. Today,almost 95% of the company’sproducts are for the lucrativeexport market, with shipments toas many as six countries such asthe United Arab Emirates, SaudiArabia, Kuwait, Iraq and SouthKorea.According to Encik Murkhalis,Ambang Wibawa began itsoperation by supplying smallamounts of fish to hospitals,army camps and several higherlearning institutions. Later, theyrealised that there was ampleopportunity for export. “We (mywife and I) felt that we hadto grow the business, and byventuring into the export marketwe would overcome a lot ofthe obstacles of doing businessdomestically, especially in termsof payment collection. Whenyou export, the payment is madeby way of Letter of Credit andtherefore the returns are faster,”said the 43-year-old ex-banker.The turning point of his businesscame in 2004 when EncikMurkhalis exhibited his samplesin the FOODEX Japan. However,there is an irony to the story.The opportunity did not comedirectly from the Japanesemarket but instead, a MATRADEofficial who was then based inJapan had suggested to himto look at Dubai. So he quicklydid some market researchand made the necessaryarrangements to begin exportinghis products which primarilyconsisted of Black Tilapia, MilkFish and prawns. While only aminority of Malaysians favourfresh water fish, it was wellreceived by the local market inDubai and the foreigners residingin the United Arab Emirates.Today, Ambang Wibawa’sMalaysian Black Tilapia are notonly found in hypermarkets andgrocery stores in Dubai but arealso supplied to markets in SaudiArabia, Iraq and Kuwait. In fact,70% of the world’s demandfor fresh water fish is for BlackTilapia. In addition, AmbangWibawa is also exporting arange of other fresh water fishwhich includes Big Head Carp,Pangasius and VannameiShrimp. In 2006, AmbangWibawa was also among the firstbeneficiaries of the SME GrowthAcceleration Fund which wasthen implemented by BankPembangunan (M) Berhad.

Success Stories 117In order to ensure constantand steady supply of fish, thecompany depends on threeimportant sources. AmbangWibawa has its own pondsof approximately 100 acresin Kampar and also contractponds from others, in additionto sourcing fish from land-basedfishermen who sells their catchto the factory on a daily basis.On average, Ambang Wibawaprocesses between 2-3 tonesof Black Tilapia per day orapproximately 100 tonnes offish per month, all of which arecleaned, processed, frozenand pre-packed before beingtransported to Port Klang foroverseas shipment.The biggest stumblingblock is our ownmindset. You mustfirst believe that youcan do it and the restwill follow. It is fine todream bigEquipped with IndividualQuick Frozen (IQF) technology,Ambang Wibawa’s modernprocessing plant has thecapability of the fastest freezingspeed to efficiently lock-in qualityand freshness. In addition, asa Hazard Analysis for CriticalControl Points (HACCP) andHalal Certified fish processor,Ambang Wibawa is committedto producing only the highestquality products. As a result ofstrong demand, the companyalso engages a contract packerto ship its supply of Milk Fishdirectly from Tawau, Sabah tothe Middle East. On annual basis,the company exports between1,500-2,000 tonnes per year andposts an annual turnover of morethan RM5.5 million. Accordingto Encik Murkhalis, they haveparticipated in various tradeexhibitions as far as Moscow, LosAngeles and London.Ambang Wibawa also pridesitself in conforming to goodagriculture practice in whichits fish is raised with eco-friendlyand non-polluting methods.The fish is fed with quality feedwith different food compositionat various stages to ensuregood growth rate and betterfillet texture. The company’sfish ponds also do not use anyantibiotic, chemical or growthhormones.“We have gone through ourfair share of challenges, fromeconomic recession to war, butin the end, people still need toeat and that is the beauty of thisbusiness,” said Encik Murkhalis.Looking towards expanding thebusiness even further, AmbangWibawa is planning to open asecond processing plant to bebased in Sabah. They are alsostudying the feasibility of startinga 700 acres prawn farm whichwill be capable of housing atleast 300 large ponds and isexpected to be developed atthe cost of RM150 million.Advising aspiring entrepreneurs,Encik Murkhalis said “Thebiggest stumbling block is ourown mindset. You must firstbelieve that you can do it andthe rest will follow. It is fine todream big! Another importantthing to consider is to do anenvironmental scanning todetermine who you can sellyour products to. To be able todo both, Malaysians seafoodproducer must be brave toventure abroad to look at thevarious opportunities. There is alot of Government assistance invarious forms, but in order to besuccessful, you must be able tothink out of the box. One mustalso realise and accept that inbusiness, there will be plenty ofchallenges and sacrifices to bemade”.

