Spicing up a brand
Spices and seasonings manufacturer builds value to stand out in competitive market
BEING asked to wind down a company straight out of graduation isn’t exactly an ideal way to kickstart a career. But that was what Garry Gan, a mechanical engineering graduate, was tasked to do.
The company, which manufactured flour and curry products, was a family investment that went awry.
In 2004, Gan took over the debt-ridden company and engineered ways to keep its operations afloat to pay off its debts. Although he managed to breakeven on its cashflow after three years, the company was in a state beyond repair.
It was a challenging time. What kept him going was the stubbornness of youth.
“I didn’t want to be the youngest bankrupt among my friends,” laughs the 35-year-old.
When operations somewhat stabilised, he decided to start a new entity to reboot the business. Gan founded Hexa Food Sdn Bhd in 2007 to manufacture herbs and spices for the local market. While he was able to reuse some of the facility from the previous company, Hexa was very much a fresh start.
Coming off from his experience of winding down the previous company, Hexa, he says, was a walk in the park.
“Hexa came with a plan. We knew what we wanted to do for the first three years, which was to focus on building the brand,” he explains.
One thing that the previous company lacked was brand strength, he notes. This made it difficult for it to secure sales and funding.
According to Gan, brand investment commands about 5% margin or more.
While running the new business itself was relatively easy, brand building was not as simple. Unlike larger established players in the market that have big advertising budgets, brand building for SMEs is like running a very long marathon. It boils down to what you do in your day-to-day operation, says Gan.
As a new company, it was important to focus on making the right financial decisions, managing accounts, getting the right human resource, operating a stable production and cultivating a healthy culture. All this will eventually help to instill confidence in the Hexa brand.
And as a small entity, there was little room for margin of error. Mistakes in any of these areas will set you back for some time, he says.
Getting quality ingredients and building a strong relationship with its suppliers were also key to Hexa’s growth in its early days.
Hexa’s business was initially focused on the business-to-business (B2B) market. Gan wanted to ensure the company was on firmer footing and for the brand to be stronger before going into the retail segment.
The market then was, and still is, dominated by the likes of Baba’s and Adabi. Apart from the big boys, some 200 other smaller players are vying for the attention of customers.
“If you go to supermarkets, you