Insights on PVC Pipe Manufacturing

it is with great pleasure uh and enthusiasm that we welcome Mr and okay to our lecture and sharing session today now Mr Andy uh is um not only an accomplished entrepreneur but uh also an industrial speaker uh whose insights will undoubtedly enrich uh your understanding of the Practical aspects of your studies okay so we are also honored to have associate professor Dr CH uh from Chun the head of school for the faculty of um business and also um also sh as the teaching assistant with us you know as a guest as guest listeners during this uh sharing session okay so today we have the privilege of learning from Mr Andy who is the owner of a PVC pipe manufacturing um company in sinka all right uh his extensive experience and knowledge in the field will shed light uh on the intricate world of manufacturing uh and its significance particularly in the context of your final assessment which is the portfolio uh which you are currently and going to uh you know be working on later so as we listen to Mr Andy's presentation about his company and also about his uh the products um I encourage you all to be actively uh engaged and do take this um opportunity to gain valuable insights from him uh his expertise will undoubtedly provide us with a fresh perspective uh and Inspire to excel in your academic uh Pursuits okay so without further Ado um I invite Mr Andy to share his knowledge and experiences with us so the floor is yours Mr Andy [Music] class class it's better um sorry for the MK on um I having s so I think I fig it's better for me to put on the m to keep it to myself all the um so [Music] um okay my name is Andy um the company that I'll be presenting is centr point industri is it's a company currently operating in uh it was established since uh November 24th probably 11 year anniversary uh so our business is manufacturing PBC 5 we only do one thing PVC 5 so that's the sample yeah catch um so I am the general manager so I'm currently actively running the company and of course we have a few other partners um together so um this is some of the uh products that we have um uh the one passing around there is PVC pipes I think it's very familiar to you guys you can find it under your uh washing Bine uh your toilet uh setic uh pipes uh rain water when the raining you know uh the water will be channed through your roof into the pipes that's the pipes into the drain so it's a very common use pipes um uh in the market uh some people they use it for all kind of things even the hydroponic use that pipe to drill a hole and then you plant the um vegetable whatever it's the same thing so so this pipes are they have different thickness and diameter okay so the one that has been passing around is 4 in so we we we do have 6 in 3 in 2 in 1.5 and so on so any any pip that is smaller than 1.5 we call cond uh condu will be the one that is running the electricity cable okay so this one the the bigger one usually they use to run water okay so those are non pressure water so this another type of pipes where we run pressure water inside when you turn on the tab you you see the water flowing out from the T there is pressure water so this one the one that we have been producing is the drain water that means is non pressure so so that means the expectation is not so high pressure water uh the the thickness has to be thick so that uh the pipe will not burst okay burst especially in the middle of the night when everybody is sleeping the pressure is very high in the pipes so the the pipes has to be able to sustain that pressure this one is a drain water okay so the expectation is not that high so we have 1.6 mm thickness 1.8 2.1 2.4 and 3.2 um so those are the photo how how we stack the pipes in the factory and this how it look like um so this is how the machine look like um so this is the front part and this is the back part uh so this is where the raw material come in uh and you go into the hopper and go to the screw conveyor get the hopper and get into the uh barel this is a mall so so the mall is hot so when this raw material in the form of powder they get to the mall it will melt then so this is where it come out and then you get into the cooling chamber it get spray by the water and then uh after that this is a holler where you pull the Harden pipes this is a cutter he cut the pipes in length and then this is a ster so this is uh uh summary how the PIP is being produced um it's not easy but if you do it every day become very easy okay so these are our suppliers our we have um our raw material is divided into two the major raw material and the minor raw material so the major raw material uh comes from Thailand Korea and China so we choose based on pricing so whichever they offer cheaper we will buy from that um and another one is filler filler is um we still technical is fer okay so we get the the fer is calcium carbonate calcium carbonate is actually a stone like the stone that you found on the on the road side what's the difference between the stone you found the road side and the stone that we use the that we use is very fine they grind very very fine like powder like powder very fine like Meo okay those kind of finers um so we use this we use this PVC raisin and Feer a lot and then of course we have the minor raw material mainly come from China and West Malaysia we have rant heat stabilizer and antiuv rant stabilizer is very essential during the manufacturing time so that means um when the raw material get into the machines the lubricant and heat stabilizer will function okay will do it work and another one is anv so some sometimes you will ask how long will this P this P will last okay um because sun has UV so if this pipe get under the sun the U the UV will break down the pipes and the price will will be will get very what you call um rle rle is okay so the pipe will break so when we put in antiuv we actually um like a sun block we put on sun block anv so we also have uh so this antiuv is a type of chemical we call inide to protect the pipes so a pipes with UV maybe last for 10 years a pipes sorry a pipe without UV anti UV probably will last for 10 years a pipe with anti UV inside inside it it probably last for 30 years 40 years uh maybe 100 years okay so um so that's why um the pipes that um Buri inside the ground will last for a very long time um it doesn't degrade uh of course and the next one is the suppliers for machine and spare parts so our machine is a Chinese machine so of course all the SP parts that we get are from China um so um Malaysia is a ex British colony so we use British standards right BS so sering uh and a lot of our spare parts are actually uh Bri standards and China is using American Standard so British standard and American Standard is different so that's why when we buy the machine from China we only can get from China or unless we get SP from United States which is super expensive so we stick back to China we cannot buy