Posted : 18 October 2010

Susan Chong, founder and managing director of Greenpac, and some of her 'toys'.

Eco-friendly? Very good! How much?

She doesn't seem like an eco-warrior. But the founder and managing director of Greenpac, Susan Chong has managed to green the world, one business solution at a time.

Chong joined her husband's family-owned packaging and factory relocation business in 1996, after she spent the previous few years in the hotel and pharmaceutical industry.

While she was there, Chong was tasked with handling major relocation projects, and she slowly began to nurse the idea of offering environmentally-friendly innovations to the people whom she believed needed them the most.

The constant jet-setting around the different continents attending packaging exhibitions while performing her marketing duties, led her to notice that the Europeans had brilliant packaging ideas that not only reduced space and raw materials, but also ultimately translated into savings for their customers.

By the time she decided to set up her own outfit after six years in her husband's company, the eco-trend she spotted - which was already red-hot in Europe - had grown into a locally marketable concept that offered a platform for one of the most exciting companies that Singapore has to offer.

"Nobody talked about green in Singapore. Not at that time, eight years ago," recalled Chong. "I could see that there was an opportunity, so I actually worked with a few environmentally-friendly packaging suppliers (of materials)."

Instead of simply distributing the products - all 32 types of them - that her suppliers manufactured Chong decided that she needed to find a way to add value to the products.

The answer laid in innovative packaging solutions that utilises environmentally friendly raw materials, Chong pointed out: “There are plenty of green materials worldwide. Do we need to re-invent the wheel?

“So I decided to adopt a different way,” she said.

The unique eco-friendly materials that Greenpac uses today include sustainable pine Oriented Strand Board (OSB), which is processed and shipped from Europe in compliance with the international ISPM 15 programme, instead of relying on conventional heat treatment.

"We have got wood materials, paper materials. And all these are actually coming in from a special source, and are green label certified materials.”

While Chong is the official distributor for most of the imported materials she works with, she also has local suppliers who provide materials like plywood, and those who give Greenpac’s innovations physical form. 

Because of the steady stream of suppliers, Greenpac is free to concentrate on utilising the materials to sculpt unique solutions that cater specifically to customers’ needs.

Business by the bulk

While it may seem logical for most companies to work on solutions that save themselves money, Chong often works to find savings for others which in turns profits her business. That meant projects that were as varied as they were challenging, while being environmentally-friendly.

One of her first jobs involved an American computer components manufacturer that had been using conventional mixed hardwood pallets which had to go through heat treatment to remove contaminants like insects and fungi.

Rather than just meet the order, Chong took the extra step to convert the client from using hardwood, “we actually helped them to re-engineer (the process) to use plywood palette, which is alot lighter in weight.

"Every palette they (clients) save about 10kg, and the palettes are already in compliance with the ISPM 15 (programme).

Another company from the medical industry benefited from Chong’s ingenuity when she replaced their regular shipping method - of placing individual parts of a whole device into separate boxes - by combining all the parts into a carefully designed box, thus saving space and materials, resulting in dramatically reduced freight costs.

By reducing the overall weight and allowing for higher density with more products to be shipped, Chong gave her customer more freight savings apart from the solution they first approached her for.

Focusing on the industrial market has always been core for Chong because that is where the largest consumption of packaging can be found.

"For every equipment produced, you would get parts that need packaging, and I could see there was a lot of over-packaging, using much more materials than needed, or under-packaging which means they didn't actually do a proper job," Chong explained.

At the same time, she was realistic and practical.

"I didn't focus on one particular product and develop that product because Singapore is very small, and we don't have the economy of scale," she said.

When customers ask you to do something, and you tell them you have no time, eventually someone else will have time for them.

Chong also worked to grow her client list such that almost all are now Fortune 500 companies that require stringent processes to safeguard their valuable cargo.

"At the end of the day, because we are dealing with industrial products. You have to bring value, and that means you provide people with a solution that they would not pay more money for, while ensuring that at end of the day, they could achieve a green solution," Chong said. 

For her, coming up with green solutions, does not just mean using green materials. “Green has got a very wide definition. It depends on how you want to approach it. You have returnable, reusable, recyclable and things like that.

“So we actually look at solutions that reduce weight, or how to increase density. 

That means like a container, with the same footprint, you put 100, now you put 150. That means immediately you have a 50 per cent in savings,” Chong said.

