Qian Hu's incoming CEO buoyant about aquaculture in expansion plans

Singapore

YAP Kok Cheng will only take over from his uncle in two months. But the incoming chief executive of ornamental fish service provider Qian Hu Corporation already has an ambitious target in mind: to bring the company's revenue across the S$100 million mark.

Mr Yap's uncle, Kenny Yap, had once vowed to do the same. But the company is still struggling.

It posted a 10.2 per cent drop in 2019 revenue to S$76.9 million.

Net profit did increase 128.9 per cent. But for the first half of this year, Qian Hu reported a net loss of S$525,000.

Mr Kenny Yap attributed the losses to unprecedented supply chain disruptions related to Covid-19.

"This is the first time that we experienced supply chain disruption," he said. "It's a happy problem that the orders and demand are still there, it's just that we have to find a way to supply them."

Now that airlines have been converting commercial flights into cargo flights, Mr Kenny Yap said the company has been increasingly able to fulfil its orders.

Based on his past experience, Mr Kenny Yap is confident that business will remain resilient.

"I do not believe that anybody who's lost their job, the very first thing they go back home is to kill their fish, dogs and cats, no. Sometimes they stay home more, they actually spend more because of that," he said.

He said he has seen the sale of pets, including fish, go up by at least 10 per cent during past crises, including the Asian Financial Crisis in 1997, the severe acute respiratory syndrome (SARS) period in 2003, and the 2009 Global Financial Crisis.

Meanwhile, he added, some of his competitors have also shut down during this period and Qian Hu is able to take market share.

Mr Kenny Yap said the company is also taking advantage of any downtime to accelerate its digitalisation efforts, which include the use of cloud computing and automation.

This transformation will help the company become more efficient and productive, he said.

Surviving a crisis also has a psychological effect, he added. "You'll have a certain sense that you're not that vulnerable, and you'll have a certain level of confidence. We always want to make use of this kind of crisis to boost this kind of confidence, to actually quicken the pace of transformation."

Growing the pie for edible fish

To cross that S$100 million mark, Qian Hu is counting on growing its aquaculture business so that it is larger than its existing business of selling ornamental fish and accessories.

Qian Hu's foray into edible fish farming began in 2017 with a joint venture in China's Hainan province, a project Mr Yap Kok Cheng personally oversaw. This first involved growing groupers using Chinese herbal medication, instead of antibiotics, before expanding into growing fries and shrimps.

"China is a big market for food, producing 80 per cent of the world's aquaculture, and the Chinese eat a lot of fish as well," said Mr Yap Kok Cheng, who is currently general manager for the group's China operations.

In 2019, the company established a hatchery in Singapore to cultivate freshwater shrimps.

"We are actually working with a lot of farmers in Singapore," Mr Yap Kok Cheng said. "We're supplying them with fries because that's the basic thing that they need to have - they need to have healthy fries that are strong." This plays to Qian Hu's strengths in transporting live fish, he added.

Leader in the making

Mr Yap Kok Cheng was posted to Beijing in 2005 shortly after he joined the group as a management trainee, along with several other cousins.

In order to challenge his nephew, Mr Kenny Yap decided to send him to China where he would be separated from "first generation" management. He had to make his own decisions and get buy-in from staff or business associates. "That kind of training is invaluable," Mr Kenny Yap said.

The search for a new CEO for Qian Hu had begun 15 years ago.

"I realised that some family-run businesses, they cannot detach their identity from the job and the power that they hold," said Mr Kenny Yap. "They're afraid that once they do not have the power and the status as CEO or chairman, they'd lose themselves. So this is why they hesitate and procrastinate."

Mr Kenny Yap will, from next year, focus on mentoring the new CEO, and on strengthening diversity within Qian Hu's board. He will also work on improving the company's environmental, social and corporate governance.

Asked how he will differ from his outspoken uncle's leadership style, Mr Yap Kok Cheng said: "I think I am more operational, more on understanding internally, and of course I have a vision on what to do. Maybe I will speak less but, of course, I will do more on what is necessary."

Chiming in, Mr Kenny Yap said he is glad his nephew has a different personality.

"I hope that people can say, 'Oh, Kok Cheng is so much smarter than Kenny'. This is, I think, the best legacy that you can actually leave for the company."