SP from any other country because China is using American Standard okay so next slide is the Plastic industry players um in our industry um in kuchin or in Sarawak um this uh type of factory is very small in number so um very seldom we uh compete head on okay just like Coke and so or maybe Coke pepy Cola and Coca-Cola is head on competition uh for us it's like not that much okay you can hear a lot of plastic company in Kuching but most of the company are producing different type of plastic products okay so let's say uh we have West Malaysia we have this resing Tech uh they they produce U Ro block if you see the Pono construction you see the red color and white color plastic block at the Rock side to guide you through produced by ring P I think maybe 70% um they also produce uh this uh blue water tank okay blue water tank um you know uh during U na razak was prime minister last time they had this they give out a lot of this Su Malaysia tank okay the blue color tank okay those are plastic tank so this plastic tank is actually produced by w s so if you see on the road side this big GL only Carry Three tanks so those are the plastic tanks so all all those are in the same uh industry okay Plastic industry uh of course we have ch Vina plastic those are our industrial player from West Malaysia in SAR we have waa of course um po Flor these two are in this one I think is [Music] around and Cas plastic is our uh biggest competitor and they has close last year another one is for new so they produce uh different type of pipes like but I say just now um pressure pipe and non pressure or pressure application non pressure application uh water tank Rock block and uh those are the common products that we use S of course U uh last two years ago um our government uh planning to build solar farm okay solar farm on the water okay not solar farm on the ground on the water so when they they build a solar F they need a float to place the solar panel so the float is actually uh made of plastic uh it's the same material that uh it's the same material that they use to produce uh Rock block at the Rock side okay anyway just for your info okay so of course we have oversea industrial player from Korea Taiwan and China and uh the the competition from overseas Market is very small because uh in the nature of the product okay say let's say for example the the tank the water tank one super big L can only carry maybe about three to four water tank okay one water tank probably about 10 kilo raw material so four water tank only needs about 40 kilo of raw material right so um how could they produce a tank in Taiwan and bring to Kain the the shipping cost will be super expensive so they might well ship 10 kilo of raw material to Kin we produce here so that is the the barer of Entry is there okay uh it's very difficult for overseas competitor to come in but they do come and invest okay they Jo man the locker player they set up a machine here and they bring their raw material inside and we produce here locally so um the better of Entry is also one of the reason why we can we started the this company because we figure that uh this parts that you passing around is it's very Bing so the the shipping is very difficult um it take long time okay so that's why we we produce here and we can survive uh long time because the the the shape of the product itself okay the bers of the product causing the West Malaysia competitor very hard to come in the overse competitor very hard to come into the market okay I already explained it just now uh Malaysia is ex British colony so we are using British standard so whichever uh country that whichever country we go we pl in the pipes okay use if you go to um non Commonwealth country then certain adjustment need to be made it's the same thing like if you if you travel to China your your laptop charger or your handphone charger you you cannot plug in because the voltage is different the the socket is also different uh because of the different standard uh that they adopting okay next macro and micro environmental Factor so um Manufacturing of PVC pipes actually involves a lot of factor it's very complicated it's very complicated and being affected by a lot of factor okay the first one and the Very obvious one is exchange rate so um we buy raw material from Thailand from China we we are paying with US dollar okay so that means we have to buy the US dollar and then we pay and then the supplier s has to sell the US dollar and buy their own currency so how many times change two times right bring it to US dollar US dollar to taian or bring it to US dollar then US dollar to ring be China Chinese currency so uh so now we are actually in the top of our China counterpart to pay in ring B because there I think China and India they set up a uh a group called bricks is it correct I can't remember I think bricks so um with so the country is trading within their bricks they are using rooming be they are no longer they are trying to dit US dollar all this happened because uh when the US under Donald Trump time they have tread war with China so this is the result of the trade war with China brecks so of course for us as a as a buyer okay as aaser we buy raw material from China we P ring be we we only change from ring to ring be so we only lost one time R uh lost rugi okay lost one time so when ring getting weaker um our product or we pay more each time because we buy in container okay one container is 18 metric time so as ring getting weaker we pay higher amount in R each time okay last time uh during the before Co time one container probably about 60 70,000 R um now can go up to 100,000 per container so 30,000 more so of course um how what do we do with that we pass down the cost okay so that's why the C is getting more expensive so when the C is getting more expensive the house that you are going to buy is getting more expensive so so when house you buy get more expensive that means you guys are asking for higher salary so that you can afford so it's all come in circle anyway that's the another topic okay second one is raw material unit price so uh apart from exchange rate or or the raw material price affected by US dollar also affected by the unit price okay um so um our raw material price is the PVC raising that we use is a by product of oil oil and gas um refiner okay so from the crw oil uh we get crw oil under the ground and then they will produce petrol and then some portion will produce diesel some portion will produce gas some portion will produce um car that will build the road and some portion will be used to produce PVC racing that we're using today so that means when the crw oil price up our unit price will go up okay so when there uh uh last year during the Russian and Ukraine war When U and uh the oil production getting affected because Russia is one of the second or third largest oil exporter in the world right so and then us boycot Russia so once they boycott the