Jobbie Nut Butter is stuck. Due to the Movement Control Order (MCO), its suppliers have halted their production and now, the company does not have the components – from glass jars to packaging to raw peanuts – needed to churn its homemade peanut butter.
As a last resort, the company sent out a plea on social media, asking its customers to place orders 45 days in advance with the caveat that if the orders do not arrive to customers within 45 days of ordering, a full refund will be given. While its post has managed to garner a lot of buzz online, this plan will only work to sustain the company if the MCO is not extended beyond April 14.
“Being a small company with six people, we’re not sure how long we can last. With the funds we have now, we can survive three to six months maximum, with top management taking pay cuts. We hope we don’t have to go through that,” says Victor Chin, CEO and co-founder of Jobbie Nut Butter.
He explains that right now, the company is still continuing to pay employees and if it continues to pay full salaries, its funds can last, at most, about three months. However, if it needs to stretch the funds, top management would need to take a 50% pay cut, which will then extend the life of the company to six months.
Chin tells Enterprise that there was a time when he joked that if there was a zombie apocalypse and the stores ran out of food, their peanut butter could sustain them as the product has a long shelf life. However, they didn’t expect their lack of access to supplies to be their possible downfall.
“The suppliers have a problem delivering the jars, peanuts, stickers and labelled jar caps because they cannot cross the border. We wanted to switch to plastic bottles but the suppliers still cannot deliver as they would be travelling from Penang, Johor and some in the Klang Valley. We still cannot produce it in time and there is no product to sell anymore,” says Chin.
Jobbie Nut Butter has been around for six years and typically produces 15,000 to 20,000 jars of peanut butter a month, says Chin, adding that the company forecasts inventories on a monthly basis. Before the MCO, it had one month worth of supplies. But due to panic buying at that time, the company finished two months’ worth of stock in two weeks.
There was an amazing response to its post on social media, says Chin. As at 12pm today, its Facebook post had garnered over 800 shares and more than 600 comments. A significant number of people commented saying that they did not like peanut butter but purchased Jobbie Nut Butter to support the company.
“We received 10 times the amount of orders we usually get and that was all organic reach through our post till 8pm [yesterday]. Looking at the spike in sales, we may not face any losses. It’s a blessing in disguise and we consider ourselves one of the lucky ones,” says Chin.
Meanwhile, the post caught the attention of Grab, who then contacted Chin yesterday morning, lending support to the company by offering a 10% cashback on top of the discounts offered on the website to users who purchase the products via Grab. Needless to say, the whole experience has been overwhelming.
“Initially we were not an online merchant with Grab but they included us. The solidarity is unprecedented because some of the customers opted not to take the discounts, just to support our business,” Chin says gratefully.
Chin says they tried reaching out and working with other small and medium enterprises (SMEs) but they too were affected and had their own set of issues to deal with. But in this time of uncertainty, the company decided to take a leap of faith by collaborating with a granola brand to produce granola bars.
“This was a last-minute decision. It was an idea we had and we thought why not try it to see if we can remedy the situation,” says Chin.
“This is in line with our vision of creating a range of healthy products. We spoke to the granola company and we are able to start producing it next week and the final product should be out in the next few weeks.”
The company is entitled to receive aid through the stimulus package announced by the government on April 6, says Chin. He has approached two banks to gain access to the Special Relief Facility (SRF) fund but realised that different banks had different criteria, although the government and Bank Negara Malaysia announced a blanket policy.
“We approached two banks. One said it needs to have three years of our company’s financial data whereas the other bank only needed six months worth of data. But the latter bank also told us it is focusing on its existing customers. So it seems that the implementation is dependent on banks,” Chin explains.
He also tried applying for assistance through imsme.com.my, which was set up and managed by Credit Guarantee Corporation Malaysia Berhad (CGC), but the application email bounced back, which he believes is due to high application traffic.
Despite these monetary challenges, Chin says he believes that the subsidies and monetary incentives should go to other companies that need it more than Jobbie does. “The only negative we see happening at this point is if we cannot deliver these pre-orders in time and start refunding orders because once the MCO is lifted, we need to wait for the suppliers to get to us and production could be delayed by up to a month,” says Chin.
“Right now, we’re looking at taking up a loan for capital financing, in the event we need to refund the orders placed for the 45-day pre-order. But we really want to find a way to fulfil the orders because 80% are from new customers and we would like to retain them.”