- Joined
- Jan 23, 2010
- Messages
- 1,746
- Points
- 0
Popiah King not giving up his kingdom
Selling out to a global conglomerate is the last thing the chairman of frozen foods brand Tee Yih Jia plans to do. Instead, he wants to expand and make the firm a Fortune 500 one.
By Robin Chan
'POPIAH King' Sam Goi does not often disagree with Minister Mentor Lee Kuan Yew.
After all, the successful businessman from China had heeded Mr Lee's call for local firms to expand into overseas markets as early as 1980, and has reaped the benefits tremendously.
Today, his company, Tee Yih Jia Food Manufacturing, is a famous global frozen foods brand in markets spanning the United States, Europe, Japan and China.
But when Mr Goi heard that Mr Lee had said that Tee Yih Jia would be swallowed up by the likes of food and beverage giant PepsiCo if it became too successful, he decided to talk to The Straits Times about his company's plans.
The gist of it? Selling out is far from his mind.
Even at the age of 62, he harbours ambitions to grow the company further by taking the Chinese market by storm, introducing new food products and even making his firm a Fortune 500 company one day.
'I am very honoured that MM mentioned my company. It means he remembers my company,' he says in his spacious executive chairman's room in Senoko, surrounded by auspicious Chinese paintings.
He clearly admires Singapore's first prime minister. Among a clutter of papers on his table lies a newly printed photograph of him with Mr Lee at Dunman High School, where Mr Goi is on the advisory committee.
But he respectfully disagrees that he has any need or intention to sell out his company, where he is still sole owner.
'Everyone has his own view. I don't know what MM is thinking (when he said that Tee Yih Jia would be taken over by PepsiCo),' he said.
Mr Goi, who sailed to Singapore as a six-year-old on a small boat with his parents to flee the communist government in China, admits that many Asian companies have been taken over by Western ones.
And manufacturers, especially those in Singapore, have found the going tough once they get out into the world of open markets and fierce competition.
In fact, Mr Goi has been approached on numerous occasions by private bankers with lucrative offers to buy him out. He declines to disclose the amounts offered, and claims he has never heard of an approach from PepsiCo.
He tells The Straits Times that he keeps his business separate as 20 smaller units so that those takeover vultures do not get even hungrier.
'Revenue? I don't want to share because a lot of giants have their eyes on me. Why do I split my business into so many companies, all below $100 million each? I don't want to make it open to the public. But if you add it all up, the value is higher than what has been reported,' he says.
He later revealed that total revenue last year for all his businesses combined was $430 million.
Mr Goi takes all the attention in his stride. 'People ask me, 'What price?' But I just smile and say, 'Thank you, I'm not considering.' I have never opened up my books.
'If a big company approaches me, I don't feel that it is a bad thing. It means my company is growing, and people are taking notice of it.'
Tee Yih Jia is one of the few manufacturing success stories Singapore has produced in its more than 45-year history.
For all of the country's widely praised economic development, it is the foreign multinational companies (MNCs) that have thrived here, leaving the local small and medium-sized enterprises to service them.
Economists and business leaders have often been vocal critics of how the Government could have done more to promote local firms instead of relying on foreign MNCs.
And, indeed, Tee Yih Jia and a few others such as Creative and Yeo Hiap Seng have been proof that Singaporeans are capable.
But in interviews with Straits Times journalists for a new book, Hard Truths, Mr Lee said that with Singapore's small market and lack of talent, it would never be able to produce a world-class manufacturing company.
Rather, it is destined to remain reliant on global MNCs from the West, and perhaps from China and India in the future, where companies have the resources, talent and market size to grow.
And even if a company is successful, said Mr Lee, it cannot avoid eventually being taken over by the larger firms.
'Get to world class, and there will be a company that is eyeing all these possible takeovers,' he said.
Tee Yih Jia, he said, 'once it begins to succeed in America, (it) will be taken over by conglomerates like PepsiCo'.
'How do I know? Because I have attended PepsiCo meetings. They collect foodstuffs from around the world and sell them in their outlets in Latin America and in all the cinemas across the world.
'They will buy up Tee Yih Jia, and Tee Yih Jia can't compete with them because where are its outlets?'
Mr Goi says he was not surprised Mr Lee made those comments. But he points out that the company is already well in the US market.
In fact, Tee Yih Jia has been there since the 80s. In 1988, Mr Goi bought over Main On Foods, an established food manufacturing and distribution company in Los Angeles, for US$20 million - his first overseas investment.
Today, some 60 per cent of his revenue comes from products he sells to stores and supermarkets in the US, Europe and Japan.
But despite his success, Mr Goi admits it is tough going for a Singapore company.
'What MM said is correct. The local market is small. And we face a lot of competition,' he says.
He points out that from his office, he needs to drive just 15 minutes to neighbouring Johor, where costs of labour, raw materials and rents are at least 60 per cent cheaper.
'Our food costs cannot compare with Malaysia, Indonesia or any other country. Even in the US, manufacturing food is quite cheap because they have raw materials. Here, we import everything. Singapore definitely cannot compete on price.'
