Moving up the value chain

DON QUAH, managing director and founder of Yan San Metals (YSM), is only half joking when he says the company's latest undertaking can eliminate the haze.

The proposed solution? A machine that is able to convert waste to energy.

"The plan is to rent this to Indonesia and reduce the haze problem," says Mr Quah. "When they cut down the palm, they can throw the waste into the machine to generate electricity. The char can be used to fertilise the land."

Burning season usually peaks from July to October during the dry season, when farmers employ slash-and-burn methods to clear vegetation for palm oil, pulp and paper plantations.

What makes this new system unique is there is no burning of waste at all.

As part of the process, raw waste - whether food waste or general trash, waste from factories and industries or plantations - is transformed into feedstock, which is then fed into the system's reactor to produce syngas.

Syngas is mostly carbon dioxide and hydrogen and can be used to produce electricity. Char, which is created as a byproduct, can be used as fertiliser.

Further, the system is containerised, meaning it can be easily transported and added to according to each client's needs.

This technology was first developed by a US-based defence company before it was acquired and commercialised. A goup of Singaporean investors bought the IP and invited YSM to be one of the stakeholders.

YSM has already contracted the different components out to its manufacturing sources. It expects to assemble the system and roll it out within the next two years.

"We are in a very early phase of this collaboration. One of the key improvements our partners are working towards is increasing the capacity of electricity generated," Mr Quah says.

In the current model, a single unit is capable of processing 80 tonnes of raw waste or 40 tonnes of feedstock per day.

This is but one of the ways in which the company is actively innovating.

YSM, which started as an aluminium stockist, is constantly on the lookout for opportunities to move up the value chain.

For instance, it used to supply raw materials to manufacturers of fire-rated doors. It subsequently decided to move up the value chain and manufacture the entire door in-house.

"Material distribution has limited growth, especially when the Chinese mills are growing rapidly. Hence, we needed to provide a wider range of services to remain competitive," says Mr Quah.

Today, YSM is a one-stop service centre for aluminium conversion and its current business model includes three main pillars: distribution, value adding and product development.

Indoor farming solutions

Another product that the company is excited about is its indoor farming solutions.

Asked why he decided to go down this route, Mr Quah jokes: "We had the space!"

But the process was obviously deliberate.

"I got to know Mr Quah partly because of the indoor farm," says Samuel Kueh, the general manager at YSM. "He was looking for someone to develop the cooling system."

The indoor farm is located on the top floor of its new factory space and is sealed off from the rest of the factory in a clean room facility. The other thing which you immediately notice is that the room is a lot cooler than the rest of the space.

It is, in fact, cooled by radiant cooling ceiling panels. This, along with the structure for the indoor farming solution itself, was entirely designed and fabricated in-house.

"We started off with a single rack in our office as a proof of concept. Subsequently, we designed a commercial farming system and have successfully set up a 1,500 sq ft indoor farm," says Mr Kueh.

"We're still very much learning the trade and fine-tuning our design. We hope we can share our experience with the local agriculture industry."

He adds: "In the last few years, there has been much emphasis on climate change and how it would affect food supplies globally. Hence we decided that indoor farming would be an up-and-coming field in the near future. This decision is partly justified with our government recently launching the '30 by 30' initiative."

This goal to produce 30 per cent of Singapore's nutritional needs locally by 2030 was announced by Environment and Water Resources Minister Masagos Zulkifli in March. This move is targeted at improving food security, given that Singapore currently imports over 90 per cent of its food.

These technologies, including the multi-layered hydroponics system and recirculating aquaculture systems, can produce 10 to 15 times more than traditional outfits and are less labour-intensive.

Respect the machine

Keeping an active lookout for new products to develop or existing products to which YSM can value-add comes naturally to Mr Quah, who regularly attends different trade shows to learn about new technologies.

But the reason the company is able to identify and then tackle identified trends so quickly is in large part due to his willingness to invest.

"I think equipment is very crucial, they give you high and consistent quality and in large volumes. And, you can cut down your manpower resources.

"A lot of people might think Singapore is not the right place to do manufacturing. But Singapore is the right place, you just need to invest in the right thing."

Indeed, all of YSM's aluminium-related manufacturing is done in Singapore before it is delivered round the world. The company has only in the last two years started making detailed plans to expand its aluminium business to Thailand.

"We believe having a strong foundation in Singapore is fundamental. Only with that can we gradually grow outwards and upwards steadily," says Mr Quah.

"Thailand is termed the 'Detroit of Asia' due to its automobile industry. It has vast potential for us to expand our aluminium operations there."

Humble beginnings

The company has come a long way since it was founded in 1992. Prior to establishing his business in a small rented open carpark space in Pandan Crescent, Mr Quah worked for an uncle who himself ran an aluminium stockist.

The very first "machine" he bought was a set of hand saws which cost S$700.

"YSM started off as a stockist, distributing aluminium materials and providing very limited value-added services, like cutting to size using basic hand tools," he recalls.

"I started in a carpark because the rental was only S$1,000 for 2,000 sq ft of space. So it gives you no pressure about the overheads."

Within a year of starting his own business, he invested S$270,000 in the company's first automated machine.

"With this investment, YSM was able to cut up to 100 mm thick materials and cut to required size with greater precision."

