If one were to judge success by material possessions and awards garnered, then the latest Ferrari model parked in the front porch of Wee Tiong Building and the eight Enterprise 50 trophies adoring the office would indicate that Wee Tiong (S) Pte Ltd has made it. Celebrating its 20th anniversary this year, Wee Tiong has come a long way from its humble beginnings as a local importer and wholesaler.
Incorporated in 1993, Wee Tiong has been in the physical trading industry for the last 20 years, mainly dealing with sugar and rice products. In recent years, the company expanded its range of commodities to include salt, cooking oil and groundnuts. It is a member of the Refined Sugar Association in London and part of International Enterprise Singapore's Global Traders Programme.
Sugar trading still remains the top revenue generator for Wee Tiong and contributes 80 per cent of the firm's total revenue, while rice accounts for 18 per cent. The other commodities make up the remainder. The firm's annual turnover has been robust and strong commodities prices in 2011 helped Wee Tiong record a handsome $320 million in turnover.
Wee Tiong's success was the result of the vision of its founder, Tan Siong Kern, which is shared by his two sons, Tan Wee Tiong (company named after him) and Tan Wee Beng. The elder Mr Tan Siong Kern quickly realised that the then-tightly controlled commodities market in Singapore was insufficient to meet his ambitions.
Trading was expanded to regional countries, with Indonesia and Malaysia quickly accounting for 90 per cent of revenue (before 2002). Having forged a trustworthy reputation in the region and established an extensive network of suppliers and customers, Mr Tan Siong Kern handled over the daily running of the business to Wee Tiong and Wee Beng who oversee the Finance and Trading departments, respectively. Mr Tan Wee Beng joined the company fresh out of university. At that time, he soon recognised the critical importance of information and the opportunities and threats the Internet present to the company. "We must always change and evolve to keep up with the times or else we will become just like an old car model: good memories but no longer useful."
He therefore took the first step to bring Wee Tiong into the digital age by setting up the company with the latest computers and trading platforms.
Sensing the potential benefits that financial products could offer to Wee Tiong's trading business, Wee Beng took night classes to learn more about financial instruments and the strategies to use them. This led to the second step of setting up a trading unit with highly trained traders to monitor the global commodities market.
Wee Tiong traders are regularly sent for training at various financial houses. These sessions also help to keep them updated on the latest trading platforms and strategies.
The third step to ensure continued success in the digital era was to combine the usage of complex financial derivatives with the company's expertise in reading market trends gained through its many years of experience in the commodities industry. Heading the trading department, Wee Beng provides advice and insights to suppliers and customers regarding the market outlook. Such advice helps customers to decide on when is the best possible time to purchase or to hold off till prices fall.
Besides providing market advice, having an in-house trading unit also allows Wee Tiong to provide hedging options to customers who might not have access to them. In addition, Wee Beng also uses futures contracts to take calculated positions in the commodities market whenever there are favourable opportunities. Speculative investments have been profitable so far, but Wee Beng understands the risks and thus uses speculative futures sparingly.
Recognising that Wee Tiong cannot thrive in the long run solely by providing value-added trading services, Wee Beng has always envisioned the company expanding downstream. Several years ago, plans to open a sugar refinery in a joint venture in Indonesia were conceived. However, they were put on hold due to the global financial crisis of 2009. With the global economy recovering, the sugar refinery plans have resumed, and the refinery is expected to be operational next year.
The refinery will help to diversify Wee Tiong's revenue and ensure a steady supply of sugar as well. More importantly, the refinery ensures that Wee Tiong will remain relevant in the commodities industry and not be cast off as a redundant middle man.
As the company looks to mark a new chapter in its history with the opening of the sugar refinery, the importance of its management team becomes more apparent. The challenge of business continuity has always plagued small companies and Wee Tiong is no exception.
Sheepishly acknowledging the importance of his presence in the company and the lack of a ready replacement, Wee Beng has been on the lookout for capable employees to groom so as to ensure business continuity.