First published in The Straits Times on 12 March 2020.
The next time you visit a local supermarket, have a quick scan of the shelves. Many household names, such as SIS Sugar, Magnum and Woh Hup, that find their way from these shelves to your pantries, are up there because of food and beverage (F&B) distributor Lim Siang Huat (LSH).
Founded by Mr Lim Mui Er in 1940, the business started life as a small grocery store in Changi selling goods to the British Forces and expatriate community.
Its name — a combination of the Lims’ surname and the Chinese words for “sound” and “fortune”, to mean that the Lim name would bring fortune to people — has been an extension of its success through the years.
Today, the company is run by the third generation of the Lim family and distributes more than 5,000 products, including six house brands, to a broad range of retailers and businesses in the region. These include restaurants and hotels. Marina Bay Sands, FairPrice, Cold Storage and Star Cruises are among its main customers.
Regional expansion has been crucial to LSH’s growth. In the early 90s, it set up an office in Malaysia, followed by offices in Indonesia, the Philippines, Cambodia, Laos and Vietnam between 1995 and 2018, and struck up distribution partnerships with companies in those countries to increase sales and reach new clients.
The company’s expansion helped it to achieve double-digit growth in annual revenue and cemented its position as a key distributor of food and beverages in Asia. Chief executive officer Jack Lim said: “We are the third generation of our family to lead the company. Many family businesses do not last beyond this generation; we want to buck the trend and bring the business to greater heights.”
Adapting to new markets
After Mr Jack Lim, 50, and his two siblings, Mr Peter Lim and Ms Annie Lim, took the reins of LSH in 1991, the company quickly became one of Singapore’s largest F&B suppliers within a few years. “We knew we had to look beyond our shores because the market here is small and there wasn’t much more room left to grow,” he said.
At the time, the company was exporting goods to a few companies in Malaysia and Cambodia. It decided to grow its presence by opening new offices and partnering firms in the region, and hired locals who knew the market and culture in these countries.
By developing unique talent pools locally and overseas, LSH was able to expand its business; it built better relationships with existing customers and reached new clients.
“The locals spoke the language and had a better understanding of the different taste preferences in each part of the country. We needed that knowledge to maximise our odds of success,” Mr Lim explained.
These strategies secured the business major victories. Its Indonesia office now handles distribution for Yeo’s and Red Bull, among other popular drinks brands, in Jakarta, Surabaya, Bali and Batam, while the Cambodia office has snagged regional dairy brand Cowhead as a major client.
Business development director Peter Lim, 51, said the company plans to strengthen its regional presence by expanding its offerings.
For example, it will start producing carbonated soft drinks for the Sunkist brand in Indonesia and offer more logistics services to firms in Cambodia from this year onwards to attract new customers and expand existing business relationships.
“Such diversification will give us more stable and sustainable revenues in the long term,” he said.
A family business built to last
LSH may have built a reputation as one of Asia’s leading F&B distributors, but it is not done growing yet. Last year, the firm joined Enterprise Singapore’s (ESG) Scale-up SG programme to seek new growth opportunities.
The 2.5-year programme, launched last July, aims to help high-growth local firms scale quickly through peer learning sessions and collaborations, coaching, and guidance from management consultancies such as McKinsey & Co and PwC Singapore.
With the support of PwC, the Lim siblings have begun charting a more detailed overseas growth plan for the next three years.
“One of the biggest challenges for small and medium enterprises like ours is retaining talent,” added Mr Peter Lim. “With the guidance of consultants under Scale-up SG, we learnt how to draw up attractive career plans for our employees to encourage them to stay.”
LSH has also introduced internship programmes to attract and train potential hires, especially for its overseas offices. For instance, it has sent seven international business studies and information communications technology students from Ngee Ann Polytechnic to its Laos office for two- to three-month internships as part of a partnership with the school.
To further hone Singaporean talent for regional roles, the company plans to offer overseas internships to local students annually for the next four years.
“By offering these internships, students can get regional exposure and understand our business and sector better. Some of them may join our firm after they complete their studies, so everyone benefits,” said Mr Lim.
“We’re also glad that we can help to give such opportunities to Singaporean students as a Singaporean company.”
Higher productivity, more growth
Ms Annie Lim, 48, general manager at Lim Siang Huat, shares about the struggles and triumphs of growing the family business.
As the company grew, what processes needed to be automated for higher efficiency?
Ms Lim: The bigger we grew, the more product lines we had. Managing inventory became a very big challenge. To track, store and retrieve goods in our warehouses more easily, we developed and installed an automated system that uses robots at different heights. This is not about replacing people, but using the same number of people to do more work as we grow.
The firm also implemented a new fleet management system that automatically plans the most efficient routes for our delivery trucks. Previously, staff had to print orders at the end of each day, spread them out and manually plot routes over many hours.
The new system saves us so much time, gives us more flexibility to add orders as they come in, and maximises the use of our fleet.
How have partnerships played a role in helping the business grow?
Ms Lim: In 2019, Enterprise Singapore introduced us to a fellow food distributor Country Foods. We serve many of the same customers, so it makes sense for us to work together on deliveries.
Now, we help Country Foods to deliver products in areas where we have more drop-off points and vice versa. This maximises the use of our fleets because we don’t have partially empty trucks and we don’t have to send trucks to many different areas. It gives us excess capacity to grow our business without adding more vehicles.
Why create an online presence for the business?
Ms Lim: When we started an online store in 2016, we wanted to give our customers a way to place orders so that we did not have to hire more staff to take orders via telephone calls.
We migrated some of our existing customers to the online platform, but also got many new ones who came across our website. These were people who didn’t know that we existed, such as home bakers and chefs, and people buying for events and activities such as fun fairs.
We’ve added more than 3,000 customers because of the e-store. Having an online store can really expand your customer base.