In the second of a four-part series on multi-generational F&B firms, Lee Xin En speaks to the 34-year-old third-generation owner of Cheng Yew Heng Candy Factory, Mr John Cheng.
How did Cheng Yew Heng begin?
We are called Cheng Yew Heng Candy Factory. We don't produce candy any more, but we used to in 1947, when we first started.
We made hawthorn, known locally as san zha, sour plum and preserved fruits. Those were traditional Chinese candies.
Today, we retain the name for heritage purposes. Cheng is the surname, Yew stands for friendship in Chinese and Heng is happiness. What it means is that the Cheng family, together with its friends, brings about happiness .
In the 1950s, we started selling rock sugar. That was also when my father took over from my grandfather. We stopped selling san zha because of strong competition from imports from China.
Today, we are Singapore's only sugar manufacturer producing rock sugar, red jaggery sugar and black jaggery sugar. It's a very traditional business that's mainly business-to- business. We are also the sole distributor for Khong Guan flour and we sell sugar all over Singapore - supplying to the industrials, as well as companies like BreadTalk.
When did you join the business, and how was it like easing into it?
I came in in 2008. I had worked in a bank for about a year, and my dad's health was ailing. He died a few months after I joined the business. I was blessed to have experience at HSBC, where I started as a business development executive working in the operations department.
But I learnt from scratch. I had no proper training. Everyone in the company was busy firefighting.
Because of the nature of my previous job, I was able to sit back and look through our processes. I looked at how we did our manufacturing, I timed processes and carved out the entire process.
What were some changes you made?
In my job at the bank, I looked at the bank's internal processes and that actually helped me here. I spent the first five years here improving processes as well as strengthening our foundations.
For Cheng Yew Heng, we started off small, we added a lot of staff along the way, but a lot of the processes were not developed.
For example, our customer service wasn't very good. Most customers call us for sugar - we didn't have to call them. But the climate has changed and we have a lot of competitors coming in, so customer service has become very important to us.
We moved a loyal staff member to the credit side because while she knew the customers, the service wasn't good. We had complaints - sometimes when it was busy, they would just pick up and hang up. You could have done that many years ago, but not now.
I also changed how long we work. That was a very big thing then - if my dad was around, he would probably say no. This was in 2008, when sales weren't so good as the economy was bad in 2008 and 2009.
We had to consolidate our delivery or we would be running up additional costs. So one of the things I changed was moving from a six-day to a five-day week.
There were things which we had to change completely - from not doing, to doing. For instance, we never knew how much sugar we cooked. For each batch of sugar, we didn't know what the input was. It's quite mind-boggling, but... we didn't know what went in, and we didn't know how many bags would come out. If there is no stock, the staff would tell the customer that there is no stock. We now measure and record our processes, so it's been a 360-degree change.
What is the biggest challenge for the business?
It's consumer education. It's telling people that sugar is not like cigarettes; it's not bad for you.
Sugar is for taste, it's for energy. In our packaging, we include that sugar is for energy and to be taken in moderation. Even green tea can be harmful in large quantities; you can get green tea poisoning.
Also, a lot of people still don't know that our products are made in Singapore. They think that everything that is manufactured is from overseas. We are the only rock sugar manufacturer in Singapore.
Our products are very traditional, so our challenge is, how do you turn it into a product which people will use every day?
How do you plan to reach out to consumers?
We created rock-sugar sticks. It's been in the market for a while, in Europe and the US, where you mainly find it in high-end hotels and cafes. For us, the innovation was the flavour, having local flavours like Singapore Sling, which is a mix of whiskey and pineapple, as well as jujube, which is red dates.
In April this year, we launched the Jewels series of rock-sugar sticks. The reason we decided to go into the consumer business is that we want to educate. The younger generation doesn't understand traditional products. They don't cook enough, so they wouldn't know the difference between refined and rock sugar. That's why we have to create new products so that we can raise awareness. It's through product innovation that we can attract the younger generation to use our products in an everyday way.
What are you most proud of in terms of your achievements?
Next year, we're celebrating 70 years in business. It's not something to be taken for granted. I'm happy and proud that we are a family business that is growing and finding ways to change. It doesn't mean that if you're around for so long, you cannot improve. It's about improving processes, getting foundations right, and now we're moving on to the consumer side.
Furthermore, we're still expanding our business-to-business side. Our trading volumes speak for themselves: Last year, we traded about 170,000 tonnes of refined sugar; we usually trade about 100,000 tonnes.
You produce rock sugar and red jaggery sugar, usually eaten with putu mayam (stringhoppers). I can't imagine many people eating putu mayam. How are the sales for rock sugar, and how do you plan to grow?
Our sales for rock sugar are still steady. One challenge for us is not being able to produce enough because of land space and labour. Hence, we aren't able to fully capitalise on our space to produce more. So our plan is to redevelop our site. Our site takes up 30,000 sq ft - we want to build it up to 80,000 sq ft.
This year, I'm targeting China, so I travel quite a bit. We are already on Tmall and we work with International Enterprise Singapore in the Tasty Singapore initiative to get our products into China. We're also looking into traditional business- to-business in China, and building our market presence there.
This article was first published on August 24, 2016.
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