What, then, has been key to Tee Yih Jia's survival, and even growth? Quality and hygiene, he says.
'Our manufacturing hygiene in Singapore is a standard. Are other brands as hygienic or not? We don't know. Even Chinese people don't buy products made in China. We must compete on quality and hygiene,' he says.
That is why Mr Goi has invested heavily in upgrading the manufacturing processes for his foodstuffs and has been highly protective of his proprietary production processes honed from trial and error over 30 years.
'Maybe other companies have a lot of money to produce a machine. But processing is different. All of it is our own design. We learnt from the experience and the time we put in producing spring rolls, roti prata. We saw a lot of trouble when it first came out, so we modified it,' he says.
'After we had modified it, we would see another problem. So month after month, year after year, we would try to improve it. Other people, no matter how much money they put in, cannot do this overnight. Food is like that; it may be made from the same ingredients, but if different people fry it, it will taste different.
'I want to make sure that all my products that go to the consumer are perfect.'
The company is a giant in popiah and roti prata, most of which are made in Singapore or the US factories to guard against copycats.
As testament to its commitment to quality, the company is bringing in a new machine in three months which will improve the texture of roti prata, he says.
'Why do I spend another $5 million to $6 million to upgrade, when the selling price is still the same? Because we must improve ourselves.'
As Asian food becomes more popular in the West, he plans to introduce two or three new products this year, which will appear in the next six months.
He is already looking at the next frontier - competing in the Chinese market.
'My dream? I want Asian food to have a place in the world. The China market can change a lot of things, there are 1.3 billion people. Today, maybe Pepsi or Coca Cola is No.1, but maybe one day, herbal tea or soya bean will overtake it (as the No.1 selling drink).
'If you want to become a good company, you must have a China market share. If you can produce, and can sell there, it is a big, big market,' he says.
Mr Goi took a few years to focus on his property business in China, the Yangzhou Junhe Real Estate Group, and then used the capital gains to invest in his food manufacturing business.
He is now more focused than ever on charting the growth of the company.
He is making 2011 the year for his return to a more hands-on role in the company, pushing for more acquisitions to expand the business.
'I always tell my staff, to be one of the largest manufacturing firms and the world's best, we must compete with ourselves. Today, we must be better than yesterday. Tomorrow, we must be better than today. With that kind of belief, then Tee Yih Jia will forever be a leader in manufacturing.
'And, maybe one day, I can grow (it) to become a Fortune 500 company. (I) can try.'
[email protected]
Selling out to a global conglomerate is the last thing the chairman of frozen foods brand Tee Yih Jia plans to do. Instead, he wants to expand and make the firm a Fortune 500 one.
By Robin Chan
'POPIAH King' Sam Goi does not often disagree with Minister Mentor Lee Kuan Yew.
After all, the successful businessman from China had heeded Mr Lee's call for local firms to expand into overseas markets as early as 1980, and has reaped the benefits tremendously.
Today, his company, Tee Yih Jia Food Manufacturing, is a famous global frozen foods brand in markets spanning the United States, Europe, Japan and China.
But when Mr Goi heard that Mr Lee had said that Tee Yih Jia would be swallowed up by the likes of food and beverage giant PepsiCo if it became too successful, he decided to talk to The Straits Times about his company's plans.
The gist of it? Selling out is far from his mind.
Even at the age of 62, he harbours ambitions to grow the company further by taking the Chinese market by storm, introducing new food products and even making his firm a Fortune 500 company one day.
'I am very honoured that MM mentioned my company. It means he remembers my company,' he says in his spacious executive chairman's room in Senoko, surrounded by auspicious Chinese paintings.
He clearly admires Singapore's first prime minister. Among a clutter of papers on his table lies a newly printed photograph of him with Mr Lee at Dunman High School, where Mr Goi is on the advisory committee.
But he respectfully disagrees that he has any need or intention to sell out his company, where he is still sole owner.
'Everyone has his own view. I don't know what MM is thinking (when he said that Tee Yih Jia would be taken over by PepsiCo),' he said.
Mr Goi, who sailed to Singapore as a six-year-old on a small boat with his parents to flee the communist government in China, admits that many Asian companies have been taken over by Western ones.
And manufacturers, especially those in Singapore, have found the going tough once they get out into the world of open markets and fierce competition.
In fact, Mr Goi has been approached on numerous occasions by private bankers with lucrative offers to buy him out. He declines to disclose the amounts offered, and claims he has never heard of an approach from PepsiCo.
He tells The Straits Times that he keeps his business separate as 20 smaller units so that those takeover vultures do not get even hungrier.
'Revenue? I don't want to share because a lot of giants have their eyes on me. Why do I split my business into so many companies, all below $100 million each? I don't want to make it open to the public. But if you add it all up, the value is higher than what has been reported,' he says.
He later revealed that total revenue last year for all his businesses combined was $430 million.
