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50-years of Quality: Shoon Fatt

Shoon Fatt has more than made its mark as one of South-East Asia’s leading biscuit producers since opening its doors for business in 1966. In addition to being one of the most popular biscuit and confectionary brands in Malaysia, and the wider South-East Asia area, Shoon Fatt has aggressively expanded its international export market over the past two decades.

These are exciting times for the company. We at Endeavour Magazine managed to speak to Mr. Loo Chun Kheong, General Manager of Shoon Fatt, to find out more about his business, not to mention its delicious biscuits!

The global biscuits and snack bars market is a US$104 billion industry, which continues to grow exponentially year-on-year. As the transfer of wealth and power from West to East continues apace, increasing levels of disposable income and a fast-growing middle-class in the region means that the South-East Asian biscuit market is booming. More hungry consumers means more opportunity for the dynamic producers who can satisfy this increased demand for tasty, high-quality products.

The market is there for the taking, in other words, and Shoon Fatt, one of Malaysia’s oldest and best loved biscuit and confectionary manufacturers, has taken expansive measures in recent years to take its own operations and production facilities to the next level, whilst continuing to satisfy the demands of customers old and new, and stay ahead of the competition.

A WELL-LOVED AND MUCH-LOVED PRODUCER WITH OVER 50-YEARS OF SUCCESS

Mr. Loo told us: “We have made a huge effort over the last 10-years to improve the way we do business, improve our fantastic products, and to give customers what they want: a product which tastes delicious, and which meets all international safety standards on quality and safety.”

He continued: “Shoon Fatt is one of the oldest, most trusted biscuit and confectionary producers in the country. We can more than match our international rivals in terms of taste and quality – no-one ever thought a small provincial town like Teluk Intan could be home to such a quality producer!

As a specialist producer of corn crackers, cookies, wafer rolls, and sandwich biscuits which it sells to a loyal customer-base, at home and abroad, Shoon Fatt has a portfolio of sweet treat products to satisfy all tastes. The company has come a long way since 1966, when it started life as a humble shophouse in Durian Sebatang. Over the decades that followed, Shoon Fatt has grown quickly. After shifting operations to a small factory at Kampung Banjar in 1976, business went from strength-to-strength as Shoon Fatt went on to capture an increasingly sizable share of the market, first in Malaysia and then in neighbouring countries.

According to Mr. Loo , this rapid success is all down to the quality of Shoon Fatt’s products. He said: “We are well-received across consumer segments, and enjoy a healthy growing market share. Our strong relationship with our customers and quality products means that international competitors haven’t been able to break into our market.

As an example, our ‘Naiyu Jagung’ corn crackers product line is No.1 in the industry, and is much loved by consumers for its unique and crunchy taste.”

AN EXPORTER OF HIGH-QUALITY BISCUITS AND CONFECTIONARY TO MORE THAN 30-COUNTRIES

Today, the spread of countries which Shoon Fatt exports its biscuits and confectionary to includes Singapore, Bahrain, Brunei, Cambodia, Canada, China, Hong Kong, Macau, South Korea , India, Ghana, Indonesia, Thailand, Taiwan, the Maldives, Mauritius, New Zealand, Nigeria, Vietnam, the US, and a number of countries across the Middle East.

If you reside in one of these thirty or so countries, the Shoon Fatt, SF, and Vidory brands will likely be known to you. Certainly, you yourself may have found yourself snacking on the group’s selection of delicious biscuits, cookies, crackers, baked potato snacks, sandwiches or wafer rolls at some stage or another. So lucrative has Shoon Fatt’s expansion into international markets been over the last 20-years that the group now generates in excess of 30% of turnover from international sales.

Shoon Fatt’s journey to the top hasn’t been without its challenges, however. As a company which caters to the low to middle-income markets, Shoon Fatt has over 50-years come to dominate the field. However, for all its continuous growth, rising operational costs have resulted in increasingly narrow profit margins for the business, which has thus far avoided passing on these increased costs to the customer.

