Laksania's uphill struggle against rising costs

Madam Sim (left) and Ms Tay at the Bugis+ outlet of Laksania. They have offered Groupon promotions this month.
Madam Sim (left) and Ms Tay at the Bugis+ outlet of Laksania. They have offered Groupon promotions this month.ST PHOTO: LAU FOOK KONG

One of Singapore's first food and beverage social enterprises may have to shut its kitchens for good after facing a host of financial troubles recently.

Founder Sim Sin Sin has poured her life savings into Laksania. Now she fears that her staff - 60 per cent of whom have mental or physical disabilities - may soon be out of work.

In March, she sold her family's landed property in Upper Thomson to keep the ailing business afloat, bringing the amount that has gone into keeping Laksania alive to over $2 million.

The 52-year-old now lives in a rented house with her family. Madam Sim also stepped down as chief executive officer of cafe chain Secret Recipe earlier this year to focus on her social enterprise.

Laksania started as a tiny kitchen in the Institute of Mental Health (IMH) in 2008, providing work therapy for outpatients keen to join the F&B industry upon recovery.

Now it works with organisations such as the Movement for the Intellectually Disabled (Minds), hiring a wide spectrum of people with disabilities to help make laksa pastes from scratch in its central kitchen.

They are also employed in Laksania's three cafes - the latest of which opened in the Jem mall this June.

Madam Sim's mantra is to "focus on the workers' capabilities instead of disabilities", and Laksania has trained over 200 disabled employees since 2008.

But the past few years have been tough.

Late last year, it unexpectedly lost the tender for its kitchen space in IMH and had to squeeze its central kitchen into its East Coast Road cafe.

"It was a big blow to us," recalled Ms Tay Su Yin, Madam Sim's daughter and the director of Laksania.

"We lost our kitchen space at the point where we were about to expand. We'd opened a new branch, we were ready to grow, but problems started coming."

Laksania only managed to find a dedicated central kitchen space in Kampong Ampat this August but the rent was a steep increase from its old premises in IMH.

Ms Tay thought a new outlet in Jem would help draw in crowds of shoppers. In the first month, it raked in a promising $70,000. But in September, the store was forced to close for two weeks after the mall's first-floor ceiling collapsed. Since then, its monthly sales have fallen to about $40,000.

"Escalating costs and the loss in revenue make this the hardest year yet," said Ms Tay.

In yet another blow, it had to shut down its East Coast outlet earlier this month due to poor sales.

If the situation does not improve, Ms Tay predicts the end could come in a couple of months.

She is, however, looking into measures to help the social enterprise turn itself around by improving marketing and advertising efforts.

Laksania has offered Groupon promotions this month and is now looking for investors - but it is an uphill struggle.

"Our books are in such huge reds that anyone looking at them would frown and think, 'Why throw away good money to chase after bad money?'" lamented Ms Tay.

"We need investors who believe in our cause and share our vision."

asyiqins@sph.com.sg