oil price go up so our raw material price also go up so it's so when we have two Factor US dollar and unit price the our costing become very complicated okay the next one is shipping availability big time uh and po effect Shipping schedule so um this like what happened um about 3 weeks ago okay I think in China they celebrate National Day har kab I think on 1 of October right and they celebrate for one week China is different okay once they have this kind of China is the communist country Okay so when they celebrate Chinese New Year they celebrate for 15 days straight not like us here we celebrate for 3 days and a lot of other company will start operating China is not they have new year they go one 15 days or some go one week national holiday is the second largest event in the country so a lot of them will B comp and now the the national day will last for a week so we make a payment before the national day and some say they cannot shoot because national day so we waited for after National day for shipping and after the national day they tell me they cannot get the ship because the ship are fully booked because all the order uh has been waiting since the before the national day so shipping availability has become an issue because why um because when we buy the raw material we buy once a month okay so when we miss the timing we cannot buy anymore we have to buy next month okay so this is the pattern of our purchase um in this industry in this so that's why um shipping avability is very important Le time uh holiday Shipping schedule and all that and of course limited Supply uh limited allocation by suppliers so I'm um I must say that in our industry we are seller Market what does it mean by seller Market do you see when iPhone uh new version coming out people are lining up to buy right so and and the iPhone will will determine okay this new version iPhone cost 5,000 R they fix the price this a seller market so people will just R because they want the brand so for us it's pretty much the same seller Market that means u customer come to us okay we we hardly buy so it's as in the same way with buy material is also the same we have to taste after our supplier to buy supplier will not come to us hey you want not we have this have promo them they just tell you the price and they will not follow up with you if you want you call it immediately and lock in the order if you wait for one day two day har stock noral stock that's it you need to wait for next month so when because when the lead time is so long and uh we miss one month uh the factory is going to have uh not enough ra material scenario it means the the the machine will stop production due to raw material uh International Physical World Trade war of course all these affected like what I Shar just now uh National okay National Factor so we have this uh government tax we have tax exemption SST conern duty all these Factor affecting uh the the price okay of our raw material um so if we so when we buy from China we we we are getting a form called form e form e is a form that we receive and we show to our custom to to uh to prove that and not to prove just to get um what do you call that um to get Exempted from Duty okay so uh in Thailand we have Form B so this is like uh Asian or Form B is a Asian country uh they work to together so when they trade with each other they don't charge each other Duty so form e is Malaysian China Trade Agreement okay so when Malaysian buy from China with uh Malaysian government doesn't impose Duty on the product that okay so those are the tax things um okay another thing is a domestic shipping evalu so remember the the raw material will come is from China so the the raw material doesn't come straight from China to Kin okay uh from the ship uh the raw material was come from China part they say tanging part then they were transit in P from parland they will use a smaller ship coming to kuchin but sometime they transit in Singapore uh then come to kuchin uh so that is what we call Trans shipment so uh trans shipment will have certain issue like pop congestion uh let's say um I think few years ago during the co time um uh and P um there are some f bir and then uh uh the server room got sh circuit burn hus and uh the the whole partt is blind you know because they use computerized system they track okay this ship come where they Lo the container so each container have their address so when the system shop this a real story the poort guy go blind they don't know where's the container and they they they cannot direct the driver to pick up the container um so that's the problem with C I mean this this this happen this causing the traffic congestion okay pop congestion sorry Pop congestion because uh ship cannot bur okay ship already arrived at the pot but it cannot bur because because our pot cannot accept the the container so they all have to go manual uh cost po congestion okay another one is uh factor is cabotage policy so far is cabotage policy I think we heard about this uh on and off by our Premier Johari um like what I said um the container that Sarat receive uh usually uh do a trun shipment in Port CL or Singapore Port some TR shipment in kavalu Port so the ship doesn't come directly to kuchin so when so there's a policy where uh government want to um protect the local ship company okay so every International container come to Malaysia they have to stop in Forkland so the Malayan ship will go and pick up the the container and uh distribute all over the country so this a policy so so when government state government say they want to abolish the cotage policy means they want to allow the international ship come straight to kinp from tenin P from Shanghai p from bank P come straight to King so it will actually reduce the lead time okay that means the shipment become faster and less risk like we don't have to do deal with pot congestion you know poest can happen in koching can also happen in clent can happen in Singapore especially during the festive season like the accident that I have mentioned so it's it's a risk so if we can do a direct shipment when the carbage policy is abolished the ship can come to Kin po away then we have a better L time the problem is there's a problem okay we can abolish the policy all we want but the ship doesn't want to come why because the the international ship is super large it's very very big ship I don't know how many container they carry probably 5,000 container okay in in the ship so they only sell and they only stock at Major ports they don't they don't stop in the smaller ports the less VIs Port so if if because if they stop in the smaller parts it's a waste of their time okay so they only St like Po Singapore Port Shanghai port and Japan popular Port uh San Francisco Port Francisco Port Mumbai port and that's it they don't go and stop in the smaller Port so the smaller Port will be served by the smaller ship so that's why the compage policy can