Copyright 2009 Singapore Press Holdings Limited. All Rights Reserved
The Business Times
Overseas markets drive used car dealer's business
USED cars and football may be worlds apart but not to Cher Kwang Siong, managing director of Kheng Keng Auto.
A family business established in 1980, Kheng Keng Auto is a leading used-car dealership in Singapore that exports vehicles around the world.
Kheng Keng is also a local pioneer in using Internet technology to cater to customers in the South American and South African markets. It began operations in these regions in 2004, after noticing that these developing countries are "desperately in need of affordable and reliable automobiles". It has since achieved the remarkable feat of increasing its yearly turnover by eight times from $3 million to $25 million in 2010.
Kheng Keng's presence in Africa has been particularly beneficial to its bottom line. With offices in eight countries in the region, the company has reaped good sales from the economic boom Africa enjoyed in the wake of the 2010 FIFA World Cup.
Despite these overseas successes, Mr Cher remains humble and credits a large part of his company's accomplishments to the help he has received from SPRING and IE Singapore. Though he believes that Kheng Keng would still have been able to expand without their assistance, he says progress would not have been as smooth or on the same scale as it is now.
Thanks to periodic information releases from the Association of Small and Medium Enterprises (ASME) and Singapore Chinese Chamber of Commerce and Industry (SCCCI), Kheng Keng has also learned about the various schemes available for SMEs.
For example, Kheng Keng has been able to match up with several new contacts after participating in business missions organised by IE Singapore overseas.
Mr Cher said these events were extremely beneficial to SMEs who want to explore business opportunities outside Singapore or expand their businesses overseas.
These missions have enabled Kheng Keng to meet various overseas government officials, helping it to learn more about foreign cultures and work better with its clients abroad.
More than just providing networking opportunities, he said that associating with organisations like IE Singapore has benefited the firm.
According to Mr Cher, the implicit endorsement of IE and SPRING Singapore allows Kheng Keng to be seen as "representatives from the Singapore government" by overseas clients. This has boosted the confidence of foreign firms in Singaporean businesses "tremendously" and resulted in more successful partnerships between foreign and local firms.
Kheng Keng has also gained monetarily from these government initiatives.
In 2007, it pursued a plan to insure its short-term financing lines against insolvency risks. The company had gone for a risk coverage of $2 million and would have had to pay 1 per cent of the initial sum as the insurance premium.
However, thanks to a joint Loan Insurance Scheme between IE and SPRING, it was able to receive a 50 per cent subsidy on the payment. This allowed it to channel funds into wider, more ambitious projects such as product development and international branding.
Not all of Kheng Keng's efforts have been focused overseas. Closer to home, it has utilised SPRING Singapore's Productivity and Innovation Credit (PIC) scheme to upgrade the management skills of its senior staff. The PIC scheme helped Kheng Keng to fund a wide range of courses from human resource management to retiree employment.
This has resulted in a more efficient and productive workforce and cut costs through a hefty 400 per cent tax rebate on its training programme from PIC. Kheng Keng has its sights set firmly on foreign expansion.
"I am a dynamic businessman," said Mr Cher. "I always like to explore new business opportunities locally and even more so overseas."
He plans to tap several more government schemes to expand Kheng Keng's presence overseas, especially in the South American region.
With Brazil set to host the next World Cup in 2014 and the 2016 Olympic Games, Kheng Keng hopes to capitalise on the flurry of activity in the region.
Although he has had some success in this area, Mr Cher does not want to rest on his laurels. With increasing globalisation, he believes that companies need to "develop a sustainable competitive advantage" to thrive internationally. Kheng Keng hopes to use IE Singapore's Internationalisation Capability Development Programme - which offers funding support of up to 50 per cent in areas like manpower, hardware and software development - to boost its business capabilities and increase its market share in the global market.
He also has high praise for IE Singapore's efforts to nurture the next generation of businessmen, as shown by the presence of local university interns on IE Singapore's business missions.
"I think it's a fantastic idea to give young fellow Singaporeans overseas exposure even before they start working," said Mr Cher.
"These would be eye-openers and great lessons that they would never learn from books or training materials."