Business

Saturday January 7, 2012

The sky’s the limit for Meru Utama

By M. HAFIDZ MAHPAR
hafidz@thestar.com.my


ADVERTISING played a key role in the introduction of the first user-friendly baggage trolleys at Malaysian airports in the late 80s.

And the person behind it was Patricia Ng, a housewife and part-time real estate agent who was later dubbed the Trolley Queen.

It all began in the 80s, when Ng was approached by a friend with a business proposition. He asked whether she would like to donate trolleys to the Subang International Airport (later Sultan Abdul Aziz Shah Airport). In return, she would earn the rights to rent out ad space on those trolleys.

Trolleys with a message: Baggage trolleys at the KL International Airport which promote the World Gas Conference.

Ng, who wanted to venture into business full-time, did not turn down the offer despite knowing little about advertising. She went from factory to factory, meeting potential suppliers to see if they could fabricate the trolleys.

“During those days, the trolleys at the Subang Airport were huge and not user-friendly. There were also less than 50 trolleys,” she recalls during an interview with StarBizWeek in Petaling Jaya.

“A supplier said it could do the job, but the trolleys were quite expensive at RM200 per unit. We (Ng and her business partner Wong Siew Kee) discussed (the design) with the supplier and modified them a bit; that’s how we invented this more user-friendly type, much lower and easier to push.”

Ng’s company, Meru Utama Sdn Bhd, supplied the first batch of 100 units to the Subang airport.

“They were so user-friendly and easy to handle that the airport kept asking for more. And other airports ended up asking us for free trolleys, too!”

She still hadn’t secured any advertiser, but not wanting to disappoint them, she fulfilled their requests and sent 20 to 30 units each to the small airports in Kerteh, Johor Baru, Penang, Ipoh, Kuantan and Labuan. She also wanted to build up her public relations with the Department of Civil Aviation (DCA), which then operated the country’s airports.

A year passed before Meru Utama finally clinched its first advertising account, Hitachi mobile phones. Hitachi signed up for a year, taking up panels on 100 trolleys at Subang.

Ng: ‘We want to have a minimum of 30% (international clients) so it would be quite balanced.’

However, it was partially a barter trade – half paid in cash and half with mobile phones!

She was nonetheless encouraged. “After the first advertiser came in, I realised that if I worked hard on this, there was potential. So I started reading the Yellow Pages and sending out proposals to all the corporates.” says Ng.

Her second client was Philips which asvertised on a few hundred trolleys at the international airports.

Philips also pushed Ng into taking up a new challenge: erecting a large-format billboard. It asked Meru Utama to build a three-sided 100-ft unipole for it at the Penang airport, and Ng accepted though she had no idea how it looked like.

The unipole, including the piling on the swampy land, cost almost RM420,000; Meru Utama easily made back its investment with a three-year contract.

It was the next client, Petroliam Nasional Bhd (Petronas), which spurred Meru Utama to expand its trolley fleet substantially.

The oil giant, which at that time was expanding its petrol stations in the rural areas, took up 2,000 trolleys at Subang as well as the smaller domestic airports under a two-year contract.

There was a break of a few years before Petronas returned as Meru Utama’s client, but over the years, it has proven to be a great believer in trolley advertising. Fast forward to today, and Petronas has again become Meru Utama’s biggest trolley advertising client.

The Trolley Queen continued to innovate in the 90s by introducing the small duty-free shopping trolleys.

In this case, necessity was the mother of invention. She was approached by Peter Stuyvesant, which wanted to advertise on a few thousand trolleys, but she did not have enough trolleys then.

“The Subang airport was so small and I already had 500 trolleys there. If I added another 300 baggage trolleys, I’d have to park them by the roadside!” she says.

Hard to miss: Meru Utama provides advertising space on KLIA aerobridges, with Maybank being the current client there.

