The right ingredients for his venture
Going into business during a financial crisis has turned out to be quite a good move for Lee Ting Ung.
NOT many would dare take the risk of starting a business in the midst of a financial crisis. But the husband and wife team of food ingredient supplier LCP Supplies Sdn Bhd took that leap of faith.
Lee Ting Ung, 57, who is the company’s managing director, founded the company during the Asian Financial Crisis in 1997 with his wife Alice Sim Chai Hay, 51, who is the company’s general manager.
Lee wanted a career change after spending seven years as a department head in a Singapore-based public listed company which does food ingredient supplies.
“I felt I could do better on my own but I was also aware of the risk. It was a risky decision as I was the only breadwinner in the family with four children to feed and I had other financial commitments to juggle with,” he says.
And in 1997, all the wrong factors were at play.
The business involves sourcing materials from overseas food ingredient manufacturers and suppliers from the US, UK, Germany and other countries and Lee is grateful that the company survived that period when the ringgit was affected by currency speculation.
“It was quite scary when the ringgit dropped from about RM2.70 to more than RM4.50 to a dollar. Our investments into the business could have easily been wiped out,” Lee shares.
Lee’s initial capital was mainly obtained from their savings and from a partner as it was difficult to get a loan
from the banks in those days.
With only a small investment at their disposal, Lee had to keep its operating cost low.
They started off with renting a light industrial factory in Puchong with just Lee and his wife running the ship.
“We had to do everything. We bought a second-hand forklift for RM12,000 and used it for about 18 years. My wife had to learn how to drive the forklift as I was away regularly to do sales,” Lee says.
Despite the initial scare of currency depreciation and some occasional incihere, dences here and there Lee says business went on smoothly after that.
And this, he attributes to his good relaclients. tionship with his clients Lee managed to convince clients from his earlier years in his previous company to come to him. Having a good mix of new clients also helped LCP grow.
“In less than two years, we purchased our warehouse in Puchong as it was cheap due to the economic uncertainty,” he says.
Lee also occasionally exported some products to Indonesia and Thailand.
“I would consider these overseas orders as an added bonus, but not somevely thing that we actively ventured into,” he acknowledges.
Lee worked hard to keep the company afloat. But he was also very much motional vated by his personal goal to change the food landscape in the country.
“I always believe that what we eat can impact our health. In Malaysia, more than 70% of adults are suffering from non-communicable diseases (NCDs) such as heart diseases, stroke, cancer, diabey tes, chronic kidney disease and others.
Many of these diseases are preventable by monitoring our food intake,” he explains.
For example, Lee says using a different ingredient to produce a sweet taste instead of using the usual sugar could help minimise the sugar level, which contributes to diabetes.
He also ensures that all its ingredients, raw materials and additives are of good quality.
“I would personally do a brief audit of all the chemical manufacturers and suppliers before we start to take orders from them. Quality is very important,” says Lee, who is a chemist by training.
Maybe such diligence played a role in the company’s growth till today. LCP currently has a staff of 31 serving over 400 clients from their 1.5acre office and warehouse in Puchong.
In 2016, they achieved a revenue of RM20mil.
Lee has plans to grow the trading aspect of the business further with new products. He hopes to introduce other elements in food manufacturing such as prebiotics, which he believes will do more to ensure that healthy ingredients reach the end consumer.
He started his own consumer brand, Fine Foods, in 2010 to make the healthy ingredients available in consumer pack. This enables Lee to also reach out directly to consumers apart from just selling to manufacturers.
Products under Fine Foods include low sodium salt, healthier sugar and colostrum. They are sold in pharmacies and selected hypermarkets.
But Lee’s consumer business is still finding its footing.
Having invested over RM4mil to-date and hiring biologists, dieticians and food technologists to develop products for Fine Foods, Lee says the consumer segment is nowhere near to breaking even. On top of that, they also need to pay contract manufacturers to do the blending and packaging of the products. But it is alright. “You may ask me why I still hold on to this loss-making business. The answer is very simple. It is our passion and something that I would like to do to help the community,” Lee says.
They also participate in local exhibitions to grow market awareness of their products and to educate the market on a healthier alternative to the regular food additives.
“This is a very difficult and tedious journey that requires tremendous stamina. We have channelled a lot of funds into this work with little returns,” Lee says.
But he hopes their effort will bear fruits someday and when that day comes, he hopes he’ll also be able to export these products.