never be abolished unless until s population is very big and we we can col we we have a 10,000 or 100,000 of container coming to sarwa every here and then then the international ship will come otherwise uh the we will s or cing P will always be serviced by uh relation ship smaller ship okay cotage policy so um so it is um pointless uh for government to abolish cotage policy because the ship will not come maybe they will come in the future okay we don't know okay Locker Factor so um we have machine up time we have productivity uh we have Manpower and we have delivery um when the raw material reach our Factory uh we need to produce it so we need to make sure that the the machine is up and running okay the machine is healthy um in our line of work uh the machine up time is very important and it's very crucial because every little small F in the machine production is to stop okay of course the manow is the same I need to train the people so that they know how to handle the machine so that they can produce minimum amount of wage okay delivery also is the same um um we need to make sure that the Lorry is um uh healthy the Lor is know fit to to deliver Goods fit means the L has to be in good condition and also comply with the authority tax Insurance insance inspection and so on okay Market segmentation so um our customer can generally divide it into these five category okay the first category is wholesaler and contractors retailer plumber and end user so who are the wholesal wholesaler in basa we call bong so there are those people who buy in large quantity okay so um we serve 80% of uh 80% of our product goes into wholesalers okay so what is their attribute okay they buy large quantity and they usually will barain for very very cheap price so that means we sell them very cheap okay and of course they are very they are very less FY okay they just whatever you deliver to them they just accept and they will sell they will sell to their smaller customer okay so less FY so we we will talk about what is the meaning of very FY later on so the next segment is contractor um contractor are those who actually use the PPE with building okay they building under construction they will cut the pipes they will Design how the water flow so those are the work of the contractor so sometimes they buy in the large quantity sometime they buy in medium quantity depends on the scale of the project okay let's say if they build a a hotel okay 20 Flor so they are going to need a lot of pipes if they build um um single story house okay maybe 20 pieces okay very small quantity of pipes so it depends on the their projects and this car group of people they are uh less fussy also uh because they this this group people they are label okay they they do hard level work so a little bit here and there problem a little bit no problem okay they just go ahead and use it okay the third one is retailer retailer uh um over here means um carway shop okay EST Hardway uh all the Hardway you can find ping so they also uh have uh and this group people they are generally quite fussy because they buy in very small quantity so let's because I mean one section of production we can produce about let's say 1,000 pieces P at once 24 hour okay today 8:00 we produce until tomorrow 8:00 we can get 1,000 pieces of p and how many retail how many pieces a retailer will buy maybe let's say 10 pieces a month a month okay 10 pieces so when they order 10 pieces and the pipes count they will examine the pipe toly 10 pieces of easy to examine how can the factory examine 1,000 piece no we don't examine every piece we we do sampling examination let's say every 100 pieces will examine one time something like that so they examine every piece and if the pipes are a little bit uh bended a little bit uh cutting not good the color is uh a little bit different the thickness a little different the length is a little different they raise a complaint okay so they will they will complain until like the sky want to fall anyway that's my perspective okay because we produce 10,000 1,000 pieces a day and a month will produce about um maybe 10,000 50,000 pieces of pipes all in in general so what is that compared to 10 pieces you get what I mean they can't perspective so um plumber okay plumber they buy in very small quantity um so plumber and contractor sometimes they are in the same category but plumber um the attribute of plumber is they they are a very fasty Ty person they are Perfection because why because when you connect the pipes you make sure the PIP doesn't Le the p is so that is the what you call the okay so when they come into U it comes to um a little less than perfect pipes they will make a complaint so they are very FY people um usually when I sell to plumber I only sell to my friend okay if I know them personally my friends never mind just take you want two pieces you want five pieces never mind just go and take friend friend sell as friend and another is end user of course um people like you and me when you want to do some small modification you want have piece of pipes you want to do certain things you want to do Hydroponics those are any users uh and they are very FY okay so this is how we categorize so um of course nothing wrong with FY and less FY but that is just the the the uh the character of different Market segment uh for uh for you to understand so like I said um this uh in our industry um we are seller market so that means the actually the customer come to us so um this is very different um then other industry let's say like banking industry that's time I work in Bank every day my my boss will hey uh this month you sell how many credit card your target is 50 no you only sell three no enough okay next month more some more okay so those are Target so we have to go out and push the market or um uh what else um you sell um this U misam okay I got a friends they selling mam so um you go knowwhere to sell because every Market got me you know you got me me you got me again uh Korean me Chinese me all kind of me so how you going to push your M du into the market how do you convince the the Super Market to buy a m du we got to think you got to strategize so you got to convince them right but in our industry is different we are selling Market we just sit there and people come and and and sometime we choose who to sell we don't sell to everybody um we to evaluate their background um we have a we have a stranger recently U last year he came with five person uh I was I wasn't in the factory he just come walk around and then he get my contact and call me he said I want um 1,000 pieces of P of M there a lot okay uh in in the in general definition is a lot so he said and then um he left his name cut so I going to check his background ask around who is this guy all that and later on I found that he he is um some kind of comment so um because he um okay there a long story I don't want to to to share why but later I know his background