Tat Hong eyes further expansion into overseas markets

Tuesday February 7, 10:17 PM


SINGAPORE : Crane company Tat Hong Holdings is reaching out into markets in China, the Middle East and Indonesia.

It is aiming to build on a strategy that has helped the company extend its presence over the last 30 some years, with offices from Australia to Vietnam.

But getting there hasn't been easy.

It had to overcome problems like assimilating foreign cultures and getting the right local people to run its network.

If there is one thing that differentiates crane company Tat Hong, it is the ability to claw a niche for itself in an industry dominated by big foreign boys.

Today, the small homegrown Singapore firm has taken the No. 1 spot in the world crawler crane business, despite having a market cap of only just S$370 million.

Tat Hong is already in 14 cities, and now wants to expand further into China, the Middle East and Indonesia.

"Market sentiment is good for the next few years and there is a lot of infrastructure projects coming out in this part of the world. So I think we can tap on to this economic growth and expand overseas more rapidly within the next few years," said Roland Ng, chief executive of Tat Hong Holdings.

About 75% of Tat Hong's turnover comes from overseas, and it wants this contribution to grow to 85% within the next two years.

The firm was founded in the 1960s by Ng Chwee Cheng, father of the current CEO, Roland Ng.

When Singapore's housing and construction market took off in the 1970s, Ng senior saw the potential in the heavy equipment business.

But instead of trying to compete with giants like Caterpillar or Komatsu, he decided to specialise in the less crowded and lower capital-intensive crane business.

And the strategy has certainly paid off.

But making the right decision to specialise and choosing the right niche to move into are not enough to ensure success.

According to Roland Ng, being able to overcome competition wherever you set up shop is also crucial.

And to do that, getting the right local staff for your overseas branches is all-important.

"It's always a problem - getting the right people to run the operation. Because sometimes, we don't understand the overseas culture," said Roland Ng.

"So we need to get the local people who understand the culture to run the show. There will always be a risk that we might get the wrong people to run the show and get into problems," he said.

Tat Hong was listed on the Australian stock exchange in 1996 and on the Singapore bourse in 2000.

- CNA /ls

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