Hence she invented the small duty-free trolleys – the kind that one can nowadays find in the satellite terminal in KLIA. She kicked off with a batch of 100 such trolleys at Subang and subsequently also supplied them to the Penang airport. “The sad thing is, I didn’t patent it,” she says.

Today, Meru Utama is much more than a trolley advertising company. It has diversified into various advertising platforms.

The DCA gave it a three-year exclusive advertising contract in Subang in the mid-90s, spanning the last few years before the KL International Airport (KLIA) took over Subang airport’s role.

Meru Utama was thrown another challenge by the DCA: it was asked to handle trolley maintenance and operations. Thus, it expanded its trolley-related role.

In 1998 KLIA, under Malaysia Airports Holdings Bhd (MAHB), called for tenders for a five-year advertising concession and Meru Utama was among the three players chosen. It was a very proud moment for Ng, whose firm competed against public-listed companies.

Meru Utama’s concession covered the arrival hall, while giant outdoor players UPD and Seni Jaya handled the satellite and departure areas, respectively.

Although the KLIA trolleys were not supplied by Meru Utama, it took on the trolley maintenance responsibility for those five years.

“At that time, I think we put in about 90 workers just to maintain and retrieve the trolleys,” she says. Meru Utama still had the trolley advertisement rights for the whole airport, she says, adding that Petronas took up 3,400 trolleys for both the satellite and main terminals in 1998.

Meru Utama won for the second tender exercise (2003-2006), and found itself with an exclusive concession at KLIA. This time, however, Meru Utama declined to take up the trolley maintenance after working out the costs.

For the third and current seven-year concession for KLIA (including the Low Cost Carrier Terminal), Meru Utama has the sole rights covering the whole airport. It won in a competition with 13 other bidders.

“While we were awarded these concessions, we were also given the challenge to take up highway concessions. We got an exclusive concession for the Kajang-Silk Highway for 33 years in 2005. Two years later we secured a five-year advertising contract for the DUKE (Damansara-Ulu Kelang) Expressway and for outdoor signages at Danga Bay Waterfront City (also for five years),” she says.

Currently all the outdoor billboard concessions are parked under Redberry Outdoors, allowing Meru Utama to focus on the airports.

Ancom Bhd, which controls the Redberry media group, took a 51% stake in Meru Utama in 2006.

Ng, who is executive director of Meru Utama, and her long-time business partner/operations director SK Wong keep a 25% stake.

Today, Meru Utama has exclusive advertising concessions for KLIA, LCCT, and Senai Airport. It provides various advertising platforms, including on the sides of aerobridges and at the walkalators, and does on-ground event promotions.

Not resting on its achievements, this month it plans to install two units of double-sided digital matrix at the baggage carousels, each consisting of six LCD panels measuring 6ft by 2ft.

The trolley ad business has grown tremendously. The company now has advertising rights for 7,510 trolleys at the three airports. And every single trolley has been taken up by Petronas under a three-year contract!

As for the upcoming LCCT dubbed KLIA 2, Meru Utama has also put in its bid for the exclusive concession.

On its financial performance, Ng would not disclose the actual revenue but reveals that annual revenue has doubled since 2008, when its current KLIA concession began.

She says the number of passengers at the KLIA/LCCT is growing (currently it is about 35 million passengers per annum) and airport advertising provides a captive environment and a premium channel to target corporate clients.

Meru Utama is targetting more international clients, which would allow it to expand its revenue base and boost its image.

At present, only 10%-15% of its business comes from international clients. “We want to have a minimum of 30% so it would be quite balanced,” she says.

Currently, 60% to 65% of its advertising space has been booked. “We hope to reach a minimum of 75% occupancy rate to meet our financial objective,” she says, adding that the renewal rate is “pretty high.”

Ng, who is unafraid of failures, is a model of entrepreneurship. “Along the way there may be a lot of hiccups, but just push forward. When you overcome the challenges, it’s really very rewarding,” she says.

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