is not good so we I just sto pick up his phone so um my Supply share with me how his customer buy from him they beg him okay they beg him for allocation Mr so so please give me us a container this month we need two coner please give us and nor only if we do sales we do entertainment right we go to customer make happy and this one is we go to make a supp happy so that they can allocate for you price is not a problem because uh there is a limited allocation so um this kind of thing so um personally I I grew up thinking that when you do sales job you have to go and go around town and you know work very hard not necessarily okay there are some industry you just sit there and people come for you uh and all you do is you check them whether you should sell to them or not uh um due to their background you like them or not if you don't like them I go not not until that okay not until that but um you get what I mean okay you get what I mean okay um product [Music] positioning so um the product that we are producing is actually sering spe okay so like I said series spec is a is a copy from Bri standards so before series started we use Bri standard so that's why in every P Bri you see you see BS BS stands for Bri standard um so our p is follow the British standard uh accept the thickness okay so British standard is sorry Ser is having about 3 ours iser um or we call it commercial quality okay not sering quality Comm means it means the quality that the market is looking for so commercial quality uh and uh most of our P so to non government project okay like those terce house construction um um when um uh like this um long time ago when this uh sat Malaysia project they have they they trying to help the gong and the long houses to channel their rain water into a tank this where the time government sell a lot of tank right blue color tank B BL they so how do they want to accumulate the water from the tomu of course you need a rain water C and the pipes but the pipes is that pipes that we are producing so um of course the the high rise like condo hotels um they will require a sering specification that means the the ticker pipes uh okay uh the next one is rural area application uh long house comp water R application or sometimes um um the pon construction they they actually build a retaining wall um so they they need the rain water to pass into the drain so they use the PIP because is really non critical okay okay Plantation Farm water channeling grinage hydroponic I say Hydroponics oh palm oil Plantation palm oil plation um thank you I think that's pretty much underground Rin water okay four piece uh product price promotion and place um I think uh in in our line of work um because the customer that we are dealing with are repetitive customer that means they only they buy again and again and again they buy every every month okay I like um hand handon right how many times you buy uh in in 5 years maybe two times you buy but in our work or customer will come maybe every day or somay will buy once a week so so each time they buy they will keep asking for Discount okay so oh you is cheaper okay I buy from you oh no this time you are not cheaper there he is cheaper so I buy from you so so that means our strategy is really the price once you drop the price the demand will start pouring in until someone cannot C so so of course we have to balance between the price and our product because uh the product our production is fixed 24 hour we only can produce U 1,000 pieces so if you want 10,000 pieces you got to wait 10 days maatic mathematically speaking so uh if I deliver you uh 10,000 pieces how about other customer cannot not not enough allocation so we have to balance the price and the the demand okay in this case like what I said our product is very buky so our competition from West Malaysia and overseas is uh not intense okay uh due to highly time and high shipping cost we have a lot of customer like this morning call afternoon pickup okay so it's like one day late time if you buy from West Malaysia you buy one container um you order today next Monday you can get if you order during Christmas time maybe the container will arrive after Chinese New Year because from Christmas the shop the pot will be contested all the way until after CH be and and the guy they will prioritize the delivery okay so once if if you ship food food will go first okay because food got expired or pipes it's not expired so they will P the pipes uh uh so they will not allow the container to be processed okay in this case um price okay product price um okay promotions uh actually in our line in our industry there is no much promotion but um sometimes when there is customer complaints when they they are not satisfied with the products that uh we have uh we will tend to give them a little bit of discount in the other day so that's about it um this happened about three weeks ago when uh due to some sensor uh issues so the pipes that we produce we're supposed to produce uh 5.7 M 5.7 Z M but uh two weeks ago due to the sensor error we only produce 5 68 okay so about 2 cm sh is about this this much shorter okay shorter and it's like end of the war for the customer you see for us it's like okay just CM just take it out you know but to them it's like no no no this is this is substandard this is you will try to trly Quality okay okay okay whatever you want to say I give you discount okay okay okay so later I measure I in the percentage of okay 2 cm over 5.7 M that is 0.4% shorter 0.4% shorter how to get discount should I get 1% discount sounds too insulting right 1% 100 R 1% is 10 cent one ring one ring it's like it's something okay you see because uh in our customer um they are mostly a you know the all all thoughts they they they inherit their L from their father so some of the customer they have this uh superstitious think not superstitious but a traditional way of thinking so so I was thinking okay you're not satisfied with a 2 cm shter how should I compensate you I I have few thousand pieces at in the factory you don't expect me to produce another one 5.7 for you I can't you know I don't have the time I don't have the place to to store the PIP so what should I do I give some discount how much discount half% okay then I come up with a figure 0.88% U because most of our Chinese customer are Chinese so 8 sounds luck lucky right so I 0.8 so the total amount of the invoice minus 0.8% they and uh let's say 100,000 Bill 100,000 worth of Bill you about how much 800 yeah so enough for my customer to CH to B my grand Customer because because this kind of issue actually going down okay going down stream the customer complaint they wholesaler so when they sell to their retailer to the plumber the the complaint will come back if they found out if they really go and measure they will found out they will find out and they will they will complain so the 800 will be like uh a little bit of entertainment uh fee for the