CELINE Teh, founder of building materials supplier Earth Arts, not only has a strong personal interest in stones but also a character that is just as strong and hardy.

The middle-aged divorcee has been playing dual roles as managing director of her fast-growing company and mother of three children, whom she put through university.

Ms Teh smiled while recalling her experience: 'I have always been a warrior. I still do not know how I managed to overcome this great challenge.'

Before establishing Earth Arts, Celine Teh had worked as a project manager at another stone materials and services supplier. She said that due to the fact that the company was a family business run by a pair of siblings, she found it hard to develop her career further past a certain point. That led to her decision to start her own business.

Thomas Tan, director at Earth Arts, said that stone materials may look like simple things at first but they actually require much knowledge.

As they are natural materials, their colours and textures are not dictated by humans and this will inevitably result in a discrepancy between what the customers expect and the actual materials.

It is not uncommon for customers to express dissatisfaction with their renovation works due to the fact that the colour of the stones did not match what they had requested. At this point, the materials supplier and the renovation company might point fingers at each other as the source of the problem.

Mr Tan is the eldest son of Ms Teh. He said that the stone materials industry used to be very disorganised in the past and materials suppliers and renovation contractors had each focused on their own separate tasks, leaving a large grey area between them. Therefore, such disputes were very common back then.

Ms Teh, a veteran in the stone materials industry, decided to form Earth Arts jointly with two renovation contractors to provide a comprehensive solution to avoid such kind of conflicts.

Mr Tan said: 'There has often been a communication gap between materials suppliers and renovation contractors. Earth Arts aims to eliminate this gap so that we can take full responsibility for the works and avoid the situation where materials suppliers and contractors point fingers at each other.'

Ms Teh established Earth Arts 11 years ago. The company started with three directors and two administrative staff. She encountered many challenges when Earth Arts was still a small company and needed to compete with many larger and more established competitors. The fact that the industry was traditionally dominated by men made it even harder for her.

However, with nearly 15 years of experience working in the industry, Ms Teh eventually won the confidence of many of her customers with her good relations with architects and her extensive knowledge of stone materials and renovation works.

The company now employs more than 60 staff, growing from a $100,000 investment into a business with an annual revenue of more than $8 million this year. Earth Arts has always aimed to provide outstanding service while keeping strict control over costs.

In order to reduce operating expenses, the company had used a 20-foot container as its office for close to 10 years. However, as its business continued to expand, Earth Arts moved out from its container office into a two-storey building earlier this year to give customers a better impression.

Moving from a container office to a factory building
Mr Tan sighed when talking about the old office: 'We installed an air-conditioner in the container. It was really a small office.'

'When we started securing contracts worth $5 million to $6 million, our customers started to have doubts over our ability to fulfil contractual commitments when they came to our office.'

Therefore, Earth Arts moved to a 40,000 square foot factory building located at Sungei Kadut Loop in January this year. The ground floor of the building boasts a showroom, and the company has a separate warehouse.

Ms Teh encountered challenges on all fronts in her journey in the building materials industry, eventually growing Earth Arts into a comprehensive supplier offering comprehensive services.

She decided to raise her three children on her own after she became divorced around 20 years ago. Her youngest daughter was 12 years old then and her eldest son Thomas was only 18.

Ms Teh spoke in an optimistic tone when recalling those difficult years and said she had to thank her company for the support it gave her, which allowed her to raise her three children. Her eldest son joined the company nine years ago and her second son is now working in the banking sector.

The stone materials industry has traditionally been male-dominated. Not only has Ms Teh found a foothold, she has successfully built up an established business in the industry. She admitted that the fact that the company she used to work for was also founded by a woman gave her much encouragement and inspiration.

The gloomy property market in 2002 had affected Earth Arts' business. Ms Teh said that the company was able to get through the crisis due to one or two major projects it had been given.

She said that the customers' ability to pay their debts became a problem for the company. She said that it was harder to collect payments from some customers, and this in turn contributed to problems with the company's cash flow.

The company has adopted the approach of asking for cash payments for its stone materials in order to maintain a healthy cash flow. In addition, having multiple concurrent projects also helps the company reduce its risks to a certain extent.

One can win only by ensuring that one does not lose
Mr Tan attributed the company's successful measures against economic crisis to a consistently prudent management. He said, 'Ours is a relatively conservative company. We emphasise not on winning, but on not losing. One has to ensure one does not lose in order to win.'

As some developers have postponed their projects indefinitely, Earth Arts has been careful not to over-commit too much resources to any single project.

Although Earth Arts has not been immune to the economic downturn, Mr Tan said that retrenchments and pay cuts are not on the company's agenda. Quite the opposite, its employees were given pay raises and bonuses last year.

He noted that the industry itself is Earth Arts' biggest challenge. He said: 'The internet has made it easy for customers to find stone building materials. Logically, other companies can also offer the services that we offer.'

Earth Arts' edge is that it provides added value to its customers, guaranteeing a high level of service, including the quality of its materials, its internal management as well as efficiency in the completion of works.

He also stated that Singapore is the most difficult market to operate in compared to overseas markets. Local architects and designers tend to put pressure on suppliers to satisfy their clients, even when certain features of stone materials cannot be altered.

Comparatively, European and American clients will usually accept these natural characteristics, including disparity in colours.

Last year, Earth Arts saw a decline of 16% in its annual revenue to $8.09 million; its net profit remained the same as that of 2007, at $430,000. The company has been involved in diverse projects, including Changi Airport Terminal Three, Dhoby Ghaut MRT station, and the SMU campus. Currently, it is participating in the Marina Bay Financial Centre and the Straits Trading Building projects.

It counts among its clients Kajima Overseas Asia, Obayashi Corporation, and Shimizu Corporation.

From its name, Earth Arts appears at first glance as a company involved in fine arts. To this, Mr Tan said, 'We can easily associate the material's natural characteristics to art. The stones you buy are not mere commodities. They are part of the nature.'

Ensuring healthy cash-flow
Like many other companies struggling in the economic downturn, Earth Arts has encountered problems like delayed payment from its clients and tight cash-flow. What is the key to maintain a healthy cash-flow?

Ms Tan Siew Meng, Head of Commercial Banking at HSBC Singapore, pointed out that cash-flow management is not just about having clients pay on time. Enterprises should also adopt the following strategies.

1, Optimise inventory: Bloated inventory will hog the company's resources. Review inventory levels and cooperate with suppliers to ensure the company only procures materials it can sell.

2, Manage working capital: Credit and payment terms with customers and suppliers must be carefully reviewed.

3, Put as high priority recovery of bad debts: Strengthen efforts to recover bad debts. The company can put a person in charge or outsource the function to banks.

4, If the situation allows, use Letters of Credit

5, Seek credit protection: This will offset the risks of breach of contract and bankruptcy.

6, Leverage on government financial schemes: For example, the Bridging Loan Programme.

Small and medium importers and exporters such as Earth Arts often deal in products that are easily accessible elsewhere. How do they stand out among the competitors, which include larger companies?

Dr Tan Khay Boon, head of the Management Studies programme at UniSIM stressed that it is important for such SMEs to offer unique services. These include punctual delivery, on-time payment to suppliers, and high quality internal management, all of which will create a good reputation necessary to earn their clients' favour.

He said that unlike the larger companies, SMEs should focus on niche markets and provide high performance-to-cost services.