So while this MD doesn’t start out with the goal of securing high returns when negotiating a deal, she still gets to close each contract with a tidy sum for her firm.

In addition, some of the green solutions that Greenpac have engineered from the ground up have won recognition, from the Asiastar Award by international non-profit organisation, the Worldstar Packaging Organisation (WPO), enabling Chong herself to win Singapore’s ASME Entrepreneur of the Year Award (EYA) in 2008.

Planting SEEDS from SPRING

"The solutions come in different forms. There are no hard and fast rules and that is why we have to innovate all the time" said Chong of her start-up which includes a five person team - that consists of designers and mechanical, chemical and structural engineers.

Before that multiple discipline team came along, it was just Chong and her assistant back in 2002 with a S$30,000 micro-loan from SPRING Singapore.

Applying for the micro-loan was a challenge for Chong who had never handled a business before, nor did she have the slightest clue on how to write a business proposal. Still, she was undeterred.

"When you go to SPRING, they would want to see your business proposal. So we actually knocked on SPRING's door and talked to their officer, and told him that we didn't know how to do it," Chong said.

Later, she was introduced to a consultant who offered to help secure the funds she needed easily, but he wanted one per cent of the sum that SPRING approved. "No thank you very much!" Chong said, recollecting the incident.

Eventually, by trial and error, with proposal after proposal being sent in, rejected and returned Chong and her assistant managed to come up with a business proposal.

"Of course it is not easy when we first started trying to do it," Chong said of the experience. "We have to convince them on our business model, and that this is the way to go."

With each written proposal getting more robust with each try, Chong eventually won acceptance from SPRING.

"I must say they have been very patient. They actually walked us through until finally we are there," Chong said.

Selling the ideal before the deal

"In business if you really have a good business idea, and you can't convince anybody then you probably may have to rethink your business proposal," said Chong.

After spending much time getting her plans off the drawing board and into the realm of business, the managing director found that her initial investment wasn’t just to roll off the business, pay for expenses, and fund R&D into innovative packaging solutions that utilises environmentally friendly raw materials.

"Because if you look at our business model it is not something which you can cut and paste. It is not like trading where I use the money to buy materials and just sell.”

A display of Greenpac's award winning innovations.

In fact, the first four years was spent mainly educating and sharing, than selling Chong explained. "You have to build the credentials, credibility, and you also have to spend on R&D, making sure you come up with something that convinces (clients)."

Most of those she approached at Greenpac’s initial stages refused to even meet up with her, because their extremely expensive and fragile products required expert handling.

It was also an issue of trust and a track record, with most used to dealing with those they had grown accustomed to.

While swimming against the tide, Chong decided to also invest her time working with the local representatives of multi-national corporations on packaging solutions while slowly penetrating the headquarters where the final corporate decisions are made.

Strategising meant that Chong was able to use the S$30,000 micro-loan to not only jump-start Greenpac, but grow at tremendous speeds through her clever use of financial factoring.

In 12 months, that helped the company, earning S$1.2million.

"It is one of the best ways to go," Chong said with a contented smile, as the company returned 100 per cent growth each year and in 2007, grew an astonishing 300 per cent.

"It means you have an invoice which you can use, and you go to the bank, the bank will probably fund you 80 per cent (of the amount stated in the invoice) that you can use it as your working capital."

Keeping an eye on the big picture and careful management of cashflow does have one drawback.

"I didn't draw salary for a long time," Chong said with a chuckle.

Getting new businesses to fuel the growing company was also hard for Chong, because of a  common misconception that being "green" means it will cost more.

"I wouldn't say that I am a 'green' person and all that," Chong said of her boardroom dealings.

“It all started with just a business opportunity," the quick-witted business woman said of how she usually pitched the "bottom-line savings" angle to capture the attention of anyone willing to listen, before following up with the "green" aspect of her solutions that opened up the door for the marketing team to spring into action.

"Also thinking in the long-term, why not? It gives alot of benefits to the environment, and it is also an emerging business," Chong said of her final trump card dealt in negotiations.

Business is brutal and Chong admits there are also some who take advantage of her free offers to get a carefully designed solution, only to commission their current suppliers to implement the same idea for them.

"But they soon realise that they can only do it one time. And after that they can't do it when they have new products coming in.

