United Global pursues regional ambitions

Mr Jacky Tan's United Global group supplies lubricant products to the automotive, industrial and marine sectors.
Mr Jacky Tan's United Global group supplies lubricant products to the automotive, industrial and marine sectors.

For lubricant specialist Jacky Tan, "listen to your heart" and "go with your gut" are his key axioms, seeded by his father's counsel more than four decades ago.

"I asked my dad for advice when I started working, and he told me... to be cautious," recalled the chief executive officer of Singapore Exchange-listed lubricant manufacturer and trader United Global.

"In my younger years, I took it literally, always focusing on the facts, figures and details. It was only much later that I realised what he was really referring to - I had overlooked the softer side of business transactions, which are human connections between people."

This is crucial for deals and alliances. "You may be looking at absolutely fantastic numbers and huge profits at the beginning, but if somewhere down the road you can't work with your chosen associate or partner and the joint venture collapses, you end up with nothing," said the 55-year-old.

The University of Canberra graduate, who has a Bachelor of Applied Science in Building, spent eight years with two Indonesian mining and quarrying companies before moving to Singapore when racially motivated riots erupted in Indonesia in May 1998.

Given his background in the mining industry - which consumed container loads of oils, greases and fluids for heavy equipment every month - Mr Tan decided to enter the lubricants business. With his wife and father-in-law, he founded United Oil Company in 1999.

"We started as a small player in the market, and very few people knew who we were. For the business to break even, we needed to manufacture and sell at least 50 container loads of lubricant oils every month," he said.

This meant reaching out to potential customers through a dizzying number of cold calls. "We were on the phone constantly, persuading potential clients, negotiating prices, dealing with rejections - that was our lowest point."

Slowly, things turned around.

"Once customers realised that we strived to give them the best value and quality in terms of our products, and always delivered what we promised, the business took off," he recalled.

"We created a reputation for ourselves as a reliable supplier, one that isn't greedy, but fair in terms of pricing."

Mr Tan's make-or-break attitude also played a role. "If we think that something is worth doing, then we 'die-die must try' our best to make it work," he said.

He also dreamt of listing the company and diversifying its focus beyond lubricants.

Thus, United Global - with United Oil Company, United Innovations Company and United Renewables Company as subsidiaries - was born.

United Global was listed on the Singapore Exchange's Catalist board in July 2016.

The group provides a wide range of lubricant products under in-house brands, as well as lubricants for third-party brands. It is also involved in the trading of base oils, additives and lubricants. With a network of distributors spanning more than 30 territories, United Global supplies lubricant products to the automotive, industrial and marine sectors.

An ISO 9001-certified company, the group has a blending capacity of 60,000 tonnes a year in Singapore and 80,000 tonnes in Indonesia.

United Global plans to expand its existing lubricants business organically in the region, focusing on in-house brands and through partnerships. It is also actively seeking to diversify revenue streams.

The partnerships include its 2017 venture with Japan's M-TechX Group to make oil-absorbing, nano-fibre materials for industrial and commercial applications. Other collaborations involve the marketing and distribution of the group's lubricant products in Australia, China and Myanmar. And, last September, Madrid-listed oil major Repsol acquired a 40 per cent stake in Mr Tan's United Oil Company subsidiary for up to US$46.5 million (S$66 million).

Today, United Global has a market value of more than $140 million, compared with $70 million when it listed in 2016.

Meanwhile, challenges abound, including the Covid-19 pandemic.

"Our supply chain has been impacted - we haven't been able to deliver our fuel products to China over the past few weeks, and are seeing very slow sales there, as well as in Taiwan and Hong Kong," he said.

"Although sales volumes have fallen by about 10 per cent to 15 per cent, orders are still trickling in," he added.

"Given our geographical footprint in the Asia-Pacific, I reckon our risks are fairly well spread out."

• This is an excerpt from Singapore Exchange's Kopi-C: The Company Brew, a column featuring C-level executives of SGX-listed firms. Previous editions are on SGX's website www.sgx.com/research

A version of this article appeared in the print edition of The Straits Times on April 20, 2020, with the headline 'United Global pursues regional ambitions'. Print Edition | Subscribe