John Cheng’s family has built its fortune selling sugar in Singapore. He now has bigger ambitions.
SINGAPORE (Aug 16): As director of a successful business with an annual turnover of about $100 million, John Cheng appears to be living the life that most millennials desire. And the 37-year-old, who co-owns Cheng Yew Heng — Singapore’s only sugar manufacturer — does have a sweet story to tell.
The history of Cheng Yew Heng dates back to 1947, when Cheng’s grandfather, a former pineapple trader from China, decided to enter the sugar manufacturing trade. “It was a booming time for Singapore,” muses Cheng, adding that his father joined his grandfather soon after, as more hands were needed to cope with the high demand.
Since then, the business has grown significantly. It is responsible for the red jaggery savoured with traditional local fare such as putu mayam and the black jaggery added to enhance the flavours in prawn noodles and bak kut teh. Jaggery is unrefined sugar made from boiling raw sugarcane concentrate. The company also manufactures rock sugar, used in Chinese desserts.
Cheng, who co-owns the company with his two older brothers, recounts that his ascendancy did not happen overnight. “I have been involved in the business since I was a small boy. When I was in primary school, I would sweep and mop the floor and serve tea. I later graduated to fixing computers during my holidays while in Junior College,” he tells The Edge Singapore.
“During the school holidays, I could not go out and play like the other kids. I would follow my father to the wet markets and the distribution centres to give out the sugar and collect payment.”
Yet, Cheng also acknowledges that he started off knowing very little about the business when he joined, despite being so involved in his childhood. “I didn’t know what the business was until I got more involved in the day-to-day operations and decisionmaking.”
Cheng took a break from the family business after landing a coveted position in a bank. He returned to the fold in 2008, however, shortly before his father passed away. Then, he was tasked to protect the legacy of the 72-year-old company, whose name can be translated as “prosperity for the Cheng family, its friends and business partners”.
Being the boss
The initial days were not easy, says Cheng, who “had a culture shock” because of how different things were from the regimented operations in a bank. His first order of business was to incorporate a system to improve the daily operations, particularly in the areas of human resources and finance.
“The organisation chart was quite flat. So, whenever a worker needed to take time off, he would just go to my father and say, ‘Boss, I need to go somewhere, so I won’t be coming to work,’ and everything will be in my father’s head,” says Cheng. “This was a bit strange to me because, in a bank, we talk about business continuum.”
He then drew up an actual organisation chart and assigned titles such as “supervisor” and “manager” to ensure a more seamless workflow.
He also introduced stronger book-keeping practices for checks and balances in the company’s funds. His father had treated his employees like members of his own family, and operated based on trust. And while this motivated employees to give their best, it also allowed for the misappropriation of the company’s funds by one of its accountants, he says. After that experience, the younger Cheng felt that a proper system was needed to ensure accuracy and honesty in the reporting and usage of company funds.
On the factory floor, Cheng standardised the production process for rock sugar, after realising that it tasted different when mixed by different chefs. He obtained modern certification such as the Hazard Analysis and Critical Control Points (HACCP) and, later, an ISO 22000 for food safety to strengthen the company’s credibility.
Looking back, Cheng says it has been an arduous journey. “It was about changing mindsets; it took me nearly five years to persuade the employees to understand that change was necessary and to put their trust in me. I tried to win them over by showing them my capabilities in mini projects.”
These changes have produced results for Cheng Yew Heng. The company previously dealt only with distributors, but now sells directly sell to consumers. It has also collaborated with several major companies to make its sugar products more attractive to consumers. One such collaboration is with Clipper Tea in 2016 for the creation of Jewels — a collection of five flavoured rock sugar sticks that can be stirred into five complementary teas.
Giving back
Being a third-generation business leader, Cheng believes in helping budding entrepreneurs by passing on some of the training he received from his father. He spends his time grooming food start-ups through Innovate 360 — the incubator arm of Cheng Yew Heng.
He currently advises seven companies, each focused on developing a sustainable food item. He has also given them a space in his 90,000 sq ft facility, where they work out of a shared kitchen and co-working space. So far, he has invested about $70,000 in these start-ups.
“We want to groom young people so that they have the skills and funding to pursue their dreams and goals of [producing] food through sustainable practices,” says Cheng. He adds that the collaborative atmosphere of a co-working space allows for the exchange of good ideas that the food industry will benefit from.
In line with this aim, Cheng is part of Feed 9 Billion (F9B), an initiative aimed at reducing poverty in Asia by making food more accessible to the 9.8 billion impoverished people expected by 2050. He is working alongside the Singapore Institute of Management, Temasek Polytechnic and venture capitalist FocusTech Ventures in this project, which follows the United Nations’ prediction that the current methods of producing, distributing and consuming food are not sustainable.
Cheng believes the gap can be bridged through the innovation of agile and fast-paced start-ups. He adds that Singapore’s growing F&B industry — which contributed $14.4 billion to its GDP in 2017, of which $4.3 billion was from food manufacturing — has much potential to use innovation to prevent imminent global food shortage.
The company also has tie-ups with educational institutions to develop better sugar-based products. Its partners include the Institute for Technical Education, Singapore Polytechnic and the National University of Singapore as well as research bodies such as the Agency for Science Technology and Research (A*STAR).
On a macro level, Cheng says his interaction with fellow entrepreneurs has helped him garner new ideas for the company. To him, the value of the entrepreneurial scene in Singapore lies in its ability to attract business and talent. He sees the development of the local food industry as of particular importance — to help feed the world’s nine billion people.
