Business

Saturday June 27, 2009

It’s a long and tough journey for Ridpest

By RACHAEL KAM


MONEY doesn’t grow on trees and Ridpest Sdn Bhd founder and chief executive officer Stephen Liu knows it only too well, having gone through tough times and survived the financial and economic crises of the mid-1980s and late-90s.

Stephen Liu (left) with his staff Asmadi Sazali (centre) and Fathul Rahman Mohd Sabri getting ready for pest treatment duty

“Pest control has been a challenging industry since the 80s,” he says. “The market was dominated by foreign companies then and there was fierce competition among a number of small players who operated from homes and offered low prices.”

There are currently 600 to 700 players in the domestic pest control industry.

Liu, the major shareholder of Ridpest, founded the company with a partner in 1985 with a capital of RM7,000.

Later in the same year, the company took in another business partner, Angeline Hee, who is now executive director.

“Although the country was in a severe recession when we first started, I believed there were still ample opportunities to tap into the lucrative pest control market,” Liu recalls. “We faced great challenges during our early years in penetrating the market and creating our brand presence.”

Today, Ridpest is a stable company with 40 workers, and confident of achieving further growth through a franchise model.

“We are targeting to increase our franchise network to 45 franchisees nationwide by 2012, before we expand outside Malaysia to position Ridpest as a Malaysian-bred franchise with international presence,” Liu tells StarBizWeek in an interview.

Liu says the company plans to expand in countries such as Singapore, Indonesia, Thailand, Cambodia and China.

Locally, Ridpest is looking at all major towns such as George Town, Ipoh, Kota Baru, Kota Kinabalu, Kuching and Miri as well as more areas in the Klang Valley.

“By the end of the year we should have six more franchisees. We are targeting another six next year,” Liu says, adding that Ridpest currently has four franchised outlets in Shah Alam, Puchong, Kajang and Johor Baru.

Ridpest offers various pest control solutions to individual property owners and corporate customers, and covers the residential, commercial and industrial segments.

Its services include installing termite baiting systems, post-construction anti-termite treatment (corrective treatment), pre-construction anti-termite treatment (soil treatment), general pest service, as well as mosquito and lizard control.

Its various packages are priced from RM69.90 with some packages on a yearly contract basis of up to five years.

It has registered an average annual revenue growth of 10% to 30% so far, while current profit margins have gone up by about 15% due to cost savings, according to Liu.

By year-end, Ridpest expects to achieve about RM6mil in revenue, with a projected sales of RM9mil in 2010 and RM15mil in 2011, he says.

Through the years, Ridpest has implemented some innovative marketing strategies.

In 2001, it had a 100% money-back guarantee programme with a product liability insurance to cover termite damages for up to RM10,000.

Later, it improved the programme to a 100% risk-free guarantee by undertaking a client’s cost of redo treatment by another pest control company as well as giving away free holidays to Langkawi.

Subsequently, Ridpest upgraded its programme to the current 200% money-back guarantee if the treatment system fails to eliminate a termite colony within 120 days of its baiting process.

It comes with a free professional indemnity insurance that covers termite damage for up to RM50,000.

Liu says based on its research data, 46% of properties are hit by termites at least once in four years, and at least 11% are hit at least once every year.

“There are still many properties not protected against termites which can cause extensive damage. The outlook for the industry is still bright as termites eat everyday, every hour, and their activity does not stop even during a financial downturn,” he says.

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