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December 1, 1998

6 Min Read
A Timely Investment Secures Market Dominance

Seow Khim Polythelene Co. Pte. Ltd. (SKP) of Singapore wasa trading company with no prior direct experience in injectionmoulding, or manufacturing of any kind for that matter, until1995. Today, SKP enjoys a secure, comfortable, and dominant positionin a growing domestic market for thin-wall microwaveable containers,a market that SKP helped to create. Faced with 100 percent capacityutilization at its first plant, SKP will open its second mouldingplant in the first quarter of 1998. SKP also plans a possiblepublic stock offering, perhaps as early as next year.

SKP is the exclusive Asean distributor for many popular brandsof disposable plastics, paper, foam, and foil packaging productsfrom such companies as James River, Dixie, Tenneco, and Solo.It does import and export business in almost 20 countries, involvingmore than 1,500 sellable items. Since the start in 1979, SKP hasgained a reputation for product availability and on-time delivery,thanks largely to its fully computerized distribution networkand its own big fleet of delivery vehicles.

Through its global sales and marketing activities in packaging,SKP saw an opportunity to secure its future growth by corneringa new market waiting to explode in Singapore-moulded microwaveablecontainers. It bought its first eight high-performance SumitomoSG series injection moulding machines in 1995. In time, SKP wasmoulding round, rectangular, and square containers with wallsthat were only .34 mm thick, in cycle times less than 3 seconds,and with only .001 percent scrap. Although SKP had no direct experiencein manufacturing, its management executives had experience insomething that is equally important-management.

SKP's company logo is a five-pointed crown. Each point standsfor one of the five Lim brothers that runs the company. Lim SeowKhim, the oldest brother, started SKP. He is chairman and is incharge of management and finances. Jimmy Lim, the second-oldestbrother, manages the local business. James Lim manages exports.Jeremy Lim, the youngest, manages the company's chain of fourSKP Pte. Ltd. retail stores. Victor Lim, the fifth brother, isdirector of the company. He works closely with James in exports,and hosts our tour.

Networked Management

The SKP Industrial Building is an impressive sight. The thirdand fourth floors are export warehouses. The ground floor is fordistribution and manufacturing. The building's nerve center ison the second floor. For 17 years, SKP has struggled to developits global sales and marketing network. All sales are direct.Today, all of its major administrative, sales, and productionnetworking is done by computer. SKP needed a powerful computersystem to manage its diverse product line and its huge customerbase.

"Our biggest customer's share is only 3 percent,"Victor Lim explains. "We paid SD$ 32,000 in consultant feesto set up our computer network." SKP pays equally good attentionto taking care of employees and customers.

All of SKP's employees are from Singapore. Lim says he andhis brothers believe that if you take good care of your staff,your staff will take good care of you. Everyone is cross-trained,even the receptionist. And everyone's suggestions are accepted,even the delivery man's. "They feel comfortable talking tous," Lim says. All of SKP's employees are literate. Still,management is committed to continuous improvement, and investsin training. Merit bonuses based on profit sharing are availablefor excellence in performance, participation, attendance, andreviews. Turnover is very low.

There is a dart board and a table tennis area downstairs thatemployees can use on their free time. There also is SKP's seminar/presentationroom, which doubles as a karaoke night club that customers andemployees can enjoy after work. It is furnished with a huge four-speakerkaraoke TV screen. SKP closes its doors every day at 1730 hours."If you take care of them, they will take care of you,"Lim says, "especially new people. If you join us, you joinus with your heart and soul. If not, out you go."

From its trading background, SKP knew the market in Singapore."The people here work hard these days. They make more money,but they have little time. We knew they needed microwaveable containershere," Lim explains. "At first, we imported such containersfrom Australia and elsewhere. We knew that someone else offshoremight try to manufacture them and try to dump them here, but shippingadds price to these types of products. If you sell premium productslike these in volume, you make less profit. So we saw that wecould be more competitive if we manufactured them here."

Cycles Less Than 3 Seconds

Downstairs in the moulding factory, Lim introduces us to JoeCosta, SKP's production manager. Costa is a 20-year injectionmoulding veteran who came to SKP from General Magnetics Ltd.,a vertically integrated manufacturer of audio media products,like CDs. General Magnetics also uses Sumitomos, and Costa wasfamiliar with them. "This is a very tough battlefield, butthese are standard Sumitomo machines. It builds them well."Costa was especially instrumental in SKP's success, since theLim brothers had no experience in injection moulding.

SKP took two years to select its moulding machines. It entertaineda number of sales presentations and asked container manufacturersfor their recommendations. Sumitomos were selected because ofthe machines' reputation for quality, and because Sumitomo provideslocal service and training. "Don't tell us, 'We'll fly themin,' " says Lim. The cost of the machines took up a goodportion of SKP's initial SD$ 5 million capital investment. ButLim says, "We don't mind paying more up front. We don't wantto have to pay more later." Sumitomo also helped SKP designits moulding operation, suggesting, for example, machine layoutand the colour-coded overhead utility piping.

Each moulding machine is equipped with a Motan hopper loaderfed from beside-the-press gaylords. SKP uses D-M-E hot runners.The company has designed its own product handling systems builtwith resilient blue plastic sheeting-"a lot more flexiblethan cardboard," Costa says. The systems are customized foreach moulding cell. Boxes are designed to fit underneath clamps,and the flexible plastic walls on the parts conveyor systems preventparts from spilling out onto the floor. Proprietary hands-offmoulding cell automation for container stacking and handling alsohas been designed and built in-house.

Only one- and two-cavity moulds are used in the original plant.Anticipating continuing growth and the need for increased production,the new factory will use moulds with higher cavitation, four cavitiesor more, and also stack moulds, in moulding machines up to 450tons. The stainless steel moulds are built in Australia from SKP'sdesigns. Lim prefers not to disclose the mouldmaker's name forcompetitive reasons. He says SKP learned to design its own mouldsthrough salesman inquiries, benchmarking, and direct customerinput. The company has no intentions of building its own tools,although it may, over time, consider the acquisition of a mouldmaker."You have to know your own strengths," says Lim.

SKP plans to pursue ISO 9000 certification when its secondplant is ready next year. In the next three to five years, Limexpects SKP will be doing SD$ 30 million in sales, and SD$ 100million in 10 years time. By going public, with more professionalsjoining the company and with the financial support it will bring,Lim expects faster sales growth, possibly SD$ 100 million in threeyears instead of 10. "Right now we are in a good strategicposition. The challenge is ourselves. Our future is in our ownhands."

Contact information

Seow Khim Polythelene Co. Pte. Ltd.
Mr. Victor Lim
28 Loyang Drive
SKP Industrial Building
Singapore 508959
Tel: +65 545-2828
Fax: +65 545-5029

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