ST: The story of Sheng Siong

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[tags] Sheng Siong MCP NTUC

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http://forums.hardwarezone.com.sg/showthread.php?t=2724383&page=4

He is known as the towkay  who drives a lorry.

For Mr Lim Hock Chee, managing director of supermarket chain Sheng Siong, thrift is more than just a word, it is a way of life.
He has built a chain of 21 outlets which embodies this philosophy too, by selling groceries for less.

This is the man who was once quoted as saying: "I don't believe in luxury.
Why have two beds when I can sleep in only one? Or have two coffins when I can be buried only in one?"

But last year, he reluctantly traded in his humble set of wheels for a swanky Lexus 460
at the suggestion of the company's executive director, Mr Tan Ling San.

Mr Lim says in Mandarin: "He said I shouldn't be seen driving a lorry since I represent the company.
If I do so, people might think the company is 'ill-treating' me."
Looking embarrassed, he adds: "I still feel very ill at ease. All the money came with the help of my employees,
but I wear and drive better than them."

He is referring to $40 unbranded short-sleeved shirts, such as the one he is wearing at this interview.
"This is very good already," he says. "In the past, I wore $10 ones from CK in Chinatown."
That's CK department store in People's Park Complex by the way, not Calvin Klein.
He adds: "My trousers used to cost no more than $20.
As long as the size fits, I'll wear them. Now, my most expensive pear costs $85."

For the record, he wore a long-sleeved shirt and tie for the photo shoot.
With greying, crew-cut hair and a slight pot belly, the 46-year-old looks a good five years older.

He is married to Lee Moi Hong, also 46, who is a director in the company, and they have three sons and a daughter aged between 13 and 23.
His eldest son is studying finance at Reading University in the United Kingdom,
and the rest are still schooling in Republic Polytechnic and Marsiling Secondary School.

The family used to live in a 1,500 sq ft space above his headquarters cum warehouse in Woodlands,
because it was more convenient to keep watch on the goods stored there after dark. Now, security guards do that job.
The family has moved to a five-room HDB flat in Hougang, but the space is still kept as a "rest room" for him during the work day.
He has that salt-of-the-earth air of a self-made millionaire, and is someone who is more at home sipping a cup of coffee
in a kopitiam than chilling out in a wine bar.

Ask him what he enjoys doing in his spare time and the self-confessed workaholic gives you a blank look.
It is only after some prodding that he offers "watching wuxia films like Tsui Hark's Seven Swords" and
"reading chinese classics and management books" as answers.
The busy boss doesn't use a Blackberry either. When he needs to jot down notes or list appointments,
he turns to his trusty 555 notebook , which fits nicely into the front pocket of his shirt.

On the cover of the latest one is written neatly, "Nov 1, 2007" in Chinese, the day he started using that particular notebook.
"I used to change notebooks every month, but then I realised it was too wasteful.
So now I'll use a fresh one only when I have filled up every page," he says.
For such a thrifty man, it comes as somewhat of a surprise that he wears a Rolex watch.
Smiling bashfully, he says it was a gift from a supplier in 2000, to thank him for hitting a certain sales figure.

He gave it to his younger brother. "Why wear a watch when you can check the time on your mobile phone?"
But it found its way back to him last year. He says with a hearty laugh: "My brother kept it all this while and gave it to me
as a kind of long-service award. I didn't know it was the same watch and was so touched that he had bought such a nice gift for me."



Small player, big heart
Those who have worked with him says he is a driven, hardworking man who believes in treating the employees well.
His staff get one free meal every day - a buffet-style one for those who work in the Woodlands headquarters and
boxed meals for the rest. These are prepared in a central kitchen.

Mr Tan Cheng Kwan, 38, Sheng Siong's assistant general manager who is in charge of supermarket operations, says:
"He always has the employees' interests at heart and will go out of his way to help anyone who has problems at home,
like giving cash incentives to those with young kids on a case-by-case basis."
"He feels that only when the employee is happy at home will he then be able to concentrate at work."

With just 21 outlets, Sheng Siong is considered a small player in a market dominated by the big boys such as
NTUC FairPrice (over 200 outlets), Shop N Save (over 45 outlets) and Cold Storage (over 30 outlets).
But its growth in recent years has been nothing short of phenomenal.
in 1985, Mr Lim and his brothers Hock Eng and Hock Leng, ran a provision shop in Ang Mo Kio measuring just 1,400 sq ft.
Back then, the shop's daily takings were only about $2,000. By 1988, it was well over $19,000 a day.

Now, Sheng Siong has about 3,000 employees and group turnover last year exceeded $580 million,
compared with a modest $45 million in 2000, when the chain started its rapid expansion.
The secret to its low prices is the way it maximises its profit margins by constantly challenging itself
to churn out higher turnover per sq ft of retail space, Mr Lim says.

"For example, if we can make $10 instead of $4 for every sq ft of retail space,
we can cut costs effectively and offer very reasonable prices to customers," he says.
One way of doing this is to provide speedier service so that more customers can be serviced in the same period of time.
And he is quick to stress that he does not believe in checking out the competition all the time.
"Rather than waste time comparing ourselves with others, why not look at how you can improve yourself instead?"
He is keen to dispel the myth that low prices come at the expense of quality.
"We have been able to keep our prices low because we are increasingly going directly to the product source,
thus eliminating the middlemen," he explains.

Although Sheng Siong has only six housebrands, a small selection compared to over 500 at FairPrice,
he says it is growing this segment of its business.
No one should doubt his resolve, especially not this son of a pig farmer, whose chinese name literally means "lucky star"
and whose nickname is Ter Bak (Hokkien for prok) because he used to sell pork.