Another key investment for the firm was a plasma cutting machine which allowed it to penetrate into the marine industry, selling materials required by shipyards, and a cut-to-length line which allowed YSM to buy aluminium coils rather than standard sized sheets. This greatly increased YSM's product listing and also provided savings and reduced scrap materials.

"We do what we're well-versed in," says Mr Quah. "I anchored myself in shipbuilding first. At the time a Holland yard came to Singapore to invest and they asked us to supply them with materials. By taking this journey with them, we learned that there is a lot of usage for aluminium."

It is also worth noting that Mr Quah's pivots came early in the game, as he knew the importance of moving out of distribution.

"Learning from the Americans, Europeans and Chinese, we recognise the importance of developing our own products," says Mr Quah.

"In the past 27 years, YSM has been actively developing our own products. Examples of this is the honeycomb core, aluminium tape and ceiling panels."

YSM acquired its first factory space at Tuas Ave 1 in 1997. In 2006, it acquired a larger factory space at Tuas Ave 4. This represented the next phase of growth, says Mr Quah.

"The larger factory space gave us an opportunity to further expand our capabilities, providing more comprehensive services to our customers. Hence, S$5 million was invested in automated machines."

Mr Quah is quick to stress that it is not simply about blindly investing in the best machinery.

"It is more crucial to invest in what we need, invest in what would enable us to move up the value chain, invest in equipment and skills that would compliment our core business of aluminium conversion," he says.

"While the investment was significant, it equipped YSM with the capacity and capabilities to enter the construction industry."

Today the firm is the only company in Singapore equipped with a coil-to-coil, colour coating line capable of handling a wide spectrum of Kynar 500 Fluorocarbon (PVDF) paint system finishes.

The windcatcher structure on top of CapitaGreen, for instance, which was designed to look like flower petals and captures cool fresh air and channels it into the office floors, was manufactured and coated by YSM according to the architect's requirements.

"This coating gives you the assurance that after 20, 25 years, there is still no fading. You can compare prices or you can compare material," says Mr Quah.

"Our coating has the correct ratio of top coat and primer to ensure that our paint will last longer. Cheaper alternatives may use a higher ratio of primer as the cost of the primer is cheaper."

The firm differentiates itself by moving up the value chain and positioning itself as a solutions provider. By focusing on quality and tailoring its products to customer's needs, it keeps ahead of the game.

"If you can move up the value chain and control the IP (of your products), you can grow your business. Our prices are competitive and we can get better returns because we house everything here."

He adds: "Enterprise Singapore believed in our vision and growth model and strongly supported our business plans to expand our operations and factory space."

Mr Quah was, ironically, hesitant about collaborating with Enterprise Singapore at first.

"I got to know about Enterprise Singapore through PwC when they came to see what I was doing and asked if I needed support from the agency," says Mr Quah.

"I have always believed that it's better to rely on ourselves. I didn't know what kind of conditions they would come up with. By the time they agreed to help I might have finished the entire project already! But when I met them, I saw they were willing to work with us and support us. That more or less changed my mindset."

Indeed, Enterprise Singapore has worked with YSM on different productivity improvement projects over the years, including linking it up with other government agencies like the Agency for Science, Technology and Research (A*Star).

Enterprise Singapore also supported YSM's implementation of a heavy tonnage automated storage and retrieval system. According to Mr Quah, it could previously take up to a day for YSM to retrieve an item if it was inconveniently located. Now, retrieval takes up to three minutes.

Developing deep expertise

Despite his many years of experience, Mr Quah still keeps up to date with the latest market trends by personally sourcing new manufacturing technologies and attending different trade shows overseas.

"When you visit the big MNCs in Europe and you walk the ground, you discover a lot of things. Like, you discover you can get a machine to transform aluminium scraps into bigger pieces that you can sell for a higher price."

Indeed, it was thanks to Mr Quah's walking the ground that the firm today is one of the leading manufacturers of aluminium honeycomb core composite panel systems.

These are essentially aluminium sheets that sandwich an aluminium honeycomb structure and can be utilised in walls, floors, roofs, doors and a wide variety of partitions because of the inherent strength derived from the honeycomb structure.

Today, YSM is the only company in the South-east Asian region to have a complete aluminium honeycomb composite processing line.

"I had a supplier from France that supplied us with aluminium. At the time, when I visited the mill, there was a company in the south of France that had gone into insolvency so they asked me whether I was keen to go take a look at what they were doing and maybe buy their second-hand machines," says Mr Quah.

"I discovered this company does honeycomb cores and that it's actually made using a printing process. What surprised me is that they actually use very primitive equipment and my machine is more advanced than theirs."

Mr Quah started a printing business with a couple of friends in the early '80s. His uncle bankrolled the business in the beginning and he subsequently bought over the controlling stake in the business from his uncle in 1991. Today, Laser Printing Industries is one of YSM's crown jewels. It has four subsidiaries of its own in Malaysia, Thailand and China.

Upon returning from his trip, Mr Quah turned his attention to modifying the existing machines used in the printing business and started producing his own honeycomb cells.

Asked if he is trained in engineering, Mr Quah laughs. "My highest education is secondary four! It's more of the will to get things done ... and, over the years, we've been able to get knowledge from the things we've seen visiting mills and exhibitions.

"I always encourage our staff to visit shows and visit factories to gain knowledge overseas because you need the fundamentals to grow a business."