"It is good in the way that they can see the kind of value-adding and continuous improvement that we can bring to them. So they eventually end up coming back and becoming stuck to us," Chong said with her infectious laugh.

To provide the best solutions to her customers Chong also realised that she had to form strategic alliances with multiple suppliers to produce the best results.

"Trust and mutual understanding is very important… a win-win situation is the most important in any alliance. You can win all the way but in the end, nobody will want to play with you," Chong sagely concluded.

Reflection of self and doppelganger

While Chong worked to make other firms more efficient, she also had to look within her own organisation to make sure it was streamlined and had the necessary virtues needed to complement her partners. 

One of the cost saving methods which Chong everages heavily on, is information technology (IT).

"We have cut down alot of unnecessary manual work, by using IT to do all the data and transactions your monitoring is minimised."

To complement the IT employed, Chong who announced with pride that she has "a very lean team, and their output is 300-400 per cent”, invests readily in training and incentives.

"Incentives come in many forms, and money is just one of them. But promotions and career paths, and exposure, all these are also incentives because we grow together. All of them come from different backgrounds, but have one direction," Chong said.

Now that her efforts and investment into the company have paid off, a new and more disturbing challenge has emerged - imitators.

" I think, there must be something we are doing right. It's just like a (branded watch), if you see many imitations, there is a market demand. I think the industry could see there is a big potential in this business.

"We have the first mover's advantage, but they also have the potential to be second best. So now it depends on who is more efficient, but as of today, we are still the market leader and we innovated the whole industry," Chong said.

Fortunately for Chong, the innovation that Greenpac brought to the packaging industry was so profound that several of her competitors decided that the best way to get some much-needed market share was to work together with her instead of going head-to-head.

And because Greenpac is not involved in manufacturing, they won’t be limited to using a certain type of material, like some of their competitors.

Susan Chong with one of the bigger items that Greenpac provides solutions for.

"That's what you call leveraging on alliances and on your partner's strengths," Chong said with a benevolent smile that masks her formidable inner strength.

The result of the leveraging is evident in how the company managed to remain fairly resilient, despite the financial crisis of the not too distant past that affected her major clients who are mainly in the manufacturing sector.

"We are still making a profit because of our business model, we are a knowledge based company, and also asset light, and that actually pulled us through," Chong said.

"The business itself is a sustainable business, because all my assets are walking around. All my intellectual assets," Chong said with reference to her staff who weathered the economic storm together with her and contributed to the phenomenal growth of Greenpac.

In for the long run

Just like many other businesses who survived the economic crisis, Chong utilised the downturn to equip her firm with the necessary tools for expansion into overseas markets.

"There is a lot of demand out there. Most of the countries like Japan, UK, US, Korea and Taiwan, are moving into the 'green' space.

"It is really a growing industry because it used to be voluntary. Now it has become very much a policy issue, and now not only do they save money, but if they don't do it, they can't get their product across," Chong said in reference to non-compliance with international regulations like the ISPM 15 - which was initially started to deal with insect and fungal infestation in untreated materials.

Growing industry or not, Chong  is quick to caution young entrepreneurs who seek to replicate her success.

"Now business is quite tough, everyone wants to be their own boss, there are alot of young entrepreneurs and they don't have a business direction, and they just do whatever people are doing.

"I guess people have to be realistic. Because in business, there is alot of hard work.

"People always think that by doing their own business, they would have a lot of flexibility, which is not true. Success doesn't come overnight. You also have to make sure you are niche. You must find your niche, and not be a me-too company."

In order to ascertain if a business model is viable, Chong recommends budding entrepreneurs to ask themselves two questions: "Why must people buy from you? Why are you so special?

"If you can answer and convince yourself, then you can convince the customer. If you can't even convince yourself, then how can you convince other people?" Chong challenged.

And if and when success arrives, it could open the way to complacency, a pitfall that  Chong believes young entrepreneurs should look out "because other people might be able to do what you are doing, better than you,” she stressed.

"The only way to grow is to continue to innovate, understand your surroundings and be sensitive to your customer's requirements," the 2008 EYA Innovation winner went on to say, adding that once a business is complacent with success, arrogance will start to affect customer relations.

"When customers ask you to do something, and you tell them you have no time, eventually someone else will have time for them."

Suffice to say, Greenpac always has the time with Chong at the helm, so a projected 30 per cent growth in 2010 is a near done deal, neatly sorted in an eco-friendly package.