SME Spotlight

Joining forces to grow their businesses

Royal Bussan's Leslie Tan (far left) and Guoxin's Richard Foo have set up shop next to each other in Tampines.
Royal Bussan's Leslie Tan (left) and Guoxin's Richard Foo have set up shop next to each other in Tampines.ST PHOTO: CHEW SENG KIM

Two small firms use each other's expertise to widen customer base and profit margin

Guoxin Manufacturing and Royal Bussan Singapore are small local companies with different areas of expertise, but they knew years ago that they had to take on the world together if they were to keep growing.

Since striking a partnership about five years ago, the companies' bosses have had no regrets. In fact, they have signed up to lease adjacent spaces at JTC's latest industrial property, JTC Space @ Tampines North, to strengthen the partnership.

Royal Bussan specialises in making plastic moulding and cable harnesses while Guoxin is a tool-maker, producing machines and metal moulds.

At the beginning, Guoxin was supplying Royal Bussan with tools. But the managing directors of the companies struck up a friendship and saw that they could work together to achieve their shared ambitions.

"You cannot fight the war alone any more," said Royal Bussan managing director Leslie Tan. "For example, my company is too small to run its own toolroom. So if I have a client who needs specific tools, I can take on that job and sub-contract it to Guoxin."

Guoxin can take on customers who need plastic moulding and turn to Royal Bussan to do the job.

UNITED FRONT

A lot of small companies like ours are starting to phase out because costs are going up and competition is fierce. So with this partnership we aim to take our businesses to the next level. While we each have our own strategies, we can act as one entity.

GUOXIN MANAGING DIRECTOR RICHARD FOO

This way, each company is able to provide its clients with a wider range of products and services, without having to stump up the heavy costs of investing in its own machines or industrial space.

And this has allowed each to grow and expand into new markets. Two years ago, Guoxin began servicing aerospace clients while Royal Bussan started taking on jobs for the medical and military sectors.

"A lot of small companies like ours are starting to phase out because costs are going up and competition is fierce," said Guoxin managing director Richard Foo.

"So with this partnership, we aim to take our businesses to the next level. While we each have our own strategies, we can act as one entity."

By moving to adjacent spaces at JTC Space @ Tampines North, the companies stand to save transport costs and time, and customers will be able to see the combined services they offer all at the same place.

JTC products division director Ma Ping Nee noted this is the kind of collaboration that the industrial landlord wants to see more of.

"By co-locating in JTC Space @ Tampines North, Guoxin Manufacturing and Royal Bussan Singapore are able to strengthen their partnership, and offer new and better solutions for their global customers," she said. "We hope to encourage more of such co-location and collaborations, and grow an integrated advanced manufacturing cluster there."

A version of this article appeared in the print edition of The Straits Times on November 16, 2016, with the headline 'Joining forces to grow their businesses'. Print Edition | Subscribe