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Borden Company maps bold expansion plans
BORDEN Company, known for its emerald green Eagle Brand medicated oil, is on the cusp of a new phase. For over 80 years since it started, the group has always been run by family members of the founding partners. From the beginning of this year, however, it has transitioned to professional managers as the group looks to spruce up corporate governance. "In the past, it was the family that made all the decisions," says Tan Lak Tho, a director and a third-generation member of one of the founding families. "Now what we do is that as the management team, we discuss matters and propose ideas and solutions to the board. And as a team together with the board we make the decisions."
This team, in particular, comprises not just the directors - Mr Tan, Rachel Chew (a second-generation member of another founding family) and Richard Yeo (also a second-generation family member) - but also finance manager Shirley Halim and supply chain manager Adam Yeo.
On the cards are plans to structure the group's decision-making process, and also to put in place standard operating procedures (SOPs) where they were previously lacking. For instance, to improve the budgeting process with more detailed planning and sharper accuracy for the next year, the group will review financials, sales, and past performance for all the different areas.
The transition to a different type of management came after the founding families decided that it would be better to separate the management of the group from ownership, according to Mr Tan. "All the partners agreed that we should have zero remuneration," he says.
The history of Borden Company runs deep, and can in fact be traced all the way to Germany. In 1935, German chemist Wilhelm Hauffmann & Company created a formula for medicated oil with a distinctive green colour from chlorophyll ingredients.
This formula found its way to Singapore, where Tan Jim Lay, a direct descendant of well-known Chinese businessman and philanthropist Tan Quee Lan, bought it through a trading house he owned. A few decades later, in 1960, he invited a few business associates to join him as shareholders in order to strengthen the firm's capital base and strengthen its management. Borden Company, incorporated to take over the trading house, was therefore born.
That same decade, Eagle Brand oil was brought to Vietnam. There, it gained overwhelming popularity, and was seen as a cure-all household remedy and a must-have in every household.
As the Vietnam War broke out and the Vietnamese fled to the US, Europe and Australasia, the oil, in its signature triangular bottle, was taken to these faraway lands as well. In time, the group saw rising demand from other countries, mostly in places where there are Vietnamese communities.
In the last 10 years, Borden has produced over 100 million bottles of Eagle Brand oil which were sold to more than 20 countries. North America and Asia each make up about half of the group's revenue.
The numerous awards that Borden has racked up so far are also testament to its success. Besides winning the Enterprise 50 award for six straight years, as well as the SME 500/1000 award for seven years, the group clinched the Singapore Prestige Brand Award in 2006. But the group is not planning to rest on its laurels. Immediately after the internal restructuring is complete, it will look to expand to even more countries. Its goal: to be known as a household name everywhere in the world.
In particular, it hopes to enter new markets in developing and third-world countries where medical help is not easily available and pain relief products such as Eagle Brand medicated oil can help to soothe some of the problems.
In existing markets, the group is careful to adopt a differentiated approach to each one given the varied stages of development. For instance, in Vietnam and Malaysia, medicated oil will still remain the emphasis of the group's marketing efforts. In Singapore, however, the group may focus more on its newer lifestyle and aromatherapy products.
Borden, which has relied on distributors in its overseas markets so far, may also look to set up offices in key markets to work more closely with its business partners, says Mr Tan.
Another key target for the group in the near future is to set up an innovation centre, which will help to create new products in line with the group's vision of catering to every member of the household.
This is especially important given the challenges that Borden faces in reaching the younger population. To do so, it has developed products such as muscle rubs to target those with sporting lifestyles. It has also diversified into aromatherapy-based products such as aromatherapy roll-on bottles to appeal to other population segments.
Indeed, Borden's range of products has increased through the years to include eucalyptus oils, disinfectant sprays, medical balms, muscle rubs, plasters and various other analgesic products. "We would like to be relevant for all different segments of the target population, be it babies, people who are sporty and even CEOs in boardrooms," says Mr Tan, adding that this will help to set Borden apart from its competitors in the medicated oil space.
To counter the widespread imitation of its Eagle Brand medicated oil, the group has improved its packaging several times in the past few decades, even including 3-D holographic security features. Borden has also used private investigators to track down manufacturers of counterfeit products and taken them to court. "The court ruled in our favour and awarded Borden damages of US$1 million," says Mr Tan.
With competition becoming more aggressive over the years, the firm believes that having a new management team in place will help to bring about continued development of the business and growth in market share. "Business partners have to understand the change in our approach and align with the new strategy," Mr Tan adds.
Looking ahead, the group also hopes to further improve productivity through the use of new machinery and technology to keep ahead of the group's orders. This follows a new manufacturing assembly line that the group installed in 2014, which helped to boost productivity by 30 per cent.
"Some of our markets are quite far away and there's a bit of shipment timing involved," says Mr Tan. "We hope to fulfil our orders even earlier rather than being just on time."
Pausing to reflect on the group's achievements to date, he adds: "In all respects the family has done extremely well for themselves running this business since its incorporation in 1960. It's been a very successful business up till today. Our expectation is that with the professional team taking over, hopefully it means the eagle will soar even higher."