BY LYNN KWEK, NGUYEN BAO THU, NUR KHAIRAH BTE ABDUL RAHIM and VO HOANG DUNG

THINK steel containers, and what comes to mind? Perhaps the image of containers transporting large quantities of materials among various ports of call may be conjured up first.

One company, however, may very well push you to redefine this perception through its breakthrough usage of these large steel containers. Imagine temporary personal housing, temporary offices, temporary classrooms, even temporary aircon showrooms - all created out of those very same steel containers!

LBG-NGT Corp Pte Ltd, a merger between LBG Pte Ltd and NGT Pte Ltd in 2003, is a pioneer of this unique and growing prefabricated temporary housing industry. With over 20 years' combined experience, it is of little wonder that LBG-NGT currently holds about 50 per cent market share of the local prefab temporary housing market. Experience, however, is just one of the many ingredients in LBG-NGT's recipe for success.

Delivering quality

LBG-NGT general manager Kent Wai, who was with LBG Pte Ltd even before the merger, emphasised that high quality and speedy service are LBG-NGT's differentiating trademarks. This commitment is evident even in the choice of the new company name, Anderco Pte Ltd, roughly derived from the Chinese words representing safety ('An'), integrity ('De') and speed ('Jie').

Quality is of such paramount importance that it becomes the basis upon which LBG-NGT selects its suppliers and projects. LBG-NGT insists on sourcing for high-quality steel supplies only from trusted overseas suppliers, and it takes on a project only if it can be completed within the desired time frame without compromising quality. Although higher-quality supplies translates into higher costs, this is viewed as necessary investments to 'maximize the value' of their services to clients.

'Just do it' spirit

In line with its aim of providing maximum-value-for- money services, LBG-NGT adheres closely to the popular marketing adage of 'treating customers like kings'. LBG-NGT has constantly tried to accommodate the demands of its clients, even if this may mean treading on unfamiliar ground. Mr Wai explained, 'It is this 'just do it' attitude of our employees that has given rise to innovative designs and processes to meet our clients' very specific needs.' The successful construction of the first-ever four-storey living quarters in Singapore for client Soon Lee Lodge bears testament to the remarkable results that LBG-NGT's innovative culture is capable of.

To increase the value of its proposition and to better satisfy its clients, LBG-NGT has also developed itself into a one-stop total temporary housing solutions provider. This entails the manufacturing and customisation of containers, design and assembly of temporary housing solutions and even the provision of furniture, if requested by clients.

It is no wonder then that LBG-NGT attained a revenue turnover of close to $100 million last year, servicing as many as 30 projects each month during busy periods. It takes pride in having served clients such as Exxon Mobil, Stamford American International School, Raffles Girls' Secondary School, National University Hospital and the Marina Bay Integrated Resort.

New markets

The current economic downturn may mean less business, but LBG-NGT is certainly not throwing in the towel. Instead, as Mr Wai remarks: 'This downturn has certainly given us the added impetus to actively source out new markets.'

To better deal with the estimated 30 per cent reduction in local demand for temporary housing solutions this year, LBG-NGT has set its sights on overseas expansion. With the help of an established foreign partner, it is already in the initial stages of venturing into the Middle East market. Overseas expansion is regarded as a necessary move especially with the increasing saturation of the local temporary housing market.

Venturing into the Middle East market is, however, not the first overseas project for LBG-NGT. Last year, in the aftermath of the Sichuan earthquake in China, it collaborated with a steel supplier in Guangdong to provide temporary housing solutions for victims in the area.

This praiseworthy act of goodwill is reflective of LBG-NGT's readiness to utilise its expertise and deploy its resources for humanitarian causes even overseas.

Strategic alliances

LBG-NGT further sets itself apart from the typical company with its success in and positive attitude towards mergers and strategic alliances.

Given the large proportion of mergers, acquisitions and alliances that fail, these activities are often treated with great care and caution in the business world. The successful merger between LBG Pte Ltd and NGT Pte Ltd in 2003, however, proves that despite the risks involved, mergers can offer great returns if they are done right.

The idea for the merger was born in 1998 when they were approached by their first client Exxon-Mobil to build workers' dormitories on Jurong Island.

The sheer audaciousness of the initially 'radical' idea of transforming containers into prefabricated temporary housing soon won over LBG's founder Lim Bong Guan and Mr Wai, and was seen as a stepping stone to vast opportunities. LBG-NGT's openness to mergers is therefore seen as a significant ingredient in its strategy to remain competitive.

It is sticking true to this strategy and is currently exploring a potential merger with one of its Chinese suppliers. Through this mutually beneficial partnership, LBG-NGT hopes to extend its strategic control of the supply chain so as to reap higher cost savings and ensure greater quality control of its products.

This merger is also planned to serve as a launching pad to expand into new overseas markets so as to fulfil its aim of maximising its growth potential in the prefabricated temporary housing industry.

Bright future

Today, six years after its merger, it is clear that the business acumen of Mr Lim and Mr Wai was not misplaced. To date, LBG-NGT has provided temporary housing solutions to clients from a wide spectrum of industries ranging from hospitals, schools, construction and even retailers. It is precisely the versatility and flexibility of this product line that makes it such a viable answer to the temporary housing needs of its clients.

However, LBG-NGT business development manager Johnson Phua acknowledges that versatility and flexibility alone may be insufficient in its quest for new clients. As such, in the hope of boosting the appeal of its products to a wider clientele, efforts are now underway to improve the aesthetics and visual appeal of the container temporary housing structures.

At a forecasted compound annual growth rate of close to 6.9 per cent for the period 2001-2010, the Asia-Pacific prefab temporary housing market is the fastest growing in the world. With such bright future business prospects and armed with such a flexible business product line and a tenacious spirit, LBG-NGT looks well geared to achieve growth in not just its clientele size but also in its top and bottom lines. Indeed, LBG-NGT can be regarded as a daring player striving to reach a league of its own.

The writers are students at NUS Business School

This article was first published in The Business Times.