Munchy's story: The rocky road to success
BEING an entrepreneur is a way of life - not something that people who like to make a fast buck can stomach, if Tan Chuan Kok's experience is anything to go by.
The 47-year-old managing director of Munchy Food Industries - Munchy's for short - said it was a roller-coaster ride for him and his family, especially during the Asian Financial Crisis in 1997.
At that time, the biscuits and wafer company had just invested RM30 million (S$10 million), mostly raised from bank loans, in a new factory when the economy went south.
"We were at the height of our expansion, with equipment suppliers and bankers to answer to," Mr Tan recalled at the company's factory in Tongkang Pecah, Batu Pahat, Johor.
"Due to currency fluctuations, the costs had ballooned and we were not able to secure additional financing for the equipment. We told the equipment suppliers that they could take them back or they could let us use them, and when we had the money, we would pay them," he said.
This was make-or-break time - and Munchy's did not just survive; they have thrived in the years following the crisis.
Last year, the company's revenue came in at nearly RM500 million.
Mr Tan shared that his brothers started the business in 1991 at the urging of their father, who invested RM80,000 in it.
Then, they had a staff strength of five, working out of a rented one-acre factory on their father's existing biscuit manufacturing premises.
To stand out, Munchy's made wafer rolls instead of the conventional cream crackers.
In 1995, the company began exporting to Indonesia, Singapore and Thailand. They also did contract manufacturing for multinational food companies.
In 1996, his father's company was acquired and the new owner wanted back the land where Munchy Food Industries had been set up. This meant they had to move.
A year later in 1997, just as the new factory was ready to roll, they promptly found themselves in the eye of a financial storm. Fortunately, the supplier decided to gamble on them.
The company started producing four varieties of biscuits with the help of 130 workers.
By the end of 1997, it had posted RM14 million in revenue.
Today, the company, with about 1,600 workers at its three plants in Malaysia, Indonesia and China, exports over 100 wafer and biscuit products to over 50 countries, including Japan, China, Indonesa, Britain, India and Australia.
Said Mr Tan: "We need to continue to understand market demand. In Malaysia, consumers might prefer chocolate but in China they might prefer fruity tastes like lemon."
THE STAR/ASIA NEWS NETWORK