SINGAPORE'S small and medium enterprises (SMEs) are sometimes accused of lacking creativity and entrepreneurial spirit. But Microwave Packaging, for one, has built its business around a product of its own design.
Mr Lau: A trip with Spring Singapore to Japan last year may be opening new doors for the company which is now in talks with partners there for cross-licensing of their design
Microwave Packaging was founded by managing director Leonard Lau, who has more than 35 years' worth of experience in packaging and design. During a visit to Taiwan more than 20 years ago, Mr Lau noticed that food vendors were using grease-proof paper boxes for takeaway meals - a more sophisticated form of packaging than what was available in Singapore at the time.
Yet these boxes had one flaw: they could not be closed without a rubber band. Mr Lau wondered if the design could be improved, so that the box could close securely by itself. Although Mr Lau's friends in Taiwan said that such a design was impossible, this merely made Mr Lau more determined to find a solution.
After almost 10 years of development, Mr Lau patented his box design in 1999. But that was only the beginning, for he then had to design his own manufacturing equipment. It took two scrapped machines before Microwave Packaging finally developed its first functional, semi-automatic machine in 2003.
In 2004, it secured its first big contract - with the Singapore Armed Forces (SAF). Singapore's National Servicemen now eat their out-ration meals out of Mr Lau's patented boxes. The box has a maximum compression strength of 37 kg, allowing many such boxes to be stacked for easy storage and delivery.
The SAF contract has since given rise to many smaller ones. Some National Servicemen who started their own food businesses after their time in the army remembered Mr Lau's boxes and are now Microwave Packaging's customers.
Some customers have seen business increase up to three-fold in the few years since they switched to his packaging, added Mr Lau. The advantage of Microwave Packaging's product is that takeaway meals can be refrigerated and microwaved in the same box.
The product design also ensures that food remains fresh and tasty, with features that have won several awards, including a World Star Packaging Award from the World Packaging Organisation in 1999.
The box is also washable, reusable, and biodegradable, since it is made from waterproof, food-grade paperboard. Microwave Packaging has since achieved the Singapore Green Label, and won at least one environmentally concerned customer: Raffles Girls' School, which now uses Microwave Packaging's boxes in its canteen.
Despite such a successful design, however, Mr Lau has not found it easy. He describes the experience as 'a very hard climb'.
'For start-ups like us, it is very difficult to get financing,' he said. 'Money is our biggest hurdle.'
Even when Microwave Packaging clinched the SAF order, said Mr Lau, they found it hard to raise enough money for the required machinery. One option they explored was taking loans from Spring Singapore.
Since then, Spring has also helped Microwave Packaging in other areas, such as providing networking opportunities with venture capitalists, and involving the company in trade fairs or business mission.
A Spring-organised trip to Japan last year, for example, may have opened new doors for the company. Microwave Packaging is now in talks with partners in Japan, for cross-licensing of their design.
However, overseas expansion may not be possible without Microwave Packaging having first built a strong foundation, said Mr Lau. And in Singapore's small market, 'it is very difficult to build a foundation of wealth'.
Still, Microwave Packaging has big plans. It hopes to clinch large contracts with customers such as the Singapore Prison Service and airlines, as well as diversify its product range by moving into lower-end products.
Mr Lau hopes that new, cheaper product ranges will appeal to customers such as small hawkers, who might not be able to afford the original product with full functionality. 'We are on the move,' said Mr Lau.
The company also hopes to leverage on an existing product feature to spin off a new business: its boxes provide a good avenue for branding, as high-quality printing is possible.
Now, Microwave Packaging's direct customers may not be the only ones who will benefit from this, as Mr Lau has plans to sell advertising space on his boxes.
Not only would Microwave Packaging earn more revenue, its food vendor customers would have their costs subsidised by third-party advertisers. Mr Lau describes the idea as 'a very effective advertising tool, where the hit rate is one-to-one'.
Yet for this - as for all other development plans - Microwave Packaging will need financial strength to begin and sustain this new business, said Mr Lau.