customer to spend okay so those are the only promotion that uh we have um and sometimes um the like last year they were not all uh Ukraine and uh Russia starting a war so they expecting the C oil price to go up so they also expecting the price to go up and the customer are very con they very um excited call they're very excited they they're very worried some they say the price going up I want to stop time my price can I place the order I want 5,000 pipes I said come on boss I only produce 7,000 pipes a month you want 5,000 pip that is half of my productivity how about other customer cannot I cannot give you that much but I can give you U 100 pieces or 500 pieces so those are some of the promotion because our customer know the the sentiment outside so when they know the sentiment outside they know what it's going to happen happen to the price to the pipes that they are buying every year and there so we cannot say no we can't we have to b a little bit so those are some of the promotion that uh uh it's not hard and fast rule but uh it depends on the relationship with the customer and how how long they have been buying product we have customers supporting us since the first day seven years um or maybe 10 years so we have to take care of that we we have to make that happy even 0.8% may not sounds a lot but it it sounds lucky okay I don't believe it but some people believe it so as long as customer is happy it's okay the next one is uh place okay because the pipes is very b key so a lot of our customer they they don't have enough because they not enough place to store the pipes if they want they really want to store pipes they might need to rent a warehouse which incur addition rental so a lot of time they just do inent order they don't want to keep stop so whenever they have an order they will call me they will pick up from us and they'll deliver to the customer sounds easy so they they don't have place to Sol but of course those more serious customer they really serious into the business they will buy a lot and they will stop because there are days where price going up so they buy a lot from us in cheap price they later they'll sell um in higher price so they make more profits okay so if there has a to store the pipes this is the advantage of course it can go reverse if the if the price coming down okay and they have problem if they St too much and they they have to give discount so they're making small profits so it go both way um but of course um most of the time having a place is Advantage okay it's Advantage to their business okay usually they will so um if you have uh chance um okay probably you don't I also don't have if you have if you are buying a stock market okay you invest in the bus okay so you can go into the company and you can look into their financial background you will realize that a lot of company met lots of profit during the co time right we are making profit but not as much okay because we buy and suddenly Co lock down a lot of price going up okay t a lot so all the all the uh raw material that we have we're actually selling at much higher price okay um Construction Construction company uh factories of course like uh company like ging uh they one cannot G hotels shopping mall those are making big loss but Construction Company factories they are like if you read a report about Pro they make tons of money okay during the co time because shortage sometimes is uh cheap shortage the you know you want to buy BR you book the model for one year so and uh anyway so place okay place to store the spare parts so they store in the cheap price so when the price goes up then they sell at the higher price so they make profits okay uh think that's about it thank you any question uh how do you set the price for the product this a good question um do you have time yes yeah yes okay 15 minutes um this is a good question um when we first started I'm not coming from the pipe industry okay my prev broker okay i s stock I was an engineer so I'm not a specialist in pipe selling so I don't know how much to sell okay seriously so when we produce the pipes and we ask our customer hey how much are you willing to buy from am nobody is going to tell you you ask the competitor going to tell you how much they selling right so we have to make a guess so how do how do we do it I got 10 potential customer okay I sell this P at 10 R for you you buy then next you i s at 11 R you still buy okay 11 is still correct one me guess I said to the third one 15 R oh he not buying okay 15 ring is wrong so the price is between 11 to 15 so as the fourth customer I put a price of 13 ring and he buy a little bit so probably the 13 R price is correct so I'm making a guess and in the midst of making these guesses I actually offended a very big customer and back then 10 years ago and he is still my uh I don't quite enemy but um what do you call in ches Chinese he just he just want to me all the way because of the rivers rivers yes it's a very Fierce Rivers UN today um um you know why okay because he is the second customer so i s you he's the Third customer I sell you 10 R you buy I say you buy and the big customer come I sell you 13 R and he buy and then Lo and beh I I forgot my invoice okay I like invoice at his office and he saw how much i s to him he said he bought one piece you s him 10 he buy 100 piece I sell 13 R and he get angry you know what I mean so he become a very he had me at the same time he liked me very much because I have the product so up to a point he he cannot he s and he go buy machine and he and since then he me so it's a very costly mistake uh but uh it's very uh exciting getting to know so every every everywhere uh I mean every customer I sell he wants to sell every ring I caugh he caught 50 Cent so said okay fine let it be but this is price guessing but of course um um sometime when when we we get um we met more friends in the industry people will tell people give you a hint okay so from there you you you get price setting is a very headache uh uh things to to do um but of course um most of the price didn't come from raw materal once you get the The Benchmark right so the rest of it is just a fluctuation of the raw material exchange rate and then from there you factor in do I answer your question thank you anym and so if like if the competitor and you you as a manufacturing like manufacturing as sell 10 R and Manufacturing B Sals at ring so you guys are like reverse rever rival yeah rivalry like go like helping each other for Discount anything like it's part of like partnership is it no it's not a partnership it's a competition oh because it's just like you you shop for for uh for um it's just like you you go shopping your mother go buy vegetable all this Market is 50 c this apple this is cheaper so you buy from cheaper one so usually that's what happen so so um like this funds I mean like suddenly one month you see the sales drop customer running away then you