Monday December 1, 2008

Munchy’s a dream come true for Tan brothers


They aim to make it a global brand in the next 10 years

IT started as a dream for the two Tan brothers to build a business together but their family-run operation, Munchy Food Industries Sdn Bhd, has flourished over the decades to become a highly recognised and successful brand.

Chief executive officer C.K. Tan said Munchy was started by his brothers S.K. and L.K. as a cottage operation in Johor back in 1991, producing wafers, wafer sticks and biscuits with a second-hand wafer machine.

“We started as an OEM (original equipment manufacturing) contract manufacturer for a local company but we realised that we wanted more. We wanted our own brand,” Tan told StarBiz in an interview.

He joined his brothers in 1994 while two other younger brothers joined in 1996.

C.K. Tan with some of the company’s products

“It was not our intention to turn this into a family business. It just evolved,” Tan said, adding that he was working in the United States after graduation and had not thought of joining his brothers then.

“My father wanted me to come back and work together with my brothers. I have no regrets. It has been a fun 14 -year journey for me and I am still enjoying it,” said Tan, who has an IT background.

In 1997, Munchy launched its domestic sales and marketing arm, Munchworld Marketing Sdn Bhd, to help the company further penetrate the local market.

“We use Malaysia as a platform and build our own brand, Munchy’s. It took us 10 years to get to where we are today. Our next 10 years is to grow Munchy’s into a world brand,” Tan said.

He said the company was lucky to have survived the Asian financial crisis in 1997. Munchy, Tan said, had grown from strength to strength. Its revenue jumped to RM50mil in 1999 from RM20mil in 1998.

In 2002, the company decided to move part of its operations to Kuala Lumpur to promote itself and strengthen its brand.

However, its manufacturing facility remains in Batu Pahat, Johor.

In the same year, the company embarked on a re-branding exercise and re-designed its logo.

“Within 10 years, we grew from a zero base to become the largest Malaysian brand,” Tan said, adding that its products were available in about 50 countries.

“We will allocate more funds for marketing to grow each overseas market in a big way,” he said.

Munchy’s major markets are in Asia, with Indonesia, Thailand, Singapore, Taiwan and Japan being its key markets.

Overseas sales now contribute 25% to 30% to total revenue and the management aims to grow this to about 50% by the end of next year.

The company also expects export sales to hit RM100mil this year and revenue to reach RM300mil compared with RM250mil last year. “We are aiming for an annual turnover of RM1bil by 2018,” Tan said.

Apart from growing its export markets, Tan said the company believed in continuous product development.

“A lot of innovation went into the design and packaging of Munchy’s products. Until today, we are still trying to improve our quality and packaging,” he added.

Tan said he ws optimistic the group would be able to weather the current economic slowdown.

“Our business is quite recession-proof. We are doing internal cost cutting as well,” he said.

“It is a different challenge everyday. We just have to face it, re-strategise and cope with it.”

Tan said a listing was also in the pipeline but this would not happen so soon.

“We are more than qualified to go for a listing but it is not as glossy as what people think. We want to keep the company for ourselves for a while,” he said.

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