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Constant innovation with a dose of optimism
THE economy may be in a bit of a slump, with prospects for many businesses looking slightly depressed. But these are the times when entrepreneurs should be looking for a silver lining as opportunities turn up in the most unlikely of circumstances.
Just ask Koh Hock Seng, the managing director of diversified property firm Exceltec. He has been through some pretty rough times himself. His company was set up as a subsidiary of IMM back in 1991 to handle the facilities management and engineering maintenance of the mall at Jurong.
But just six years after it was formed, IMM major shareholder Yaohan ran into financial difficulties, resulting in Exceltec becoming an independent entity. Not one to give up, Mr Koh guided his company from being a small unit of a larger firm to becoming a property services firm doing a full range of facilities management-related businesses.
These include property asset management, environment and cleaning services, and facilities management today. "During down times, focus on the opportunities instead of lamenting on the bad economic climate," said Mr Koh. "There are many opportunities to be seized during these precarious moments." Indeed, the company has grown from strength to strength, especially in the past six years. The company's revenue has more than doubled from S$12.2 million in 2009 to S$29.6 million last year. Its staff strength has also doubled to 335 since five years ago. Exceltec was also ranked in Singapore's top 1,000 small and medium enterprises this year.
The company's journey has been one of steady expansion and diversification in new businesses over the years. It started out as a property asset manager, with a strong focus on integrated facilities management and engineering services.
This meant that it was in charge of maintaining the properties through services such as cleaning, plumbing, air-conditioning servicing, environmental and mechanical and building engineering services.
Soon after Exceltec left IMM, the company expanded into environment and cleaning services, and currently provides janitorial services to major clients including government organisations and government linked companies. This unit also deals with ventilation ducts such as air-conditioning ducts, carpark ventilation ducts and kitchen exhaust ducts.
It then had to endure the difficult Sars period in 2002 but survived the crisis due to its strong core businesses in property asset management and facilities management.
The company then moved to set up environmental engineering services or E3 services in 2003.
In 2008, the financial crisis in hit the economy hard but the company did not lose faith. Exceltec instead went ahead to create new businesses, this time in green solutions for buildings.
Even now the company is not standing still: It is making preparations for providing engineering and technical services for the healthcare sector, having identified health to be a major growth sector.
"The company has been constantly innovating since its inception. From being just a facilities maintenance service provider we have expanded into property asset management and later on into providing environmental engineering solutions," said Mr Koh.
A key driver of this innovation has been, for the company, technology. Recognising that it has to employ the latest technology to streamline its operations and become more efficient, Exceltec has constantly looked to bring in new tech and methods.
For instance, it has brought in interactive and touch screen notice boards for the condos and industrial parks it manages.
"The use of technology has become integral in our industry. Companies which do not adapt and welcome it will be left behind," said Mr Koh.
The industry is not without its challenges however. For one, property as a whole has been in a slump, leading to a tightening of maintenance budgets and less demand for higher value maintenance services.
At the same time, the landscape is getting increasingly crowded and competitive, with more players moving into their space.
And like other companies in the services sector, manpower shortage is a major obstacle for Exceltec. In particular, retention is a big problem. Some individuals who study property management decide not to take up jobs in the sector. But technology helps to overcome some of these issues, alongside proper training of staff, said Mr Koh.
Its workers are trained to handle multiple types of buildings. This means that there will be adequate cover across the industries Exceltec handles, helping to raise productivity.
Despite the formidable challenges Exceltec faces, Mr Koh believes the future for his company remains bright, especially in the green tech and mission critical environment. Even in its core business, property asset management, there is steady demand for its services.
"The beauty of this industry is that it is a relatively evergreen business, be it during economic booms or recessions there will always be a need for managing agents to manage the buildings in Singapore," he said,
Exceltec's constant use of technology will also stand it in good stead for the future, said Mr Koh. "We are constantly exploring new technologies to set ourselves apart," he added.
Asked if the company has thought about expanding overseas, Mr Koh said the company has been approached to offer its services overseas.
"While our main base of operations is in Singapore, we recognise that this market is limited and there is growing demand for professional building management and solutions coming from our neighbouring countries. Building services have to keep up with the rapid development of these emerging economies, a gap where our expertise can help fill," said Mr Koh.
IMPORTANCE OF PREPARATION
But he also warned that entrepreneurs looking to expand quickly overseas must be sufficiently prepared. "I would advise aspiring entrepreneurs to always be sufficiently prepared before thinking about expanding overseas," he said.
First, the company has to be financially prepared to sustain the expensive overseas venture and even set aside extra budgets for unforeseen circumstances.
He also advises firms looking to go overseas to form partnerships with foreign firms as they can help facilitate the process of doing business.
"Thirdly, it is of paramount importance to understand the culture and the laws of the country you wish to enter. What may be acceptable here in Singapore could be highly unacceptable over there," he added.