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Enterprise, Issues  |  JANUARY 5, 2016 12:00AM

How things started

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Growing big by moving Bigger - Xin Hwa - issue inside story bannerIn this article, KINIBIZ speaks to Xin Hwa co-founder Ng Aik Chuan about the journey that led to the establishment of Xin Hwa, and the challenges faced during the first years.

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When KINIBIZ spoke to Ng Aik Chuan about how Xin Hwa Holdings was founded, the managing director of the group told KINIBIZ that the entire basis of Xin Hwa actually came from his grandfather.

“It started as a small-scale land transport operation by my grandfather, back in the ’60s when commodities like rubber and pineapples needed to be transported,” said Ng, adding that his grandfather had started out with a small fleet of five lorries back then.

However, Ng related that his grandfather’s company, then known as Sinwah Trading and Transport Agency, faced the same issue as a lot of other small transporters at the time whereby the majority of their work was as subcontractors. They would be taken on to aid the main contractors that actually had contracts to transport goods. This, according to Ng, severely limited how a small transporter could grow.

Ng related that his interest and experience in the transport and logistics field began with his father Ng Peng Lam, who had worked in Sinwah with Ng’s grandfather.

Ng Aik Chuan

Ng Aik Chuan

“This was when Sinwah was still a subcontractor, and I was still in school. During school holidays, I would follow my father out to meet clients, as well as go on deliveries with him. We went around Johor Bahru, Batu Pahat, and Singapore, among other places. My brothers and I went along to learn about the logistics business,” reminisced Ng.

Ng told KINIBIZ that it was thinking back about those times that had made it clear to the Ng brothers that being a subcontractor forever was just not going to cut it.

“I remember my grandmother talking about how it was for lorry drivers. Having to get up at 5am or 6am. She had said that ‘you had to get up at 5am whether you had five lorries or 10, it was just the same thing happening’,” Ng told KINIBIZ.

The next step

Ng also related to KINIBIZ how he studied until he had finished his STPM and took an opening at Tiong Nam Logistics Holdings Bhd.

“That was where I learned more about the transport and logistics sector, and learned how to do things like customs clearing, how to declare goods as well as the procedures to do so, and I also worked as a storekeeper in a warehouse, where I learned about how to manage an inventory, all up to how forwarding works. It was also where I learned how to source clients,” said Ng, adding that he was with Tiong Nam for six years.

After his stint at Tiong Nam, he came back to Sinwah, where the Ng brothers revamped the company as Xin Hwa Transport and Trading Sdn Bhd, and took over the business from their father.

The Ng brothers were determined to grow the company and avoid the obstacles that have stumbled small transporters, namely being stuck as a subcontractor, as well as the issue of financing the growth of the company’s fleet of transports.

To that end, the brothers brought with them their experiences while working at other transport firms, and brought that experience and expertise with them to Xin Hwa. Ng also admitted to being a bit of a workaholic at this point, noting that few things made him happier than being able to find a solution to a problem.

Eureka!

Inside story image Xin Hwa Trading & Transport Sdn. Bhd 031115 03At the point when the brothers took over, Xin Hwa were facing the same problems as many other transporters, namely, being the direct recipient of a contract, and having enough transports to fulfil that contract.

Having learned how to source for clients without the middleman during his time at Tiong Nam, Ng figured that the problem now stood at being able to fulfil the contract, which he described as a cycle.

In a “chicken or egg” dilemma, a small transport company needs the contract from a client to be able to finance a purchase of a lorry to expand the fleet with, but in turn, without being able to meet the demands of the client from not having enough lorries, the company would find it hard to finance the newly bought lorry.

Of course, the obvious way out of this was to look towards bank borrowings. However, Ng and his brother eschewed this method, with Ng explaining that this was a way that transporters get trapped in debt.

As such, the Ng brothers took it upon themselves to solve this issue without taking the conventional means of going to a bank. This led them towards what the managing director believes is one of the reasons Xin Hwa has managed to make it where it is today.

It came to be a multi-part answer to the problem, which would help to increase the efficiency of the group’s fleet at the same time. The Ng brothers looked towards secondhand lorries, with the mindset that it can still move, and can still benefit the company at a lower cost.

However, another problem came in the form of having to fix up the lorries, as some of them were in need of repairs when they were acquired by the group. Another issue was the availability of trailers for the lorries that they had.

Inside story image Xin Hwa Trading & Transport Sdn. Bhd 031115 06As such, the brothers decided to make their own trailers, rather than face the long wait and expense of purchasing a trailer which would incur a further financial burden on the group. This led to the brothers starting the group’s own workshop and manufacturing yard for their fleet of vehicles.

The workshop and manufacturing yard would come to be another core business for the group, as the group became more proficient in crafting their own trailers, as well as in fixing up their own lorries.

Ng noted that the group having its own workshop and manufacturing yard is part of what allows the fleet to be deployed more efficiently, as downtime on the part of the lorries is minimised. Rather than having the lorries join a queue at another workshop and having to send them to the authorities for inspections, which both take a large amount of time, Xin Hwa instead has its own workshop patching up its lorries, and invites the authorities to conduct vehicle inspections there as well.

“This is something we are proud of. We are self-sufficient in this case,” said Ng, noting that the turnaround time for a lorry that has broken down was reduced significantly, allowing for greater efficiency of that lorry.

Next KINIBIZ learns about what it takes to be able to move unconventionally large cargo, as well as the part the fabrication plant plays in the moving of supersized cargo.

Tomorrow: The minutiae of moving the big picture



 
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