Big money in kuay teow

Updated: Saturday March 15, 2014 MYT 8:31:40 AM

Big money in kuay teow

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The kuay teow production lines at Ipoh Kueh Teow and Noodles.

IN January 2014, the selling price of 100g of kuay teow in a leading hypermarket in Kelana Jaya was recorded at RM1.45.

So, if Pan Siew Kim, 55, a char kuay teow hawker in the Sun Sea Coffee Shop in Taman OUG, Kuala Lumpur, uses some 8kg of these white silky strands in her wok by the end of a shift, she would have cooked up RM116 worth of the flat rice noodles in a day.

This is, of course, an extremely conservative figure.

Imagine if only one third of Malaysia’s 30 million population were to slurp down 200g of rice noodles for breakfast alone. In just one day, we might be looking at a whopping 2,000 tonnes of cooked rice flour in our digestive tracts. And for the anonymous brand,it might mean a sales target of RM28mil!

That, said Mecanique Ng Chun Nun, director of Ipoh Kueh Teow and Noodles in Jelapang, Ipoh, was the potential in the humble kuay teow.

As such, it is not uncommon to see new players, like Foo Won, with 30 years of history in wantan noodle manufacturing, joining the game.

Foo Won managing director Cheah Pak Foo, 55, clearly recalls why he took out RM11,000 of his hard-earned savings to invest in a second hand oven to start his ownkuay teow production line in 2007.

“For the sake of variety, it is not uncommon for wantan noodle makers to offer customers a mix of products like yellow noodles, needle noodles and kuay teow from other manufacturers. Eventually, the time came when my kuay teow supplier said he could no longer supply to me because I was clearing out his stock.

“Realising it would not be fair to his other customers, I decided to make my own kuay teow,” Cheah smiled.

Big player

Currently, the biggest player is none other than Ng’s factory, with four production lines chugging away to produce 20 tonnes of the stuff daily. Though his factory has been a supplier for major supermarket chains like Econsave, Mydin and NSK in the last four years, he revealed they were only able to cater about 1% of the demand on a nationwide scale.

For the sake of preserving the reputation of Ipoh’s famous noodle, market dominion is not part of Ng’s future plans.

Conquering the market will require rapid sales and one way to achieve this is to reduce prices.

“Messing around with price ceilings is going to jeopardise the industry as a whole. Reduced profit margins may hamper the smaller players from heightening their company profile or affect quality and research. In the end, it will damage the reputation of Ipoh’s most famous noodle,” said Ng.

Preservation, said Ng, ultimately required manufacturers to “stay true”.

“The genesis of kuay teow manufacturing can be traced back to the cottage industry. In the 1980s, when my father, Lim Fah, now 63, started bringing machinery into the business that my granduncle started in the 1950s, we were still operating from a terrace house in Jalan Chung Ah Ming in Pasir Pinji. Words like research and development, management, marketing and branding were unheard of,” the accounting graduate from Multimedia University said.

It is estimated that there are between 1,000 and 2,000 kuay teow makers in Perak alone.

Some will send their products to wholesalers and let them do the rest. Others may resort to expanding sales avenues by selling direct.

However, all players have a gentleman’s agreement where salesmen will avoid dealing with customers who are already liaising with the factory’s wholesaler.

Winning recipe

Another upholder of the kuay teow tradition is one of Ng’s customers, Neow Ah Chye, 71, who runs a chicken and prawn kuay teow soup business at Thean Chun Coffee Shop in Ipoh old town’s Jalan Bandar Timah.

Neow, who runs the business with his son, Tze Kian, 49, reports a consumption of 51kg to 85kg of the noodle daily.

Tze Kian, a former supervisor in the fruit and vegetable department for Parkson supermarket before joining his father 14 years ago, revealed it was his great grandfather who got the ball rolling after the Japanese surrendered in 1948. The recipe, he claimed, has remained unchanged throughout the 66 years, save for the switch from kerosene stoves to cooking gas.

“Dad is not the type to experiment. If the recipe demands for so many kg of prawn shells or chicken bones, that would be the exact amount he puts in. He never messes with the recipe by looking for cheaper substitutes,” revealed Tze Kian.

Neow’s refusal to “experiment” is also the main reason why they have kept to their singular stall in Thean Chun since 1968.

“To expand in terms of franchising means we’d have to employ different ways of cooking. Some large chains I know have resorted to packing their base ingredients in sachets. This is something my father will never agree to because the extra processing will alter the taste. Then, there is the question of hiring extra help. The last thing my father wants is for an outsider to get their hands on the family recipe.

“So, the answer to expansion, in spite of offers of large sums of money, has always been a polite ‘no’. My father wants to stay original,” Tze Kian said.

Daily, sales average between RM700 and RM3,000. Per year, father and son can generate close to RM200,000.

The figure was what tempted Tze Kian’s younger brother, Chee Heng, 44, a former ITmanager in a logistics company in Shah Alam, to trade his monthly RM4,000 salary to open a branch in Goodwill Restaurant in Bandar Baru Puchong about nine years ago.

As Chee Heng is their flesh and blood, the elder Neow could not say “no”, though the idea was initially greeted with some protest.

“My mother kept asking me if I was sure. She warned me of the long hours and less than cushy working conditions but I was really very bored with my desk job. So, in the end, I got their blessings,” said Chee Heng, the youngest of four siblings and a father of two.

The secret behind the Neows’ winning recipe undeniably lies in their kuay teow, a “limited edition” produced by Ipoh Kueh Teow and Noodles.

“They have insisted on the thinnest kuay teow from my production lines. It is a wonder how they manage to prevent the noodles from turning to mush because I have supplied the same variety to hawkers in Taiping who complained of complete meltdowns during blanching,” Ng said.

Save for the recent effort by Chee Heng to brand the product under the tricycle logo, they have not had to spend much to gain coverage from food bloggers.

“They always come to us. We have never looked for them,” revealed Tze Kian.

The moral behind their story? Concentrate on your product and fame will eventually come a-knocking.

In Chee Heng’s case, “fame” has translated to monthly sales of RM10,000, double the figure of his former paycheck.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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