SINGAPORE (Aug 23): Hong Kong Disneyland wants to be the island’s biggest producer of solar power, and is installing an expanse of solar cells the size of a football field on the rooftops of its buildings to yield 1.86 megawatt-hours of electricity per year. This is equivalent to the annual electricity consumption of 564 households, and 70% more than the next-biggest solar power site in Hong Kong. The Edge Singapore understands that the global theme park operator has picked New Energy Financing and Consulting Group, a bespoke solar power start-up, to set up its solar power system.
NEFIN started life as an underdog in the solar energy business, which is dominated by global brand names. The Hong Kong-based start-up designs and builds tailored solar power solutions for commercial and industrial property owners. Its bespoke setups have helped it garner a long list of large clients such as German technology group Bosch, Cathay Pacific Cargo in Hong Kong and California-headquartered Intel.
Now, its co-founder, Singapore-born Glenn Lim, is harbouring plans to set up an office in Singapore as a base from which to expand in Southeast Asia. NEFIN is also raising its first round of Series-A funding worth about US$150 million ($208 million), slated for completion by year-end.
Courted over
By any standard, NEFIN is the sort of success story that Singapore pushes for. Lim, 46, formerly global sales director at US chemical conglomerate DuPont, got together with his colleague Eric Leung, who was DuPont’s regional business development manager, to found the start-up in 2015.
As Lim tells it, they sold their homes and cars, accumulating about HK$2 million to start NEFIN. He was keen to set up shop in Singapore. After all, his team at DuPont had previously worked with the Economic Development Board to install a solar panel system in Changi Airport several years ago.
The Hong Kong government took an interest in the start-up, courting Lim with free office space, grants and other incentives. This was a time when Hong Kong was aggressively pushing industries to use clean energy and a small solar developer such as NEFIN could grow quickly in the market. The start-up is currently incubated by the Hong Kong Science and Technology Park. It also has a joint venture with Hong Kong-based real estate developer Sun Hung Kai Properties and a strategic partnership with DuPont.
The early boost allowed the company to grow quickly. NEFIN has about 50 clients today and delivered more than 150MW of solar projects across Taiwan, China, Hong Kong and Malaysia. Lim says NEFIN’s revenue is in the millions and the company grew 17-fold last year.
“NEFIN adopts a surgical method of doing things and we come up with a highly customised plan for each company — sort of like a tailored suit that fits each one exactly. This gives us an edge over our competitors, enabling us to win many contracts,” he explains.
Its tailored solutions have helped NEFIN score a deal with global chipmaker Intel to cover the roof of its manufacturing plant in Malaysia with solar panels in 2017. Last year, Intel approached the firm again, this time to build solar panels on its Shanghai facility, which was much larger.
The company picks only those companies that have high-value assets to work with. “We are less focused on companies that deal with low-value assets such as fast-moving consumer goods (FMCGs), because their general factory investments tend to be low and they can cease operations anytime,” Lim says.
Conversely, companies that have factory roofs with high-value assets, such as those in the semiconductor, aviation and automotive industries, tend to have high safety standards, which will ensure longer-term business relations for NEFIN.
The start-up typically owns the solar panels on the customers’ premises. The clients also do not have to pay an upfront cost, but just the cost of electricity generated. Contract terms can stretch up to 25 years. Today, NEFIN is worth US$8 million, based on its operating cash flow.
Serial entrepreneur
NEFIN is not Lim’s first rodeo. In fact, he has run a number of businesses to varying degrees of success in the past. A large part of his motivation lies in his desire not to rely on his parents, who have a modest but successful vegetable wholesale business.
As the eldest child, he was expected by family and friends to take over the business. But the engineering graduate had other plans in mind. In 1999, Lim started a company with two fellow alumni from the National University of Singapore, selling computer systems to businesses such as boutique hotels in the country. The ragtag team eventually had to end the venture because of insufficient manpower and profits as a result of a poor business model.
A year before NEFIN was set up, Lim developed a mobile application for customers to virtually test cosmetic products — what cosmetics retail giant Sephora has today is a similar iteration of his idea. Back then, he says, there was little demand for such a platform and the project ended quickly.
Lure of Southeast Asian
Once NEFIN’s new Singapore office is set up, Lim hopes to scale its business quickly across four other countries in Southeast Asia. In recent years, Thailand and Myanmar have invested heavily in renewables and solar farms are just starting up in the markets.
NEFIN has signed a joint venture with the largest oil and gas company in Malaysia. Lim says this venture will grant NEFIN easy access to future government projects. It also recently signed a JV with an airline company in Southeast Asia, in a deal worth US$26 million, to look into solar projects across the region.
NEFIN is using Singapore as a base to tap into solar power opportunities in the region. Lim has little interest in fighting for a share in the Singapore electricity market, rife as it is with competition.
“We don’t want to touch the Singapore market because it’s just too competitive and risky, not huge by itself, and normally we get encouraged to do business outside of Singapore,” says Lim. NEFIN is in talks with a local leading energy development group about a potential collaboration.
Lim’s move to Singapore comes after Senior Minister of State for Trade and Industry and Education, Chee Hong Tat, and 11 other delegates met the start-up in Hong Kong in 2018, where theyspoke about the possibility of relocating to Singapore.
His decision to move back to Singapore also coincides with rising tensions in Hong Kong. The city has been rocked by anti-government protests for weeks, and the mainland Chinese authorities have signalled action, which could escalate the situation. Indeed, amid the unrest, Lim says potential investors have asked him to consider relocating to Singapore.
He notes that the city state is a good place to set up an R&D centre, owing to the ability to attract talent. “We tried to get them (the talent) to move to Hong Kong, but this was not easy. Even with the Hong Kong government’s offer to pay them more, this was impossible,” he explains. “Singapore attracts talent better, owing to its stability and position as Asia-Pacific’s tech hub.” For instance, when NEFIN offered a potential employee a US$130,000 annual salary, more established competitors jumped in to offer him more than US$200,000, which the start-up was unable to match.
“Let’s be realistic. We are a start-up that cannot afford to pay in the millions,” Lim says. “We find that the talent in Singapore is easier to manage because there are fewer competitors here compared to countries like Hong Kong, and that’s the main reason we’re moving the holding company back to Singapore.”
