Friday 29 Mar 2024
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Datuk Hazimah Zainuddin

Founder and managing director, Hyrax Oil Sdn Bhd

Nature of business: Manufacturing and trading of transformer oil and petroleum derivatives
Factories: One (in Klang)
No of export markets: 38
Major export markets: Sri Lanka, Vietnam, Bangladesh, Pakistan, South Africa, Australia and New Zealand
Turnover (2009): RM76 million
Datuk Hazimah Zainuddin, Founder and managing director, Hyrax Oil Sdn Bhd
You started Hyrax Oil in 1991. How did the idea come about?
I enjoy racing and cars so I got involved in a business trading car spare parts and oil lubricants. Whenever we were short of supply, we would go to a Korean supplier and it was then that I thought I could start a blending plant and process the transformer oil and lubricants locally using Korean technology. The lubricant business in Malaysia was growing in the 1990s and there was only one other bumiputera independent plant producer (IPP). There were lots of IPPs and backyard blenders but not many focused on government and industrial clients.

Was starting out in the oil and gas industry tough?

The oil and gas industry is not a woman-dominated industry but I’ve always liked doing something challenging and different from the common and traditional path. To me, women can do whatever men can and vice-versa so it’s a level playing field.  

How did you fund the start-up?
I got a local partner and Korean partners to invest in the plant, which cost us around RM10 million to construct. The Koreans owned  45% of the company and the local partner owned 55%. During the Asian financial crisis in 1997, the Koreans and the local partner cashed out and I bought over the Korean share of the company, selling 30% of the shares to Perbadanan Usahawan Nasional Bhd (PUNB), who acted as a venture capitalist for five years. PUNB then gave loan stock, which provided the working capital to buy the laboratory equipment. I have since bought over PUNB’s shares and now own the company together with another local partner.

What initial challenges did you encounter?
The lubricant oil business has big players – the oil majors such as Petronas, BP and Castrol. I had to educate people on Hyrax Oil. We focused on our ‘killer product’ that the major lubricant producers did not manufacture – transformer oil. It was our core product in the early days – we exported 30% to the international market and supplied 70% to the niche market such as transformer manufacturers, Tenaga Nasional and service contractors. Transformer oil was our main product until 1997, when we participated in a tender by the government for the Treasury central contract.  We were awarded 100% of the contract and that’s how we branched into engine oil. Now, engine oil contributes 70% of the business and transformer oil, 30%.

Name your major export markets.
We’re exporting to more than 38 countries now. We do contract manufacturing and co-branding in markets such as Sri Lanka, Vietnam, Bangladesh, Pakistan, South Africa, Australia and New Zealand. We’re making inroads into Malaysia — we just appointed 40 dealers in selected areas.

The lubricant market in Malaysia is huge, easily worth RM2.6 billion, of which the major players control 95%. Independent plant producers such as Hyrax Oil would go for the 5% market share; there are about 10 IPPs. Other market players are licensed backyard operators who operate from shoplots or smaller outfits. We try not to compete with the other players but to find our niche market. We don’t do retail because we can’t go head-to-head with the major oil lubricant players.  

Was the company affected by the economic downturn last year?
Surprisingly, despite the downturn, our revenue doubled from 2008. For 1Q 2010, we have met our targets. Last year we had RM76 million in turnover and we hope to increase that by 20% this year. Certain Third World countries were not as affected by the economic downturn so it’s good to have a variety of overseas markets.

What are your current challenges?
As the business gets bigger, you need working capital and you’re dealing with export markets such as Sri Lanka, Bangladesh, South Africa, which do not have proper forecast targets so planning for that is very difficult. The lubricant business is all about planning – you have to buy base oil but you can’t carry so much stock. If you look at our cash flow, we have almost RM10 million in cash locked in our stock every month.

Buying base oil is challenging for us because CPO prices are volatile. Getting CPO contracts is another challenge because when you’re under contract, you cannot change the price. Luckily we have understanding clients with whom we negotiate and share price increases with.

You were the inaugural Ernst & Young Woman Entrepreneur of the Year in 2002. What are some tips for budding entrepreneurs?
Building a business comes with lots of challenges and you learn along the way. Do not feel like you’re a failure – a business doesn’t come overnight, it takes a long time. In any business you’re involved in, you have to remain focused.
You need to balance time with your family too. You not only have to be successful in business but in how you bring up your children as well.  

You’ve spent almost two decades building your business. How do you manage to raise your two children at the same time?
I’m a toolkit mother actually! [Laughs] When my twins Adam and Murni were three months old, I was based in the UK to be trained by Shell at their refinery after we bought their base oil. I had to go to the US to negotiate with suppliers, spend three to four days at the refinery and check on the progression of the lubricant business, new base oil produced by refineries and new additives produced by additive suppliers… And I think I’ve managed so far – just give them enough love and care, show that you’re concerned so they grow up to be loving and responsible human beings. The kids are 17 so whenever I’m around at home, I talk about the importance of studies – so I think they prefer me to not be around! [Laughs]
I try to spend the weekends with them. There’s no way I will go out for work on the weekends.

How do you find time for yourself?
I’m a swimmer, a scuba diver and did a lot of sports when I was younger but when I became so involved in the business I stopped doing all those things. I signed up for the gym because my cholesterol is high – it took me six months to sign up and another month before I actually went. But I told myself that after the fasting month I would make it a point to go because I need to take care of my health. As you grow older, there’s bound to be a wire loose somewhere! [Laughs]


This article appeared in Management@work, the monthly management pullout of The Edge Malaysia, Issue 822, Sep 6-12, 2010.

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