Smartphones nearly killed this stock, but Tesla brought it back

SINGAPORE: The rise of the smartphone almost broke Tze-Mon Chuang’s company – but Elon Musk provided its salvation.

Singapore-based Memtech International Ltd has more than doubled its market value in the past year thanks to tie-ups with the likes of Tesla Inc. The manufacturer is a key supplier to Musk’s pioneering auto company, making plastic components for its battery packs.

It’s a far cry from just five years ago, when the seismic shift in the phone industry wrought by the advent of touch-screen devices saw Memtech suffer two straight years of losses.

Started by Chuang’s father in 2000, the company had been making millions churning out the plastic keyboards used in mobile handsets produced by Nokia, Motorola and Ericsson.

“That put the company immediately into a crisis and there was no way back,” the 42-year-old executive director of the company said in a recent interview. “The easiest way out was to use the money to invest in a totally different business but the existing equipment would become obsolete.”

Chuang knew he had to reinvent Memtech. Giving himself two years, he looked for ways to use his existing production lines.

It was during a conference held by a German customer when he realised that he could easily re-purpose his facilities to make automotive parts.

“We did some research and we found there was a trend of putting more plastic in the car to replace the metal parts, to make the car lighter, more fuel efficient and protect the environment,” Chuang said.

“We identified a whole list of potential customers.”

The executive opened offices in Germany and Michigan, close to potential clients, and started building prototypes and giving out free samples.

Today, Tesla accounts for about 3% of Memtech’s revenues, according to CLSA.