OVERCOMING HURDLES AND CHALLENGES THROUGH ASTUTE INVESTMENT

“The rising cost of ingredients is presenting us with a major hurdle. Nevertheless, we still continue to produce our biscuits and confectionary without short-changing the customer in terms of taste, quality of ingredients or reducing the size of our biscuits and confectionary.

We have focused on improving efficiency and leaner operations, along with reducing wastage, and improved planning and business strategies.”

Shoon Fatt has achieved improvements in operational efficiency and production capacity as a result of heavy investment in its facilities. At great cost, to the tune of US$2.5 million, the company has rebuilt its entire production area over the past decade, allowing Shoon Fatt to produce up to 95,000kg of biscuit and wafer rolls per-day, and invested a further US$1.5 million in warehousing infrastructure and operations systems upgrades. However, Mr. Loo was keen to emphasise the company’s investment in repositioning Shoon Fatt, and its intention to pivot more towards the luxury market over the coming years.

“The transition from old to new plant facilities, the embrace of new technology and adoption of modern operations has resulted in continuous growth and increased market share. However, overlooking the importance of boosting our brand and setting in place a dynamic marketing strategy was admittedly a mistake for the company,” he told us.

RE-INVIGORATING AND RE-POSITIONING THE BRAND

“We’re currently working with lead brand strategists to help us reinvigorate our existing Shoon Fatt brand and product offerings. In addition to updating our packaging and re-positioning our brand, we are in the process of applying for the Mark of Malaysia Brand Status; an elite award which can only be issued by the Malaysian government, and which will strengthen our reputation in the international arena.”

Shoon Fatt remains committed to its existing product lines and loyal customers, but Mr. Loo has, in light of the company’s continued profits squeeze, wisely decided to diversify the company’s target markets and product offerings. Insofar as specialisation is a crucial component for success in modern business, equally, it is unwise to put all of your eggs in one basket.

On his company’s anticipated entrance into the premier biscuit and confectionary market, he said: “In addition to our fantastic product offerings to the mid and low-income customer markets, we are excited to announce that Shoon Fatt will create a new unique brand aimed at the luxury biscuit and confectionary market.

AN EXCITING ENTRANCE INTO THE LUXURY MARKET

This new premier range will differ from our existing brand and target markets, and allow us to reach out to new customers. This is an exciting time for the business. Our marketers and consultants are in the process of building entirely new brands and business-lines to appeal to wealthier, more discerning consumers”

He then went on to say: “Our range of biscuits and treats is already diverse, to satisfy the varied tastes of our different customers. To add to our portfolio of biscuits and snacks, we’ll be launching a new line of butter cookies, along with new baked potato snacks and potato chips. We’re excited about this, in terms of the market penetration it will give us into the snacks market.”

These are heady times for Shoon Fatt, but while the company anticipates great success from its forthcoming re-brand and re-orientation to the luxury market, Mr. Loo is keen to point out that his business will remain as committed to the taste, quality, and safety of its products as it always was.

ONGOING COMMITMENT TO TASTE, QUALITY, AND INTERNATIONAL SAFETY STANDARDS

“As a respected exporter to international food markets, compliance with government bodies and adherence to international safety and quality standards is a must. We are committed to producing quality products that our customers will enjoy.

The customer is at the heart of what we do. We are keen to get feedback from our customers on what they enjoy about our products and where they feel we can improve. This feedback is invaluable to our company.”

Before concluding our interview, Mr. Loo finished by telling us about the new promotional tour which Shoon Fatt is set to embark on later in 2016, as the company sets out to reach out to consumers.

“We have a first-of-its-kind Biscuit Food Truck which is set to hit the road late this year. We’re excited because the truck will go on a promotional tour which will give us the chance to introduce our delicious range of biscuits and confectionary to both existing loyal customers and soon-to-be customers across the country and the region.

This isn’t just about creating brand awareness but interacting with our consumers. We’re passionate about biscuits at Shoon Fatt and we want to spread this passion far and wide. It’s all part our new mission of ‘Satisfying Hunger, Anytime, Anywhere!”