probably you can guess why because somebody else is cheaper C run away so how how you deal with this issue um okay um those who have uh Market intelligence like you make more friends in the market you can ask around and somebody will give you a hint and you can just uh walk that out another way is uh you just reduce the price and make so if your sales come back then then the The Price is Right if the sales doesn't come back next one you drop again again and again and again yeah because because I wondering is the Press drop drop Bing right is because you need to cover your raw materials and your the the the vocal salary everything yeah uh of course there there is the uh threshold that you cannot go below that because there the your cost and anything above that is a profit so you can just drop your price until you your profit is getting smaller and smaller that's it of course nobody want to sell at L right but this guy competitor who who rival me for 10 years I I know there was a time 5 years ago he sell at L just because he want to beat me he want to he want to gain a market share okay and and he want to like whatever he want to call it so he said below I know it because this price that my customer show me we cannot do okay we cannot sell at this price this is below cost already be in mind I mean I'm from engineer background so all the machines the factory is run at very high efficiency so with a high efficiency means low cost you spend a small amount of cost you can produce a f high efficiency um so our Factory is already at high efficiency and we can and I think this price is too cheap is it under Economist or scale again economic of SC is like in a like you in a you you make a lot of production in a lower cost you mean who the competitor I mean you um yes of course the the more you produce uh the cost the the lower the cost okay but of course there's a limit um like for us our limit is 24 hour so we have to stop the machine because the stuff need to rest uh so our our our limit is uh 12 hours but for some other Factory limit is maybe 48 hour we for us is uh someone to say 48 hours 48 48 hours stop yeah they are not stop but ours is we stop 4 hour we divide into three session so 24 hour we stop another 24 hour stop 24 right yes so uh do you think uh it is wise to keep the prices cheaper always to have keep your customers like keep the prices cheaper so that you don't L your this a good question um in the beginning of our business we actually sell because we don't know what's the price you see we don't know what's the market price so we sell actually we actually sell very very low until our competitor telling us you are selling to another competitor not not this uh this another competitor say I'm selling too slow I said sure I know I'm selling very very low do you give me your price I can check it out I can increase the price Follow Your Price He refus to give me so if you don't get me I just sell whatever price I feel it's right right so um let's say one piece of 4 in that is pass around one piece is um he's selling 25 R I'm selling 20 R 5 R differ so so he's telling me that I'm selling too cheap so you tell me how much you are selling so I will follow you don't want because if you riew his price to me he's losing right so of course his price to his customer is his secret so if he review to me his his selling price he's selling 25 I'm selling 24 he still lose but if he doesn't come to tell me and selling 20 he's also lost so either don't way he he's not going to win okay that's that's the first thing okay and um so we have been selling uh price very very very cheap for a long time and up to a point the C time I think Co time make a lot of people realize a lot of things about life okay so before I was younger so don't you you you sell uh this price I sell 5 cheaper a lot you know people talking about 50 Cent cheaper it's already can get a market share like one is 20 r one is 1050 it's already cheaper so I was selling much cheaper and and when comes and um he start thinking point of uh working so hard you know and having a small so small as an entrepreneur okay I'm not talking about uh the the stu um he said working so hard you f f f f fight and then make a small profit and after Co the strategy changed I said um I don't want to prod so much and sell so much and make small profit I want to produce a little but sell higher so that my life is better you know because the more you sell the more complaint you're going to get it's proportional the complaint comes back is proportional so you sell smaller quantity but you with a better profit margin then the life is easier is less stress in this way do I answer your question yes sir any other questions that you want to ask uh uh do you do any uh promotion uh to attract customers new customers new customers yeah um there are two points to your answer um the first one is this Market is very small the PVC Market is very small in Kuching so most of the customer I already know oh so if there's a new customer who claim that he's a big customer come to me uh usually are fake like like what I share with you a guy who come and then he give me a name card he want to place a big order and L I found out he's a scammer so I know him okay so this the first one so the second one is this is a seller Market okay so when customer comes usually customer will come to me oh we don't go out to the street and me like that we don't do that on and off I I receive a call from stranger the inquiry they will come so most of the customer who we don't know we will sell in cash that means we will collect the payment when the good is delivered but for those customer who are we know we deal with long times who will give you 30 months 30 days uh payment terms or 60 days payment it means we allow the customer to H down to all for 60 days or 30 days depends on um our comfort okay our feeling um I must say I must say um in this industry a lot of decision is made based on feeling okay I'm coming from a technical person a very technical person a lot of things happen customer complaint pricing 0.88% uh you know shorter by half uh it's not a feeling you know people don't feel right they they they they receive the PIP they feel that this p is inferior in fact it's not the feeling is Disturbed so what we need to line up is the this is in our in our life work okay so promotion is also part of the J feeling of the customer something I so basically you have plenty of customers but not a huge uh Market but then those are your loyal customers who always come again for the products basically repetitive custom repetitive yes our our customer base is not big we only have a few very few selected on but they they are in need of products okay so the is uh for loyal customers only um not necessarily but most of the promotion is given to a loyal customer as as a appreciation of their loyalty okay okay thank you but noway there's no loyalty they will go they will just run away the moment they figure out other people price is cheaper go but of course we still want to dig out certain amount of loyalty from from them and reward them to make them happy okay yeah I think it's all yeah thank you

