Reward in taking risks
Radiator supplier has cornered a third of the market
SYNERGY Radiators and Auto Parts Sdn Bhd co-founder Allen Fam Toong Cheng, 41, knows there is a reward in exploring new opportunities.
When he decided to venture out on his own in 2004, he explored as many opportunities as there were and dabbled in a few businesses with his partner Chang Bah Yuan, 39, before they founded the auto parts wholesale distribution company in 2008.
There is no better time to take risks than when you are young, says Fam.
“Simply wanting to make a better living and to create a business of our own, we started to borrow money from our family members to start our company,” Fam says.
While going about their business, they observed a growing need for radiator supply in the automotive industry.
“Car ownership is on the rise. Unlike the air conditioning, where the driver could wind down the windows when it is not working, the radiator is a necessity to cool the engine,” Fam says.
Subsequently, the duo brought Kent Woon Kam Kiat, 40, in to start Synergy Radiators.
They started business in a rented shoplot in Semenyih, Selangor, and looked into every part of the operations on their own; Fam looked for sales and Chang sorted out logistics while Woon spent over two months looking for the right original equipment manufacturer (OEM) to manufacture the radiators.
Fam banked on the relationships he had built over the years to help them get off the ground. Many of the suppliers, he says, were helpful and he was given favourable credit terms.
He notes that getting into this business was more capital intensive than his previous ventures as the radiator wholesale business required bigger advertising and promotion expenditure to promote their own brand.
Additionally, manufacturers would only produce the goods for you once they are paid, which means the upfront cost to obtain their goods is high.
“We looked through six factories in China to manufacture our products. Some gave us quotations, some gave us a tour. Those that gave us a tour of their manufacturing facilities gave us more confidence in their capability to produce the product that would meet our quality requirements,” Fam says.
Woon, who was from the radiator parts industry, decided to take in 300 units to test out the OEM’s qual- ity as well as market acceptance.
“We started approaching automotive parts suppliers and workshops to use our products. To further establish our brand, we started advertising in automotive enthusiast magazines and sponsoring local motor races,” Woon says.
Although it took a while to gain the support of suppliers and workshops, Fam says their hard work has paid off.
Today, they have about 35% share of the radiator spare parts business.
“Users go to mechanics to ask for our products. That is a testament that users know about what is good about our products,” Fam says.
Moving forward, they are looking for opportunities to sell their products in the South-East Asia region via local distributors. There will be risks involve but for Fam and his team, there is also reward in taking risks.