GEORGE TOWN: Penang-born Malaysian electrical home appliances (EHA) manufacturer Pensonic Holdings Bhd, which is spearheading the government’s EHA segment of the entry point project (EPP) under the Economic Tranformation Programme (ETP), started from humble beginnings in the remote township of Balik Pulau on Penang island more than 46 years ago.

Then known as Keat Radio and Electrical Co, its founder Datuk Seri Chew Weng Khak started selling electrical items and ran a workshop, and in 1974 set up his first branch along Perak Road.

Two years later, he ventured into import, export and distribution of branded electrical appliances from Japan and Europe.

Pensonic group managing director Dixon Chew said his father then started building up his own network of dealers in Malaysia who were also selling the EHAs.

“He grew the business like his own baby, whole-heartedly through the years, promoting international brands.

“However, sometime in the early 1980s, the principal companies of these appliances began setting up their own firms in Malaysia and pulled back the dealerships and started selling the products themselves, causing many people, including my father to face a huge crisis as their businesses depended on these foreign brands.

“It broke my father’s heart but it was actually the turning point as my father decided in 1982 to have our own brand of EHAs,” said Chew.

The senior Chew penned the name Pensonic, a combination of “Penang” and “sonic”, which meant sound as the first Pensonic product was radio cassettes.

The company commissioned an original equipment manufacturer (OEM) from South Korea, which was then small, but today is an international name, to produce the audio and video products.

Chew said though unintentional, Pensonic was often confused with Japanese giant Matsushita’s Panasonic brand. Pensonic was even accused of copying the name, though the company had its own story on how it was coined.

Taking advantage of the vast network distribution which was already in place, the Pensonic brand was promoted with dealers given incentives to market the products.

In 1988, Pensonic commenced manufacturing and marketing EHAs, which made history as the nation’s first “Made in Malaysia” EHAs.

In 1995, the company was listed on the Second Board of Bursa Malaysia.

From manufacturing, importing, exporting, distributing and marketing its own brand of EHAs for the domestic and international markets, Pensonic is also engaged in own design manufacturing (ODM) for several international brands.

Today, Pensonic has 10 branches with more than 900 dealers nationwide and its products are exported to 30 countries in Asean, East Asia, West Asia and the Middle East.

Through the strong distribution network, the company has adopted a multi-brand platform to cater to the different product categories and market segments. It owns the Lebensstil Kollektion from Germany and recently acquired Cornell USA.

Pensonic also holds the sole distribution rights in Malaysia for internationally renowned home appliance brands like Princess of Holland, GE Appliances from the US and Morphy Richards from the UK.

The path to success had not been an easy one, Chew said.

“Initially, we had difficulty trying to convince people to buy our brand. Foreign brands have been around between 50 and 100 years and they have already gone through the process of building up the brands over the years, solved problems and improved their products.

“Even some of the famous car manufacturers are still having quality issues, despite having been around for decades,” Chew added.

For 20 years with the first audio and video products, Pensonic worked on building the brand, improving the products along the way and gaining the respect of its customers.

Initially, prices were kept lower than the imported brands to attract buyers.

Chew said while there were some who preferred lower priced local items, there were others who were only keen to buy established brands and foreign products.

In 2003, Pensonic took a bold move to change this perception, analysing and studying how to brand its products well.

“We spent time and engaged international branding consultants to draw a blueprint and come up with a masterplan to help us rebrand.

“It took us four to five years and we started internally for 1½ to two years to change our employees’ mindset about our products before we rolled out the campaign to the general public,” he added.

Through sheer grit and determination, engaging up-and-coming celebrities as “friends of Pensonic” to promote its products, Chew said the rebranding exercise was a resounding success, as the company embarked on promoting its products abroad over the past five years.

Tapping on the strength of the “Malaysian” brand, especially in the Middle Eastern countries and also Asean, Pensonic succeeded in penetrating those markets.

Pensonic has mapped out an aggressive growth plan for the next five years with two core activities — to continue building its brand and acquiring regional brands to add to its stable of products besides carrying out research and development for its own brands and continuing with ODM for international brands, mostly renowned Japanese names.

With plans to invest up to RM60 million over the next five years, the company is looking out for two plots of land, six acres each on mainland Penang. They are Bukit Minyak and Bukit Tengah to build a new headquarters cum innovation centre to create a platform for product development and R&D with a new manufacturing facility. This is in addition to its two factories in Bukit Minyak and Bukit Tengah.

“We have a huge vision to create this platform and share these resources with our SMI/SME partners. We went through the same struggles when we were small and did not have access to such facilities,” Chew added.

This article appeared in The Edge Financial Daily, May 16, 2011.