By CHOO MING JIAO, FELICIA GAN PUAY TIN and JONATHAN LOH DONG YUN

AS ITS name suggests, Tengah Engineering and Hardware Pte Ltd is primarily a distributor of building and hardware materials ranging from construction equipment and industrial safety tools to office furniture, power tools and sundry items such as nuts and bolts. However, beyond its core business, Tengah also has a diversified array of subsidiary businesses such as maritime engineering services, shipbuilding and even new media platforms on the Internet.

Born in a storm

Tengah was founded in 1997 by Ng Boon Chwee and Ong Bok Cheng. Before they joined hands, Mr Ng was a lecturer at Singapore Polytechnic with a specialty in microprocessors while Mr Ong was with a leading industrial engineering firm.

So why did they choose to start their venture during the stormy economic conditions of the Asian financial crisis? Baffling as it might seem, Mr Ng believes that was the perfect moment to start their enterprise.

'During the '97 slowdown, the Asian market fell to its knees, rental rates plummeted, wage expectations shifted as retrenchments grew,' he explained. 'We therefore took advantage of the cheaper operational and start-up costs to begin our business.'

Their very first office was located in Bukit Batok because the rent there was low. Initially the founders had to do everything themselves: from physical delivery of goods to clinching deals with their customers and suppliers. This gave them a solid foundation in the minute details of managing a business. In 1998, their big break came in the form of a contract with pharmaceutical giant Adventis. Tengah delivered and this paved the way for subsequent growth.

In 1999, Tengah officially became a registered company. Today the Tengah is recognised as one of the major players in the hardware and industrial equipment distribution industry. In the last four years, Tengah has turned in an average year-on-year revenue growth of some 40 per cent. Tengah has also garnered various SME 500 Awards before winning its inaugural Enterprise 50 Award in 2008, a clear recognition of its success.

It's all about the customer

Tengah prides itself on its customer-oriented business model. Its goal is to serve the customers - by providing a one-stop procurement solution by making a wide range of products available. This is convenient and saves time, especially for customers who prioritise value and efficiency above all else.

With a fleet of vehicles ready to deliver any time, a wide range of high-quality products and a well-trained sales team, Tengah is in good shape to handle customer inquiries and orders.

The company is also constantly looking for ways to make prices more affordable and add value to its offerings.

Cost management first

The limitations presented by the various economic crises that it has ridden were excellent learning opportunities for Tengah. Among other things, its founders used them to put in place an effective and efficient cost management system.

Tengah's staff works together in close clusters and teams, occasionally even undertaking concurrent roles and responsibilities during peak periods. The Tengah workforce has thus remained lean throughout.

The company has also resisted the temptation to purchase its operating premises even at favourable valuations at different times of its history, as the large capital outlay would have inhibited its strategic goal of growing its business.

You want it, Tengah has it

Today, Tengah is able to deliver not just hardware tools and safety equipment but also a comprehensive portfolio of products ranging from basic building equipment and materials to construction grade sand and aggregate cement.

Over the years, Tengah has also consciously built up a group of wholly-owned subsidiaries and affiliated companies, including a scaffolding services company, a maritime engineering services company and an oil and gas rigs engineering services firm.

This diversified portfolio has helped to offset the seasonal variations in demand, thereby allowing Tengah to mitigate its overall business risk. It has also allowed the company to stay one step ahead of the competition as it moves towards its vision of being a one-stop product and service provider in the many related business and industries.

So today, Tengah's customers can be in the light-manufacturing business or the general civil construction business and, in either case, Tengah will be able to serve them. It will suit up workers, provide them with its popular Nitti safety shoes, arm them with the latest handheld Makita tools and then deliver the fencing, bricks, cement and sand required by customers at their work sites. Tengah's associated companies can also construct the scaffolding needed at these sites as well. This seamless business model has served both customers and Tengah well.

Looking ahead

The current global economic downturn has affected many companies around and Tengah has not been spared. While its business has not reduced drastically because of the ongoing construction projects that began before the downturn, Tengah's customers have clearly taken more care in selecting the right products that fit their shrinking budgets.

However, with the government's stimulus efforts which will see the acceleration of public building projects, together with its cost containment practices and its wide stable of products and customers, Tengah looks set to ride out the downturn quite comfortably.

Its founders have put together the nuts and bolts of success for Tengah. We anticipate the day when Tengah goes public with its ticker symbol TNG on the Singapore Stock Exchange.

The writers are students of the NUS Business School

This article was first published in The Business Times.