Stepping into bigger things
Frozen food manufacturer looking to roll out ready-to-eat model
BEN Eng, 40, may be the second generation helming frozen seafood producer Fusipim Sdn Bhd, but his rise to the top was anything but an express route.
When he came onboard the company in 2003, the food science graduate struck it out as a salesman.
“My father brought me around to meet customers and taught me some sales skills. Then I got interested in doing sales. We didn’t have a sales team at that time. So, slowly with my experience, I built our team and I became the sales manager,” he says.
Once he felt the sales team was able to move forward on their own, he looked into developing another team in the company. This time, it was closer to a field he was trained in – quality control.
Product quality and safety are important in food production, he notes, particularly as food-related regulations get tighter and the market becomes more competitive. This also led to the setting up of another team – the research and development department – to continue innovating and developing new products for the company to stay ahead of the competition.
One advantage Eng had in product development was his time spent in sales.
“I got to meet our customers. So I know what the market wants and we can develop what the market wants,” he says.
Eng went on to become the factory manager, overseeing efforts to automate its production lines, before eventually taking the reins.
Eng has certainly seen the company evolved over the last 16 years, and more so from his childhood days.
The company, founded by his father, a fisherman, has grown from a cottage fish ball maker to a frozen seafood exporter. After some time of plying the waters for a living, senior Eng had decided to hang up his nets and learn to make fish balls. When he noted that he could make a good business from his new skills, he went ahead and registered Fusipim as a company in the late 1980s.
In the early 90s, the manufacturer started modernising its operations, adding on more production lines as it catered to a growing market.
“I think the biggest change for us was our transformation from our manual operations to an automated line. It was quite difficult,” says Eng.
Fusipim embarked on its automation journey about two years ago with an investment of Rm3mil. Because of the big space required to fit in the automated lines, the company had to build a new 3-acre factory to house its new machinery and long assembly lines.
The new facility brings its current capacity up to 30 tonnes a day. But Eng notes that there is room to increase production by adding more assembly lines.
With the added capacity, it is crucial
for Fusipim to grow its market.
Expanding downstream
According to Eng, demand for frozen products has increased over the years, mainly due to a shift in preference from canned food. This is thanks to the wider selection of products available in the frozen section.
Fusipim produces a variety of frozen goods such as fish balls, tofu and pau as well as batter mixes and sauces.
“There is also a growing trend for steamboats so people are buying foods like this. And now, most households have freezers, so it shows that the market is mature,” he adds.
At the moment, 70% of its sales is derived from the local market. Fusipim has a strong presence in the retail and wholesale market, Eng says, and is now targeting the food service industry including restaurants and chain outlets such as cinemas.
But apart from just growing its supply business, Eng also hopes to venture downstream into the ready-to-eat market. This will include operating its own kiosks and food trucks to directly serve consumers.
Notably, this will be a different ballgame for Fusipim. Not only will it involve a new brand building exercise, there is also a whole new set of competitors to contend with. As it is, there are already plenty of convenient options available to consumers including established outlets like Family Mart and 7-Eleven.
Sure, it won’t be a walk in the park, Eng acknowledges, but he emphasises the team’s willingness to learn and do something new.
“We need to keep growing the local business and we still need to build a stronger platform (for our brand). We are already strong in the supply side and it is quite a saturated market (as we already have distributors in every state). There are other competitors and freezer space is limited. So we need to move on to something new to grow demand and open up new growth areas.
“We are targeting the young (demographic for this new business) as most of them want convenient food. And we are slowly diversifying to more product range (to cater to this). If the model works, we can showcase it overseas,” he says.
Eng is fairly confident of its plans, which will be rolled out next year. While it has the potential to grow into a new franchise business, he cautions that much of it depends on market response.
Other markets
In the meantime, Fusipim is also keen to grow its export markets. Currently, it exports to 16 countries, including China and the US.
Although Eng prefers the export business – which is simpler than local sales as it works with partners who already have established distribution networks in those countries – he notes that it is not always easy to penetrate a new market.
Eng recalls Fusipim’s first attempt at exporting back in 2007 to Brunei.
“We suffered the first few years and we realised (the eating culture is) different in many other countries. There, their preference is more on steam- and soup-based type of food. Whereas our products were more of deep-fried type products because Malaysia prefered deep-fried type foods. That was when we started developing more steamboat products and we saw a pick up in sales,” he explains.
Additionally, every country has a different set of rules and regulations governing the food industry. This makes it difficult for the company to standardise packaging for the export market as each market requires a different language and labelling information.
A mistake can prove to be costly, as experienced by Fusipim some years back. The US Food and Drug Administration had audited its factory and had stopped it from exporting to the US due to the lack of allergen advice on its packaging. Fusipim was told to recall its products from the US, its biggest export market, and was not allowed in for a year.
Eng also points out that the export market can be competitive, particularly in advanced countries where there are already a lot of players. But such markets have good infrastructure to support growth such as freezer space, logistics and higher-income households.
On the flipside, its presence in developing markets would allow it to be a pioneer. Growth will be slow due to the lack of freezers in households, but steady in the long run.
“We work closely with both types of market,” he says.
It recently started exploring opportunities in the Indochina region and he expects this to take off in the future.
He hopes to grow exports to make up 50% of revenue in three to five years’ time. Of course, this requires some planning as Eng says sales channels have changed in recent years.
Eng is also looking to grow his local sales team by placing them with its partners in its foreign markets to expose them to international trade practices. This will help groom them for its future plans.
Still going strong
Eng’s vision for Fusipim is for it to become a world-class brand in the food industry.
This means deploying the right strategy through the right talent to capture the market. It requires a strong distribution network to have its products in every corner and in every freezer.
And he hopes to work with partners to achieve this dream. He says sales has grown 19 times from 2003 and he hopes to continue expanding. “When your business is small, you need to focus on what you are doing. When you focus, your company will grow fast. Once you grow, you need to make sure you grow in the right direction. When you get the right direction, your company will grow big.
“And when you are big, you need to stabilise it, slow down and grow deeper. I think that’s the position that Fusipim is in,” he says.
He emphasises that continuous learning and innovation will be key to its success.
“This industry has a lot of traditional businesses. Now, you are seeing a lot of second generation taking over. When they take over, many try to build their brand. So brand positioning is important,” he adds.
The biggest challenge for Fusipim at the moment is to get good talent for its growth plans. The company has about 300 people under its employment and has invested in technology to automate some of its administrative work. Eng says its strong core values and practices help with staff retention and he applies personality tests to ensure that the right people are in the right position.