Took vocational path
Born in 1961, the fifth of nine children grew up first in Jurong, then later in Lim Chu Kang and Punggol,
when his Dad turned to rearing pigs. At the height of the business, the family had 3,000 pigs and lived on a sprawling 90,000 sq ft farm.
When he was in Secondary 3 at Chinese high School, he decided to quit and do a two-year car mechanic course at the former Jurong Vocational Institute (JVI).
"I was struggling in English, managing just 20 or 30 marks," he says. "The water pump in our farm often broke down, so I figured if I learnt how to fix cars,
 I could help fix the pump too since the mechanisms were similar."

It proved to be the right decision because he thrived at JVI, staying in school every day to study and excelling in the practical aspects of his course.
The training has stayed with him all these years and until a few years ago, he was Mr Fix It at Sheng Siong, doing everything from sorting out
power trips to welding the handles on trolleys to make them more sturdy.

With a sad expression, he says: "There are other people who do the welding now. I can't do everything myself.
And because I drive a Lexus now, I can't do the dirty jobs such as clearing the garbage because that would mean getting the car dirty too."
After national service, he helped out at the farm for two years before he was forced to look for something else to do
when the Government started phasing out pig farms in the 1980s.
In 1984, when the farm was stuck with excess pork, he and his newly-wed wife rented a stall at the small Savewell Supermarket at
Black 122 Ang Mo Kio Ave 3 to sell chilled pork.
She was his neighbour in Punggol and they were matchmade by her sister-in-law.

Nine months later, the Savewell owner was in financial difficulties and asked if Mr Lim was interested in taking over an outlet for $30,000.
Although he was offered a stall in Bedok, which had the best location in the chain, he decided to stick with Ang Mo Kio as he was familiar
with the "uncles and aunties" in the neighbourhood. His father poured in $200,000 and Mr Lim roped in two of his brothers.
They changed the name of the 1,400 sq ft store to Sheng Siong, which means "rising" and "vegetable" in Chinese.

He says: "That was actually the worst location because it was located at the foot of a slope and was not visible from the main road.
On top of that, we had to climb up and down the stairs whenever we had to unload goods."
To attract customers, he and his siblings would carry heavy items for them up the stairs.
This was the beginning of Sheng Siong's tradition of "excellent service", Mr Lim says proudly.

We were very worried that the business would go bust, so we did everything without thinking too much," he says,
adding that the brothers each drew a monthly salary of just $800 until 1995.
Now, he earns more than $20,000 a month.
And go bust they did not. The business grew and started giving the big players a run for their money.

The biggest expansion in the company's 22-year history was between 2000 and 2005, when 14 new outlets opened islandwide,
including in Jurong, Bedok, Serangoon and Clementi. Sheng Siong at Tekka Mall, which opened in 2003, is the largest outlet, occupying 45,000 sq ft.
The expansion happened despite the economic slowdown following the 9/11 terrorist attacks in 2001, and the Sars epidemic in 2003.
Flashing his usual wide grin, he says the supermarket business is unique as it thrives under all economic conditions, good and bad.
"After 9/11, rentals went down and we seized the opportunity to open more stores," he says.
"Then when people stayed away from restaurants during Sars, we enjoyed brisk business because more people started buying food to cook at home."


(http://2.bp.blogspot.com/_iXax17F3EoU/R6_9JqdW1LI/AAAAAAAAAp4/xmDiaRwmIo0/s400/phpxiZPIw.jpg)
The chain has now become a household name and even has its own TV show, The Sheng Siong Show, which made its debut last May.
The game show, hosted by Kym Ng and Dasmond Koh, is into its second season and airs on Channel 8 every Saturday at 8pm.
It features a children's talent competition and a lucky draw that promises $1 million worth of prizes.
Business went up by about 20 per cent after the show started airing, Mr Lim says.
Sheng Siong's philosophy has always been to provide "speedy service, low prices and good quality" to its customers, he adds.
"In the early days, we used this tagline to motivate our staff: 'You have to queue to buy 4D, you have to queue in a bank,
but you don't have to queue in Sheng Siong'," he says.

"I can tell you we have the fastest cashiers in Singapore.
If we don't let our customers queue, then we are already ahead of our rivals."
Asked what is the most difficult part of running a multi-million-dollar business, he ponders for a while before replying:
"Maintaining our cordial family ties is not easy."

Currently, two of his brothers, three of his sisters, two sisters-in-law and one brother-in-law are working in the company.
His father, who imparted values such as thrift to his brood, in the chairman of the company but is not involed in the day-to-day running of the business.
Mr Lim adds: "Of course there have been disagreements and arguments among the siblings. Sometimes, I've also thought of quitting."
"That is why I hope we can be listed soon, so that we can keep Sheng Siong going without disintegrating, like so many other family-run businesses."
The interview winds yup and the board secretary invites this reporter to try their catered staff lunch,
which happens to be a sumptuous steamboat buffet spread featuring crabs, prawns and scallops that day.

Mr Lim declines to join in, mumbling about a slight pain in his leg.
Then, after saying goodbye, he walks away in brisk, firm steps, no doubt forgetting his pain as he heads for his beloved office, where his supermarket empire awaits.


Article from ST, 2008.


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[tags] ShengSiong

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recently SS in the news for the Elias market situation. would be interesting to be how it pans out.

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and they are going listing.

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i dun know if it's a norm. but 90% profit as dividend?
i dun know of any other stock other than those REITS that does something similar.
and they usually have a lower 70% range?

dun quite understand this newest stock. perhaps someone here can?