Small start, big ambitions
Entrepreneurial duo sets out to bring ideas to life through contract manufacturing
ITRIMECH Technology Sdn Bhd founders and directors Paul Chong Khee Hin, 48, and Michael Tan, 49, have learnt it is okay to start small. Otherwise, you will not start at all.
“One thing was clear to me: we have to appreciate every opportunity that comes our way. I don’t want to look back when I am older and regret that I could have done more but did not,” Tan says.
If they had not stepped out of their comfort zone, both Tan and Chong would not have been able to realise their full potential.
Both men had spent over 15 years as employees in the design and manufacturing industry before deciding that they were going to be the manufacturer.
But manufacture what, they weren’t sure.
“We spent many weeks together, thinking of what business we should get ourselves into,” Chong says.
While Chong and Tan drew up some plans, luck played a role in getting them started on their original design manufacturer (ODM) and original equipment manufacturer (OEM) venture.
In 2004, when they were in their mid-30s, a friend sought their help to source for plastic extrusion parts to replace metal materials used for air filter casings.
It seemed like a simple task. But Tan knew that it was now or never. This was their entry into starting their own business.
They quickly incorporated the company even though they had no staff.
They started out with design works for the required plastic parts and looked for tool makers and plastic moulders to manufacture the tools and moulds required for the manufacturing process. That first order for their friend led to more things.
But Chong notes that those first steps were not easy.
They had dug up about RM30,000 from their savings as initial capital for the business and Tan recalls that both their families were concerned that they did not have enough financial backing and experience as entrepreneurs.
“The first few years were difficult. For starters, we were prepared to live with a lower income – similar to that of a fresh graduate! We were prepared to do everything ourselves,” Chong laughs.
“We decided to take the challenge as we saw an opportunity in designing and manufacturing industrial products, bringing together our experience from the private sector in electronics sourcing, design and communications. And we relied on previous contacts who knew about our capability,” Tan adds.
They were very careful with their cashflow and made sure not to get into projects that required heavy capital expenditures. Many of the manufacturing activities that required machineries were outsourced.
Lady luck smiled upon them once again when a Norwegian company in a similar field took an interest in their work.
Subsequently, they started receiving job orders from the Norwegian company.
They helped the foreign company with design works for switch panels used in a ship’s bridge system. Chong says that was the start of their investment into software, which cost them over RM100,000.
Itrimech then moved on to multiple niche and high-value projects such as the Evacuaid, a strap-on torchlight with alarm and red LED for people working in hazardous locations such as mines and underground construction sites.
The job involved the design and development of mechanical, electrical hardware and firmware prototyping, and the product is now being mass produced in Norway.
In 2008, the Norwegian company’s owner decided to invest in Itrimech and came on board as a minority shareholder.
Although the company had healthy reserves by then, Tan says the new investor’s entrance into the company paved the way for more contracts from Scandinavian countries.
Itrimech now also designs and manufactures touch panels for the maritime and communications industry in that region.
Apart from that, it also produces the Highway Addressable Remote Transducer modem, a device that is used to monitor the flow of oil and gas.
Tan says the system features very low power consumption and was delivered to a Japan-based oil and gas firm in Malaysia.
Since then, the duo has produced over 30 products for various ODM and OEM contracts.
“Designing a new product has always been in our blood. Even now, we get excited and feel a sense of satisfaction when we see all our projects successfully launched or completed, no matter how big or small the project is,” Tan says.
Locally, the company is known for producing a prepaid air conditioning card system.
This system allows a hotel operator to control and monitor the power usage of guests. It features a smartcard that needs to be inserted
to have the air conditioning turned on. It is also used as a prepaid card which the guest has to top up with credit.
This eliminates wastage in terms of guests leaving the air-conditioning on when they are not in their rooms.
This system is currently being utilised in budget hotels and also hostels in educational institutions.
Apart from these innovations, the company continues to receive requests from various SMEs to bring “their ideas to life”.
“One SME contracted us to create an egg boiler that keeps half-boiled eggs in the same state for a full day. This reduces the manpower and time needed to prepare eggs.
“It also reduces waiting time. It is now being used in many food and beverage outlets,” Tan says.
Another interesting project that Itrimech was involved in was to create a hostel room key dispenser for a government agency that carried out training for various public service departments.
“They came to us with a problem - trainees from all over Malaysia would arrive at the centre at differ- ent times, which meant the front desk officer had to wait for them,” he says.
With the key dispenser, a card with a password is mailed to trainees who will then slot it into the machine upon arrival and key in the password to have the key dispensed.
“As a security measure, the administrator can reset all the passwords as and when needed,” Tan says.
The one-off project, valued at RM30,000, is not the only project with the potential to be used by government departments.
They also created a weapons storage system, which was contracted by an SME for a foreign military to keep track of the movements of the weapons. It also uses a thumbprint reader to ensure only authorised persons have access to it, doing away with conventional recording using logbooks.
Now that the company is able to provide design, development and manufacturing services for low-volume, high-mix electronic industrial products, Tan says Itrimech is looking at more mass produced items.
One of the projects that they are working on is the supply of LED turn signals for a Tier-1 Proton vendor and for Toyota Indonesia.
Supplying close to 25,000 sets of turn signals a month, Tan says it is vital to ensure that defects are kept to a minimum.
In order to do this, the company cannot leave monitoring of the products to the eyes of the operators alone so they created a test jig that lets out an audible alert when it finds a faulty unit.
With most of their work ranging in value from RM30,000 for prototyping development to RM1mil for contract manufacturing, the company achieved RM6mil in turnover in 2016.
It has also recently produced its own key management systems that could be used by companies to control access of keys.
The company currently employs a team of 20 people.
Chong and Tan expect bigger things for the company in the future and are looking forward to moving into their own 13,000 sq ft semi-d factory in Shah Alam early 2019 from their current 5,000 sq ft rented industrial lot in Puchong.