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Staying ahead by adapting to the times

Strategic partnerships and a commitment to innovation help Onn Wah Tech move onwards.
Friday, November 20, 2015 - 05:50
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Mr Leong has come a long way from his home in a "small village in Perak" - his company generated revenue of S$9.3m in 2014.

ONN Wah Tech founder and managing director Leong Kwong never got to finish his polytechnic programme, but that didn't matter as some of the most important lessons he has learned about his business came from outside the classroom.

Success for Mr Leong has come from two fronts. The first is a dedication to improving skills and capabilities to keep up with the changing times, and the second is a belief that growth can be greatly increased if one finds the right partners.

Semiconductor testing and assembly equipment maker Onn Wah Tech, which was one of the Enterprise 50 award winners this year, generated revenue of S$9.3 million in 2014. That was a sum Mr Leong, 43, could hardly have fathomed 24 years ago when he first came to Singapore to find work.

The young Mr Leong had just finished his 'O' Level equivalent in Malaysia and saw an ad for a job in Singapore. He left his "small village in Perak" and came to Singapore, where he lived at a company hostel in Woodlands.

"They sent me the letter, I straightaway packed my bag and came to Singapore," recalls Mr Leong.

After a few months, he switched to a job in the semiconductor industry, where the work was more interesting and, because the industry was booming, the money was better.

"It was good money then," he quips. "In 1991, 1992, I could work overtime (OT) non-stop. Back then, I could work 12-hour shifts, night shifts; I only rested for two to three days a month . . . Just imagine, the salary was about S$600 plus allowance, the most was S$800. From OT you can bring home S$1,700, so the OT was more than everything added together."

Mr Leong also learned very quickly which path to take if he wanted to advance his career. "I looked at myself and thought, in a factory, if you want to get to the next level, you need to always study," he says. "You have to get your 'paper' no matter what, or you can never climb the ladder. I actually took some courses. I got my industrial technician certificate, then I did my polytechnic studies while I was working."

It soon dawned on him, however, that the well-trodden path may not be the most suitable for him.

Having worked closely on the development of certain products and processes, Mr Leong found that he had already acquired a wealth of knowledge about the equipment he was working on and for which his employer was ordering parts. That was knowledge that he realised would be valuable.

"If I want to excel in a multinational corporation, it's rather hard, or I have to take a longer time," Mr Leong says. "But if I know very well all of (the things I already know) - I work hard with this design, and I know about this process - I believe that I can achieve more if I were to work on my own than in a factory."

Mr Leong left his job in 2004 and quit his polytechnic programme in his final year to start his own business, making the parts that he had bought while at his former job.

When a semiconductor manufacturer makes a new product such as a new circuit board, it needs to reconfigure its machines to handle the new design. Rather than change the machinery entirely, it is often more economical to simply change the tool set that is directly affected by the new design. Onn Wah makes those tool sets.

Having been on the buyer's side of the equation, Mr Leong had an intimate understanding of what customers wanted, which he turned into an advantage once he became the seller. What Onn Wah Tech did in its early days, and continues to do today, is not simply manufacture the tooling sets that its customers need, but also to design them from scratch.

Being able to design a tooling set requires the company to have a good understanding of the machines on which its tooling sets will be used. And that knowledge about the machines is only possible if Onn Wah Tech maintains a close relationship with its customers.

"How we keep up is we need to work with the customer and see the latest trends and prepare for them," Mr Leong says. "We're not the machine builders, we just sell the toolings. But we know the latest machine types that are coming up. Are there any differences in process for producing these parts? If there are, we have to get ready for that . . . We always keep up with the latest technology."

Employees are also constantly upgrading themselves. Mr Leong believes that his days of formal education are over, but that does not stop him from encouraging his staff to further their studies.

"It's good for them and good for the company," he says. "This is part of the journey of their working life . . . And when opportunity comes, you need to be ready for it. You could get to know some classmates, and if they're good, you can ask them to come and work for us. Besides that, they can meet more people from different fields - who knows, one day they can bring business to us."

Besides keeping up on technology, Mr Leong has been keeping Onn Wah Tech abreast of industry trends. That Onn Wah Tech remains in business even as the semiconductor and electronics industries have been shifting most of their manufacturing operations out of Singapore is a testament to the company's ability to adapt to the times.

Mr Leong says that about 80 per cent of the company's sales originated in Singapore when he started in 2004. Today, Singapore accounts for about 10 per cent of revenue.

"We have to regionalise our sales and marketing teams, so we employ people for on-site service in those countries . . . If I just rely on Singapore customers, it's likely I'm not in the market any more because they're no longer here," Mr Leong says.

It has helped, perhaps even been essential, that Onn Wah Tech has been able to find established partners to help it accelerate its growth when it needed to.

Two years after starting his company, Mr Leong in 2006 set up a joint venture in Taiwan with a customer so that he could pursue business in Taiwan and China. Two years after that, in 2008, the global economic crisis collapsed margins and led Mr Leong to seek a partnership with Onn Wah Precision Engineering, his competitor at that time.

Onn Wah Precision was already an established player in the market and had the capacity Mr Leong needed, while Mr Leong brought design capabilities to the table for Onn Wah Precision, which was mostly manufacturing tooling sets for the machine suppliers. It was a case of competitors joining forces, and Onn Wah Tech was born.

"That should be the way," Mr Leong says. "Keep on competing when the market is so small - you buy the machine and you employ 10 people and I buy my machine and I employ 10 people, or we together buy the machine and employ 10 people. Which is better?"

But Mr Leong acknowledges that not all mergers and acquisitions work out. His experience has been positive so far partly because he and his partners share the same vision for the business. There is also a commitment to stay true to a path that all parties agreed to when the partnerships were cemented, or at least to have consensus when the plan needs to change.

What is the ultimate plan? For now, Onn Wah Tech is focused on growing its presence in Taiwan and China with a new manufacturing plant that was set up in 2014. The company is also looking for customers in new industry segments such as the biomedical industry and semiconductor wafer fabrication houses.

"If we have the right model, even though the market is down, once the market starts to pick up, we are ready," says Mr Leong.