'FOR the crown section of the crocodile skin, you'll have to soak it in the strong pickle to ensure the bones are softened,' says C T Koh, managing director of Heng Long International, as he reaches out for a piece of crocodile skin soaked in the acidic solvent and runs his fingers across it to illustrate his point. The fact that the solvent is highly acidic does not bother him, neither does the nauseating smell of dried alligator skins laid out on the factory floor. After all, Mr Koh is no stranger to this rare trade of manufacturing crocodilian leather, having done so since he learnt the skills from his father as a child.
Even before the founding of Heng Long Leather Company in 1977, the family-run business had been in operation, selling crocodilian leather to souvenir shops and small-time merchants. Today, Mr Koh, his father and brother run the company.
Heng Long International has come a long way from its beginning days to become one of the five top-tier tanneries of crocodilian leather and top two independent tanneries. Its global network spans 20 countries with decade-long relationships with clients such as Prada, Hermes, Stefano Ricci and Franck Muller.
The company imports a diverse range of crocodilian skins such as the Nile crocodile skins from Africa, premium alligator skins from the United States and Caiman crocodile skins from South America.
Similarly, Heng Long's diversification over the past two decades has also seen the company expand from supplying leather for the manufacturing of handbags to the more luxurious niche market of leather for watchstraps and beyond.
Riding the international waves has also been on Heng Long's agenda since the early 1990s. The company was only operating within the Asian market previously, supplying its leather to Thailand, Taiwan, and Japan. This aim brought Mr Koh to Europe every year during the 1990s, in a bid to showcase Heng Long's finished-leather products in fashion trade shows.
Technology and innovation
It was through many of these trade shows that Mr Koh engaged a German manufacturer to produce custom-made machinery suited for the tanning of crocodile skins.
'Most machinery available at that time were only suited for tanneries dealing with cow hides. Moreover, these machines were independent of each other, not allowing an integration of the complete process,' said Mr Koh.
With the newfound technology, Heng Long became the first computerised tannery in the world, boasting an integration between both machines and software to streamline the entire tanning process. Today, Heng Long is offering consultancy to other tanneries around the world on the efficient management of the entire process.
Beyond such technological groundbreaking, the company has also improved its logistics and management of finished leather, in a departure from conventional management styles common in European tanneries.
'You've got to have your own standard when running a business and not just follow blindly,' says Mr Koh, citing the company's shift from a standard table-run system offered by competitors to selling skins by grades.
This system has been particularly effective in value-adding to his clients, allowing the company to retain relationships with the big players of fashion houses, he adds.
Passion, interest and loyalty
When asked about his secrets to success, Mr Koh shies away from suggesting any silver bullet to his present-day accomplishments but rather humbly attributing it to his business acumen and passion for the business.
'More than just the technology and experience, what really goes into building a fine piece of leather is putting your heart and soul into it,' Mr Koh said. 'I used to work in the day tanning leather and do my research at night,' he recalls, stating how sheer interest in the business gave him the drive to carry on.
Fifteen years after founding the business, Mr Koh roped in his brother C H Koh, now executive director in the company. 'Running a family business, it helps to have a partner that shares a similar passion with you,' he says.
Mr Koh also knows the benefits of a close-knit environment, which explains how some of his original workers are still part of the company today. His workers, he says, would willingly stay on late into the night just to ensure orders are met. 'I really am grateful to have staff that share the same passion as I have for the company,' he adds.
IPO and beyond
Heng Long was awarded the ISO 9002 certification in 1998 and acquired a new factory to cope with growing demand in 2000. The company was listed on the Singapore Exchange mainboard in July this year.
The proceeds raised would be used to 'expand current finishing capacity, hire more production staff and bolster our market position through acquisitions, joint ventures and strategic alliances', stated Mr Koh at the company's initial public offering. In its Q3 2008 results in November, the company saw a commendable 13 per cent increase in revenue to $17.8 million. Net profit rose 14.2 per cent to $3 million.
Despite the slowdown in the world economy and possible decline in global luxury sales, Mr Koh believes his company will ride out the crisis and hold on to its dominant market position.
This article was first published in The Business Times on December 30, 2008.