Mr Goi takes all the attention in his stride. 'People ask me, 'What price?' But I just smile and say, 'Thank you, I'm not considering.' I have never opened up my books.
'If a big company approaches me, I don't feel that it is a bad thing. It means my company is growing, and people are taking notice of it.'
Tee Yih Jia is one of the few manufacturing success stories Singapore has produced in its more than 45-year history.
For all of the country's widely praised economic development, it is the foreign multinational companies (MNCs) that have thrived here, leaving the local small and medium-sized enterprises to service them.
Economists and business leaders have often been vocal critics of how the Government could have done more to promote local firms instead of relying on foreign MNCs.
And, indeed, Tee Yih Jia and a few others such as Creative and Yeo Hiap Seng have been proof that Singaporeans are capable.
But in interviews with Straits Times journalists for a new book, Hard Truths, Mr Lee said that with Singapore's small market and lack of talent, it would never be able to produce a world-class manufacturing company.
Rather, it is destined to remain reliant on global MNCs from the West, and perhaps from China and India in the future, where companies have the resources, talent and market size to grow.
And even if a company is successful, said Mr Lee, it cannot avoid eventually being taken over by the larger firms.
'Get to world class, and there will be a company that is eyeing all these possible takeovers,' he said.
Tee Yih Jia, he said, 'once it begins to succeed in America, (it) will be taken over by conglomerates like PepsiCo'.
'How do I know? Because I have attended PepsiCo meetings. They collect foodstuffs from around the world and sell them in their outlets in Latin America and in all the cinemas across the world.
'They will buy up Tee Yih Jia, and Tee Yih Jia can't compete with them because where are its outlets?'
Mr Goi says he was not surprised Mr Lee made those comments. But he points out that the company is already well in the US market.
In fact, Tee Yih Jia has been there since the 80s. In 1988, Mr Goi bought over Main On Foods, an established food manufacturing and distribution company in Los Angeles, for US$20 million - his first overseas investment.
Today, some 60 per cent of his revenue comes from products he sells to stores and supermarkets in the US, Europe and Japan.
But despite his success, Mr Goi admits it is tough going for a Singapore company.
'What MM said is correct. The local market is small. And we face a lot of competition,' he says.
He points out that from his office, he needs to drive just 15 minutes to neighbouring Johor, where costs of labour, raw materials and rents are at least 60 per cent cheaper.
'Our food costs cannot compare with Malaysia, Indonesia or any other country. Even in the US, manufacturing food is quite cheap because they have raw materials. Here, we import everything. Singapore definitely cannot compete on price.'
What, then, has been key to Tee Yih Jia's survival, and even growth? Quality and hygiene, he says.
'Our manufacturing hygiene in Singapore is a standard. Are other brands as hygienic or not? We don't know. Even Chinese people don't buy products made in China. We must compete on quality and hygiene,' he says.
That is why Mr Goi has invested heavily in upgrading the manufacturing processes for his foodstuffs and has been highly protective of his proprietary production processes honed from trial and error over 30 years.
'Maybe other companies have a lot of money to produce a machine. But processing is different. All of it is our own design. We learnt from the experience and the time we put in producing spring rolls, roti prata. We saw a lot of trouble when it first came out, so we modified it,' he says.
'After we had modified it, we would see another problem. So month after month, year after year, we would try to improve it. Other people, no matter how much money they put in, cannot do this overnight. Food is like that; it may be made from the same ingredients, but if different people fry it, it will taste different.
'I want to make sure that all my products that go to the consumer are perfect.'
The company is a giant in popiah and roti prata, most of which are made in Singapore or the US factories to guard against copycats.
As testament to its commitment to quality, the company is bringing in a new machine in three months which will improve the texture of roti prata, he says.
'Why do I spend another $5 million to $6 million to upgrade, when the selling price is still the same? Because we must improve ourselves.'
As Asian food becomes more popular in the West, he plans to introduce two or three new products this year, which will appear in the next six months.
He is already looking at the next frontier - competing in the Chinese market.
'My dream? I want Asian food to have a place in the world. The China market can change a lot of things, there are 1.3 billion people. Today, maybe Pepsi or Coca Cola is No.1, but maybe one day, herbal tea or soya bean will overtake it (as the No.1 selling drink).
'If you want to become a good company, you must have a China market share. If you can produce, and can sell there, it is a big, big market,' he says.
Mr Goi took a few years to focus on his property business in China, the Yangzhou Junhe Real Estate Group, and then used the capital gains to invest in his food manufacturing business.
He is now more focused than ever on charting the growth of the company.
He is making 2011 the year for his return to a more hands-on role in the company, pushing for more acquisitions to expand the business.
'I always tell my staff, to be one of the largest manufacturing firms and the world's best, we must compete with ourselves. Today, we must be better than yesterday. Tomorrow, we must be better than today. With that kind of belief, then Tee Yih Jia will forever be a leader in manufacturing.
'And, maybe one day, I can grow (it) to become a Fortune 500 company. (I) can try.'
[email protected]
