Man of steel
Eric Leong of Mlion shows how bearing the cost of mistakes can lead to trust and rewards down the road
Mlion Corporation, the foundation steel provider, has successfully executed many projects across Southeast Asia. However, a project fondly remembered by co-founder and managing director Eric Leong, named EY Entrepreneur of the Year 2020 Singapore award winner for Industrial Solutions, was one that failed.
In 2015, Mlion was contracted to conduct pipe roofing for the Hong Kong MTR subway. The idea was to use steel pipes to shield underground tunnels and prevent soil from caving in, but things did not go as planned during execution.
“We actually screwed up; we misunderstood and miscalculated the project requirements … The delivery was fine but when they started the installation, there was a problem: The alignment was not good enough,” recalls Leong in an interview with The Edge Singapore.
Rather than push the problem back to his customer, Leong and his team offered to scrap the existing pipes and supply new pipes of the correct specification. The project resumed smoothly thereafter. “Because of that, we won the customer over by solving the problem. Of course, we lost money, but we learned so much through that process,” he says.
When the tender for the Thomson-East Coast Line was called that same year, Mlion mentioned the costly mistake in their pitch. According to Leong, that sat well with the Land Transport Authority (LTA). “We won the contract simply because we told them we went through this mistake, we learned the lessons, we know what works and what doesn’t work,” says Leong.
“That was the main reason why we managed to win those five projects in the Thomson Line. LTA even went one step further to recommend us to some of the contractors to consider us as a supplier as well,” adds Leong. Mlion Corporation is one of the suppliers to the Downtown Line.
That Hong Kong MTR episode is something Leong will remember and hold as a value for time to come. “Never try to cover up or cower from a problem but take it as a learning point to improve on the processes and avoid similar mistakes. It is the way we solve the problems for them that makes the difference. Profits can always be made again but trust is very hard to rebuild once it is broken,” he says.
Engineering days
Before Mlion, Leong had managed some very different businesses. As a university student, he set up a bicycle distribution company with a friend while in his first year of reading mechanical engineering.
“I love cycling. So, when a few brands wanted to bring BMX bikes into Singapore, we grabbed the opportunity and started the distribution,” says Leong.
The business was profitable and Leong could even afford to sponsor riders and competitions. However, as the schoolwork became more demanding, Leong and his partner sold the company to a competitor in his third year at Nanyang Technological University.
After completing an internship at a shipyard, Leong realised he did not enjoy being an engineer. “It’s a tough life. You wear overalls, you climb up ships and go down into the cargo hold; it wasn’t fun.”
So when Leong graduated, he joined McDonald’s as a management trainee, where he worked parttime in his final year of studies. “It was amazing! I learned a lot in terms of dealing with people and handling staff,” recalls the 35-year-old.
But his parents had other plans for him. After hearing that a family friend needed help at his steel company, they persuaded him to leave the fastfood chain. “They told me, ‘If you can sell burgers, then there’s no problem selling steel.’”
Leong’s next stop was the Singapore office of Oriental Sheet Piling, a subsidiary of ArcelorMittal, the world’s leading steel and manufacturing giant, where he found an “impossible” task waiting for him and colleague Sean Cheong, who later became one of the co-founders of Mlion.
“We were tasked to sell all these products that were made in Europe and we found that it was impossible because of the price and the duration it took to ship down from Europe. Instead, we found that it was easier trading — buying from China and reselling to Southeast Asia. The Chinese factories could not sell directly to end customers because they never understood what the locals required. That gave us the idea to start the business,” Leong says.
However, Leong did volunteer to lead the company’s team in the Philippines and even managed to turn the business around.
Men of steel
Being more familiar with the industry and growing with confidence, Leong set up Mlion in November 2011 with his father, who had spent over 30 years at Shell before working for a steel pipe company in Hong Kong, and Cheong.
Since its launch in Singapore and the Philippines, Mlion has expanded into a handful of Southeast Asian countries , along with Taiwan. The company also has plans to enter Cambodia and Myanmar. Today, the company’s operations here and in the Philippines account for over 80% of its revenue.
But starting out in the Philippines proved a lot tougher than expected. As foreigners, Leong and his co-founders found it “extremely difficult” to set up a company fully owned by non-locals. Among the challenges they faced was the red tape. For example, they waited for an import permit application for more than a year and half before being rejected.
“Because we could not import, we had to use distributors to help us to resell to the local market, until one of my distributors asked me over dinner, ‘Why don’t we set up a joint venture together?’” says Leong.
He agreed and proceeded to move his young family of four to the Philippines in 2016. “In a month, we got the import permit. From there, it was history in the making.”
In less than a decade, Mlion has grown steadily, supplying steel to ports and waterfront developments, civil excavations, and power generation projects across Asia. The company designs, sources, stores and delivers custom-made steel sheet piles, steel pipes, steel tie rods, long and flat steel products, crane rails, and wharf accessories.
Staying shipshape
Leong says Mlion’s vision is to add value responsibly to an increasingly interconnected and prosperous world across the global supply chain.
But despite Mlion’s recent successes, the company found it challenging during the Covid-19 pandemic, given it had operations in so many countries. “When countries started locking down, they were announced in the middle of the night. We had to get on the phones and call our staff overseas to guide them on what to do next,” says Leong.
Although construction work had stopped across the region, Leong and his team simply fell back on their backup plans. “We were prepared because we knew a recession was coming; we already played out certain scenarios,” says Leong.
“We tried to be as prudent as possible, to keep sufficient cash in the company. That helped us a lot through this year and we ended up doing probably our best year to date, in terms of both topline and bottom line,” he adds.
Indeed, for 2020, Mlion is on track to exceed its 2018 revenue, their best year on record. Although revenue dipped from $64 million to $55 million last year due to elections in the Philippines, Mlion has recorded revenue year-to-date in excess of $61 million with two months left for the year.
“Covid-19 has been difficult but I think it’s a blessing in disguise. It’s forced us to rethink our methodology in terms of running the business; it’s changed the business landscape,” says Leong, “Only the most nimble people who adapt to the change can survive this pandemic.”
Never try to cover up or cower from a problem but take it as a learning point to improve on the processes and avoid similar mistakes. — Leong