Conflict pushed him to Singapore

IT was conflict, not opportunity, that brought Malaysian businessman Jacky Tan to Singapore in 1998.

Concerned about the outbreak of violence from the May 1998 racial riots in Indonesia - he helped to manage a quarry in Indonesia for his father-in-law - Mr Tan brought his wife and their two sons (they have three now) to Singapore to "lay low and assess the situation" until the rioters dispersed.

But restlessness, along with a timely offer by a close friend, led to the establishment of United Global - a Singapore-based, Catalist-listed lubricant manufacturer. And the firm - which he then built up through hard work - has tied the 51-year-old and his family to the Republic ever since.

Today, United Global - which counts United Oil as a wholly owned subsidiary - owns a lubricant blending plant in Tuas with an annual production capacity of approximately 44,000 tonnes. It also trades base oils, additives and lubricants.

The firm posted a profit of US$6.2 million on revenue of US$99.9 million last year. It launched its initial public offering on the Singapore Exchange on June 28, and made its trading debut on July 8.

"The objective of our listing was really to enhance our public image to grow and expand our business," Mr Tan, the firm's director and chief executive, tells The Business Times.

But during the listing process last year, he realised that United Global's risk management framework, policies and processes would not pass muster for a publicly listed firm.

Recalling an advertisement he saw in a local newspaper about a grant (the Capability Development Grant) by enterprise development agency Spring Singapore, Mr Tan decided to approach the agency to plug the gaps in United Global's business model and improve on its financial management capabilities.

The firm was steered towards a risk management consultant who, after a thorough study of the firm's business processes, recommended more than 30 ways for United Global to improve on its credit control, cash flow system and to shore up on its HR policies.

Says Mr Tan: "As a family business, you tend to do things one way. Sometimes you forget that there are better ways to do things, and those are the improvements we learned from the consultant."

One recommendation from the consultant, for instance, was for the firm to have a proper system for evaluating the performance of its 66 employees.

"In the past, it used to be that, this guy looks hardworking, let's give him a 10 per cent increment. We didn't have a system to classify such things," says Mr Tan.

"Right now, we have a system to rank our employees ... the process is more transparent, and everyone knows what is our next target ... it's a great idea."

Yet, despite the firm's successes, its story was one that was written partly by chance.

Having stayed in Singapore for about six months as the riots in Indonesia continued to ravage the country, Mr Tan found himself struck with a serious case of boredom.

Coincidentally, that was when a friend pitched to him the idea of taking over a lubricant factory in Tuas whose owner was struggling. Together with his wife, Ety Wiranto, Mr Tan decided to purchase the factory and its operations, thus establishing United Oil in 1999.

To finance the mortgage of the factory - some S$1.9 million - the couple provided two houses (valued at about S$6 million in total) in Singapore to the bank as collateral.

The houses were owned by his father-in-law - an Indonesian businessman known as Wiranto, who has "many businesses".

After he took over the factory, Mr Tan then threw himself into the business.

"There are a lot of things he doesn't know at the start, but then he will learn and put in a lot of hard work," Ms Wiranto, an executive director at United Global who managed the finances in the early stages of the business, tells BT.

"We had no idea what lubricants were about, but he came in, and through hard work, he learned about the business and here we are today," she adds.

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