SME ANNUAL REPORT 2011/12118 National SME Development CouncilSuccess through Word of MouthFrom a home-based companyinitiated by two friends, Ms. S.SPatricia A/P Saudagar Singhand Ms. Azlin Shahrin sometwenty years ago, Pat-LinCommunications Sdn. Bhd. hastoday become a full-fledgedpublic relations consultancy firm.Established in 1992, the companyoffers a comprehensive rangeof communication serviceswhich include corporatecommunications, brandcommunications and healthcarecommunications. The companyalso offers editorial services,multimedia and social mediasolutions as well as specialevents management. Thecompany which is based inPhileo Damansara, KualaLumpur, services both localand multinational companiesfrom the healthcare, lifestyle,corporate and business sectors.The partners had a modestbeginning using their own fundsand a home office equippedwith used furniture andborrowed office equipment. Astheir business expanded, thetwo partners reinvested theirearnings into purchasing theirown office equipment andsubsequently relocating to itscurrent corporate office. “Webelieve that it is the quality ofour work that speaks louder thanhaving a fancy office set-up.Until today, by the grace of God,our operations remain fundedby our own funds and earningsand this is indeed somethingthat we are proud of - to havebuilt our business on our owndetermination and efforts, andmanaged to grow our companyto what it is today,” saidMs. Patricia.As in any business start-up,Ms. Patricia added that Pat-LinCommunications had to workhard to establish its name, andto build trust and confidenceamong clients. Their penchantto deliver quality services spreadthrough word of mouth resultedin carving a niche market. Today,the company is also affiliatedwith PR consultancies outsideMalaysia to assist in servicingcross border needs of it clients.

Success Stories 119Today, thecompany is alsoaffiliated with PRconsultanciesoutside Malaysiato assist in servicingcross border needsof it clientsThe growth and success of Pat-Lin Communications over theyears have also been drivenby its corporate value which isPRIDE - Personal Responsibility InDelivering Excellence. Guidedby its tagline ‘ChallengingNorms and Creating Impact’,the company employs differentstrategic and tactical tools andcommunication platforms toachieve the desired results for itsclientele. These include conceptlaunches, media talk shows,gimmick invitations, integratedprogrammes and industrycollaborations to messagingworkshops, media tutorials androundtables.Challenges arising from theglobal financial crisis presentedthe company with bothopportunities and challenges.Ms. Patricia said that “Duringthe hard times, any business willbe affected to some extent.However, contrary to popularbelief, we have found that evenin times of recession, businesseswould opt for public relationsservices as opposed to otherforms of promotions as it is amore cost effective approachwhich allows businesses toremain in the public’s eye,”added Ms. Patricia.Moving ahead, Ms. Patricia saidthe company intends to continueto build on its success and growa strong servicing team. Thefocus will be to capitalise onthe growing online and socialmedia platforms to assist clientswith the growing trend. This is inline with the company’s visionto grow into a high profile,synergistic, value-adding partnerto its clients and to establishPat-Lin Communications as apublic relations consultancyof distinction and choice inMalaysia.In order to establish a successfulpublic relations consultancy,she said it is of paramountimportance that the servicingteam establish strongcommunication skills - bothwritten and spoken, alongsidesoft skills such as creativity,multitasking, strong analyticalmind, ability to counsel clientsand a strong capability toresolve issues. Confidence is alsoessential as these companies actas communication counsellorsfor their clients. “It is important toensure that you have the rightskill sets and a good servicingteam if you want to succeedin this business. You must havea passion in public relationsand be able to work within thecircumstances and resourcesto help your clients achievetheir communication goals.This must also be backed by agood understanding of the localscene,” said Ms. Patricia.