C K Tan, Group CEO, Munchy Food Industries
Nature of business: Biscuit and wafer manufacturing
Revenue (2009): RM300 mil (approx)
Major export markets: Japan, Singapore, Indonesia
Factories: One (Batu Pahat, Johor)
Export markets: 60
Your family is affiliated with Hwa Tai Industries – a competitor. Where does Munchy Food Industries fit in?
My father founded Hwa Tai but he did an IPO (initial public offering) in 1992 and sold the entire company in 1996. Subsequently it changed hands a few times and now, it’s under the Soo family. Today, we are friendly competitors!
My two older brothers started Munchy’s in 1991. I came back from the US in 1994 to join them in the business as export manager because I knew English and had a computer background. At that time, the Internet was just starting to boom. My father had asked me to come back because he figured that if I had worked longer in the US, I might not come back anymore [to Malaysia] so… [laughs]
Coming from a family of entrepreneurs, was it easier to start Munchy’s then?
I don’t think so. We grew this business from scratch so we had to relearn everything. I would say it took more of common sense and best practices to build the company. As we continued to grow the business, we acquired knowledge to implement in the company.
Even today, we’re still learning, especially going into a country like China, for example. Fifteen to 20 years of experience makes you a different person in terms of understanding but the challenges and situations are new, and the risks are much greater. Today, when you go in to set up a company, it’s not an RM80,000 investment but RM20 million! It’s just as challenging.
How has the company grown since?
We started a very small company with RM3 million in sales back then. We had three administration staff – one for marketing and sales, one for finance and another for human resource. Everyone was doing everything and slowly, I took care of the management and injected a lot of new ideas into the company, such as relocating the sales and marketing headquarters to KL in line with our people strategy to find the best people.
It took me four to five years to transform the company from a family-oriented business to a professionally run one. My brothers and I are considered second generation ‘biscuit people’ running the company. We were educated abroad so we try to merge the good things between the East and the West. While it is still a family-owned business today, we’re able to let professionals run the management. Since I am now based in China, the company is managed by professional teams. Being able to attract very talented people to join the company is our biggest achievement.
What are your plans in China?
I am based there for two years to study the market. Currently our business in China is able to bring in about RMB20 million... the market is huge so we’re trying to do more there. We recently confirmed our Shanghai office and are also setting up offices in Vietnam and Indonesia.
What is the revenue breakdown in terms of markets?
Today, about 60% to 70% is from local business and the remaining from overseas markets. Our products are exported to 50 to 60 countries. Japan, Singapore and Indonesia are among our biggest markets.
How much was revenue last year?
Close to RM300 million and we hope to grow it by 20% by year-end. We just recovered from the melamine crisis at end-2008 so we’re back on track. It took us one year to rebuild the international markets that were affected.
What is Munchy’s market share in Malaysia?
According to AC Nielsen figures, it’s currently around 21% of the market. Overall, we’re
No 2 behind market leader Kraft, which acquired Danone’s biscuit and cereal business in 2007.
What did the rebranding exercise in 2005 entail?
I see our whole rebranding as an organisational transformation. I hired [former group CEO of the Interflour Group of Companies] John Madsen as adviser as he had helmed many companies before. We created a three-year internal rebranding programme, starting with ‘Good to Great’, [going on to] ‘Unleash Your Creativity’ in the second year and ‘A Whole New Munchy’s’ [in the third]. We changed the company structure, the people and the way we do things. We invested a lot into advertising, from RM500,000 then to RM15 million this year, in addition to public relations efforts.
How did the rebranding affect employees?
Pure branding will not make people want to join your company, but the corporate culture would. We provide staff teatimes, every Monday we have a ‘booster’ message here where the heads of office speak with the staff. We also celebrate birthdays and festive seasons together. We try our level best to do things to link people together. And I’m happy to say that with all this, this company is equipped with good talent.
Over the last two to three years, many old staff left the company because they could not keep up with the new requirements. It was very sad but then, I need to learn that this is part of the growing pains.
You’ve said before that family life is important to you. How do you manage work-life balance?
I try to have dinner with my wife once a week and try to reserve weekends for the family. Sometimes I do ‘steal’ their Saturdays. And I try to bring them on holidays whenever we can. This summer, I brought them back to Malaysia. It’s not easy [managing work-life balance] but obviously, I have to put time into it.
What would your advice be to budding entrepreneurs?
In every business, the desire to improve is important. Today, even with such an advanced factory, we still receive three to five consumer complaints a month. We aim to have no complaints – that’s how we continue to do well. Continuous learning is important too. In the beginning, we didn’t know anything. I had worked in a big US company that already had a computer system to manage store inventory so when I came back, I wanted our company to be like that as well. All this was learnt over time.
This article appeared in Management@work, the monthly management pullout of The Edge Malaysia, Issue 826, Oct 4-10, 2010.