Cleaning products producer to focus more on marketing to grow brand presence
STARBIZ 13 NOV 2017 BY JOY LEE JOYLMY@THESTAR.COM.MY
WHAT didn’t kill Lee Teck Meng certainly made him stronger. The 50-year-old entrepreneur failed two initial attempts at doing business before finding the right fit as a cleaning products producer.
The founder and managing director of Kleenso Resources Sdn Bhd has put in a lot of effort into getting where he is today and is far from taking a backseat.
Lee started his career in the printing industry in 1990. He set up his own printing company with a few partners two years later. Business was good for the first few years but the Asian financial crisis turned his fortunes the other way round.
By 1998, his partners had all left, the company had gone bust and Lee was saddled with RM1.5mil debt.
Consequently, he had to take on several jobs to pay back his debt; he helped manage a company by day, sold beverages at a food court by night, lectured part-time on weekends and did some trading business on the side.
It was, no doubt, a tiring and challenging few years that followed. But Lee is not resentful of having to live through those years. If anything, he is jovial as he recounts his experiences. In one of his classes, Lee met a chemistry student who had a formula for floor cleaning products. Lee helped his student set up a company and eventually partnered him to produce floor cleaning products.
Alas, that venture did not work out as well.
After one and a half years, Lee was back on his own.
Fortunately, he remained optimistic about doing business.
And when some of the distributors for the floor cleaning products encouraged him to stay on in the chemical industry, he looked for another opportunity to start another venture.
“Bad experiences don’t stop us. We learn from them. And one thing I’ve learned is to find stronger partners,” he says.
Additionally, Lee says, he had no choice but to continue being an entrepreneur. He still had debts to pay off and employment alone wasn’t going to clear his dues.
In 2002, he found another partner based in Kajang, Selangor who could manufacture cleaning solutions for him. They started a company to do contract manufacturing of cleaning products.
This time, the partnership led on to better things.
While the manufacturing business grew, Lee saw a need to also create their own brand.
“Having your own brand and market is important. When you have your own brand, the value of the brand belongs to you.
“We moved from focusing solely on product development to developing cost-effective and creative ways to market our products,” he says.
So the following year, Lee started Kleenso Resources with his wife to focus on marketing efforts for its own brand of Kleenso cleaning products.
Lee jokes that he started Kleenso Resources with a capital of “negative RM200,000” as he was still paying off debts from his first venture at the time.
With the establishment of the new company, he drew the line on production. Kleenso Resources will focus on producing products such as floor cleaners, toilet cleaners and industrial cleaners. Meanwhile, his Kajang-based partner will continue to build on its contract manufacturing work as well as focus on other products such as car care detergent and laundry detergent.
“We worked with local chemists and chemical suppliers to formulate our first cleaning solution, the Kleenso 9-in-1 Anti-Bacterial Floor Cleaner,” he says.
But marketing your brand of cleaning solutions is nowhere near as easy as doing contract manufacturing. Lee notes that large retailers only started accepting its products in 2012.
The consumer floor cleaner industry is highly competitive with a market dominated by the more established multinational corporations such as Unilever, Reckitt Benckiser and Lam Soon Group.
“When I was teaching, we used to look at the market and think, if we could only get 1% of the market, that would have been good enough. Unfortunately, even till now, 1% is still a dream,” he laughs.
But Lee is hopeful that his Kleenso brand will be able to clinch that 1% market share by 2019 and a 3% share by 2022.
“We introduce different elements in our products to stand out in the market such as different concentration levels, different fragrances like lemongrass, and different types of additives.
“If we can get the market share, demand for our products will naturally grow. Your distribution will also eventually mature and your systems will follow. It will be a different ballgame altogether,” he says.
Kleenso Resources is undertaking a housekeeping exercise to stream- line its operations and product range to put it in a position for growth. He is contemplating whether or not to allocate more resources to expand its contract manufacturing segment or to focus more on its own brands instead.
Lee is also reviewing its product ranges and intends to discontinue underperforming products. Apart from its Kleenso brand of products, the company also produces eco-pest products under the Pesso brand.
He is also looking at plans to expand from its current 15,000sq ft facility in Subang Jaya to a threeacre site in Dengkil over the next two to three years. The new space would give the company more room to install automated lines to increase efficiency and reduce cost.
Lee is interested to modernise its operations. The use of enterprise resource planning, web-based marketing and cloud-based technology are some of the things that he wants to include in the next phase of the company’s growth.
However, he notes that there are challenges to implementing new technology at the company.
“Some departments are quite reluctant to catch on. Cost is another consideration. But we try to allocate a percentage of our revenue to upgrade our manpower and technology every year,” he says.
Kleenso Resources achieved revenue of about RM7.6mil in 2016. Lee
is targeting turnover of RM10mil this year and RM20mil by 2020.
He is optimistic about achieving his target as Lee notes that the business has been growing at about 20% every year. He expects better exports to also prop up sales.
Kleenso Resources started exporting its products about seven years ago. Today, its products are sold around South-East Asia, Hong Kong and more recently, Pakistan and South Africa.
Nonetheless, overseas sales is still small at only 7% of revenue. But with more effort to boost exports, overseas sales is expected to make up about 15% of revenue next year.
“We’ve come a long way. We started by manufacturing for other people, then we manufacture our own products. But I am still ambitious,” he claims.
Lee is eyeing a spot on the Leap or Ace Market once it grows in size. Perhaps sometime in 2022, he muses.
He hopes organic growth will bring the company further towards its goal. Failing which, Lee is open to the idea of acquisitions to add volume to Kleenso Resources.
But he is careful not to incur huge debts. He hardly utilises bank facilities extended to the company. These days, having a healthy cashflow and a comfortable reserve is what matters more.
For the record, Lee finally resolved his initial debt sometime in 2006.