Datuk Dexter Lau, the Executive Director of Kim Teck Cheong Consolidated Bhd – one of East Malaysia and Brunei’s largest consumer packaged goods distributors – talks about heritage, transformation and the inspiration behind his entrepreneurial journey.
Blood as they say, is thicker than water.
So, it’s certainly no surprise that most families in business have a desire to connect and contribute to sustaining their legacy across the generations. After all, when business leaders are trying to get their minds around how to raise the bar in their own business performance, where do they look to?
So, don’t be surprised if a good percentage admit to being inspired by fellow family members who led the pack with determination, courage and resilience. And such is definitely the case for Datuk Dexter Lau, the Executive Director of Kim Teck Cheong Consolidated Bhd (KTC) – one of the largest consumer packaged goods distributors in East Malaysia and Brunei right now.
“The KTC saga began in 1938 when my grandfather, Datuk Lau Yeong Ching, first started a small sundry shop in Sabah after arriving from Fujian Province in China with his own father earlier on,” recalls Datuk Lau fondly. “After World War II, this retail business eventually grew into a pair of departmental stores in the fashionable, post-second world war Gaya Street thoroughfare in Kota Kinabalu,” he continues.
Datuk Lau reveals that it was his grandfather who thought him to appreciate the values of honesty, ensuring that whatever it is that one’s doing is ethically correct, and at the same time, always maintaining exemplary levels of etiquette in the way one carries one’s self with others. “All these lessons were important as, after all, a big part of our business is about dealing with other parties, thus having such key concerns drummed into you does help a great deal.
“When it was my own father’s turn – Datuk Lau Kok Sing – to make his mark in the company, he had the unenviable task of leading a retail chain at the height of rising consumer prices, emerging from the Global Oil Crisis and the crash of the US stock market in the mid-1970s.”
From his dad, Datuk Lau learned about how to be a meticulous planner and manager – certainly a very important trait to have when leading a business! “He is the one who taught me that, in order to be exceptional at whatever it is that my sibling and I were doing, we had to be completely hands-on and not rely on second-hand knowledge. Because of the challenges he faced, my father decided to shift the family’s business concerns to focus on the distribution of branded consumer goods, instead of sticking to retail. As a result, he takes the credit for incorporated Kim Teck Cheong in 1975,” he reveals.
“This desire to remain resilient in the quest for business success is something that is proudly reflected within the family’s company name: Kim (prosperity), Teck (moral principles) and Cheong (expansion),” points out Datuk Lau proudly. “I am, after all, from a very competitive family, with a lot of expectations, especially with two older generations in the family business, so you are always expected to do even better!”
Datuk Lau remembers that 20 years ago, when he first began his own journey with the company at the turn of the current millennium, people were already talking about how effective empowerment and delegation that relied on good talent leading the way can be for businesses. “And as our business grew and grew, good talent gets progressively harder to find, while the business growth doesn’t stop and wait for everything else to catch up,” he says.
“So, with digitisation, automation and new process- driven templates that have been developed, our businesses can do more, while being consistent when producing results and also reducing risk. At the same time, we can keep track of all business processes in the most effective and data-driven way.”
Then, 2015 saw this digital revolution unfold at KTC when the company moved its day-to-day processes to a cloud solution that would provide the flexibility the company needed to support its ongoing growth, offering a reliable and secure infrastructure to host mission critical business applications.
“These days, it’s just a case of almost mundane repetition of processes for us, instead of going through constant, exciting discovery while taking somewhat risky steps that coloured the days of my own grandfather and dad. But I really can’t complain when it’s been just a ‘boring’ repetition of good results, right?”
With that, Datuk Lau reveals that he now has a dream. One day, he hopes that the whole group of companies under KTC can effectively operate with maybe a 50% reduction of its more than 1,000-strong current workforce. “With the help of digitisation and automation. I am not sure if I can pinpoint which processes can or cannot be automated right now, but in my mindset, anything that can be automated is in the process of transition right now within our businesses,” he confidently reports.
“These days, we work with global brand like Procter & Gamble, Loreal, Danone and Nestle, and what we do is that we represent these brands in East Malaysia. What this actually means is that we effectively ensure that the brands’ goods must be easily available to consumers on the shelves of popular retail outlets by employing a good and effective distribution strategy.”
All this shows that Datuk Lau is certainly a believer in technology impacting everything that his company will do in business, moving forward. “So, a brand that doesn’t invest in technology is doomed. That’s why we are using technology to actively impact our cash flow positively, as our latest business results have shown.”
Datuk Lau is also quick to point out that now, KTC’s core business is not about just selling consumer goods anymore – it’s actually about how fast the company can gets the goods onto retail shelves in the most cost- effective way. “And every transaction and delivery must create profit for us in order to effect things positively in the grand scheme of things. That’s when the effectiveness of our own logistics and supply chain network makes all the difference.”
Datuk Lau reveals that this is because his company has been actively preparing for all future eventualities. “This means finally adding perishables into our delivery equation! In this regard, we are now working to strengthen our delivery fleet to support the current new age of online businesses that can be about anything and everything, and this is all the rage as a direct result of the pandemic.”
So, the decision to future-proof the company has led to the decision to get its own fleet of delivery trucks at the tail end of last year to support the increasing transport and shipping. “Truthfully, I don’t fancy doing what some companies are doing right now, leveraging on less-than-reliable people to do their deliveries to customers and hope to be profitable. That’s why it’s only a sure thing when you rely on your own network and your own people to make any venture a profitable reality.
“There’s also another important added reason for the brand-new fleet of trucks: about two years ago, we acquired the Gardenia bread manufacturing and distribution license for Sabah, Sarawak, Brunei and parts of Indonesia. This will help us to ease into the field of bread manufacturing and distribution.”
Datuk Lau feels that the new requirements generated by this latest addition to the KTC family will also serve to strengthen the brand’s core distribution network further as the delivery of perishable goods is but another science that it’s set to master in the near future. “But in truth, we had already set up a bread manufacturing business about seven years ago – but this didn’t become the success story that we envisioned on account of fierce competition. In fact, our biggest competitor previously were Gardenia brand products, which consumers in Easy Malaysia somehow managed to get their hands on!”
So now, Datuk Lau says that it was just a matter of adapting its earlier facility in Kota Kinabalu to produce Gardenia products, instead. “We started the ball rolling on this project before the pandemic struck. And now, with the licensing agreement signed, we command about 80% of the market share for the bread business in East Malaysia, while also making important inroads with this new bread business into neighbouring Indonesia.”
Datuk Lau remembers that when KTC was first listed on Bursa Malaysia in 2015, he was still feeling the hunger for more growth and wanted to break even further into the surrounding regions. “But I think this would surely have eaten up a lot of the company’s resources at the time. In the end, however, I felt that my perseverance has definitely paid off as the KTC Group achieved a resilient financial performance for the Financial Year Ending June 2022 with revenue growth of 5.5% to MYR705.8 million compared to MYR669.2 million for the Financial Year Ending June 2021.
“In tandem with our revenue growth, coupled with our operational efficiency and cost management initiatives, KTC Group had registered remarkable Profit Before Tax of MYR29.77 million for Financial Year Ending June 2022 as compared to the total of MYR13.72 million reported for 2021, representing a vast improvement of MYR16.05 million or 116.9%!”
As a third-generation family member, shareholder of a booming family business and a father now himself, Datuk Lau looks set to leave behind plenty of substance for his own future remembrance. “Legacy is, after all, a vital part of our history that has to be nurtured, protected and grown. It is a big responsibility for the next in line to take anything forward. After all, the worst thing would be to pass on to the next generation something that is less than what you received.