it is with great pleasure uh and enthusiasm that we welcome Mr and okay to our lecture and sharing session today now Mr Andy uh is um not only an accomplished entrepreneur but uh also an industrial speaker uh whose insights will undoubtedly enrich uh your understanding of the Practical aspects of your studies okay so we are also honored to have associate professor Dr CH uh from Chun the head of school for the faculty of um business and also um also sh as the teaching assistant with us you know as a guest as guest listeners during this uh sharing session okay so today we have the privilege of learning from Mr Andy who is the owner of a PVC pipe manufacturing um company in sinka all right uh his extensive experience and knowledge in the field will shed light uh on the intricate world of manufacturing uh and its significance particularly in the context of your final assessment which is the portfolio uh which you are currently and going to uh you know be working on later so as we listen to Mr Andy&#39;s presentation about his company and also about his uh the products um I encourage you all to be actively uh engaged and do take this um opportunity to gain valuable insights from him uh his expertise will undoubtedly provide us with a fresh perspective uh and Inspire to excel in your academic uh Pursuits okay so without further Ado um I invite Mr Andy to share his knowledge and experiences with us so the floor is yours Mr Andy [Music] class class it&#39;s better um sorry for the MK on um I having s so I think I fig it&#39;s better for me to put on the m to keep it to myself all the um so [Music] um okay my name is Andy um the company that I&#39;ll be presenting is centr point industri is it&#39;s a company currently operating in uh it was established since uh November 24th probably 11 year anniversary uh so our business is manufacturing PBC 5 we only do one thing PVC 5 so that&#39;s the sample yeah catch um so I am the general manager so I&#39;m currently actively running the company and of course we have a few other partners um together so um this is some of the uh products that we have um uh the one passing around there is PVC pipes I think it&#39;s very familiar to you guys you can find it under your uh washing Bine uh your toilet uh setic uh pipes uh rain water when the raining you know uh the water will be channed through your roof into the pipes that&#39;s the pipes into the drain so it&#39;s a very common use pipes um uh in the market uh some people they use it for all kind of things even the hydroponic use that pipe to drill a hole and then you plant the um vegetable whatever it&#39;s the same thing so so this pipes are they have different thickness and diameter okay so the one that has been passing around is 4 in so we we we do have 6 in 3 in 2 in 1.5 and so on so any any pip that is smaller than 1.5 we call cond uh condu will be the one that is running the electricity cable okay so this one the the bigger one usually they use to run water okay so those are non pressure water so this another type of pipes where we run pressure water inside when you turn on the tab you you see the water flowing out from the T there is pressure water so this one the one that we have been producing is the drain water that means is non pressure so so that means the expectation is not so high pressure water uh the the thickness has to be thick so that uh the pipe will not burst okay burst especially in the middle of the night when everybody is sleeping the pressure is very high in the pipes so the the pipes has to be able to sustain that pressure this one is a drain water okay so the expectation is not that high so we have 1.6 mm thickness 1.8 2.1 2.4 and 3.2 um so those are the photo how how we stack the pipes in the factory and this how it look like um so this is how the machine look like um so this is the front part and this is the back part uh so this is where the raw material come in uh and you go into the hopper and go to the screw conveyor get the hopper and get into the uh barel this is a mall so so the mall is hot so when this raw material in the form of powder they get to the mall it will melt then so this is where it come out and then you get into the cooling chamber it get spray by the water and then uh after that this is a holler where you pull the Harden pipes this is a cutter he cut the pipes in length and then this is a ster so this is uh uh summary how the PIP is being produced um it&#39;s not easy but if you do it every day become very easy okay so these are our suppliers our we have um our raw material is divided into two the major raw material and the minor raw material so the major raw material uh comes from Thailand Korea and China so we choose based on pricing so whichever they offer cheaper we will buy from that um and another one is filler filler is um we still technical is fer okay so we get the the fer is calcium carbonate calcium carbonate is actually a stone like the stone that you found on the on the road side what&#39;s the difference between the stone you found the road side and the stone that we use the that we use is very fine they grind very very fine like powder like powder very fine like Meo okay those kind of finers um so we use this we use this PVC raisin and Feer a lot and then of course we have the minor raw material mainly come from China and West Malaysia we have rant heat stabilizer and antiuv rant stabilizer is very essential during the manufacturing time so that means um when the raw material get into the machines the lubricant and heat stabilizer will function okay will do it work and another one is anv so some sometimes you will ask how long will this P this P will last okay um because sun has UV so if this pipe get under the sun the U the UV will break down the pipes and the price will will be will get very what you call um rle rle is okay so the pipe will break so when we put in antiuv we actually um like a sun block we put on sun block anv so we also have uh so this antiuv is a type of chemical we call inide to protect the pipes so a pipes with UV maybe last for 10 years a pipes sorry a pipe without UV anti UV probably will last for 10 years a pipe with anti UV inside inside it it probably last for 30 years 40 years uh maybe 100 years okay so um so that&#39;s why um the pipes that um Buri inside the ground will last for a very long time um it doesn&#39;t degrade uh of course and the next one is the suppliers for machine and spare parts so our machine is a Chinese machine so of course all the SP parts that we get are from China um so um Malaysia is a ex British colony so we use British standards right BS so sering uh and a lot of our spare parts are actually uh Bri standards and China is using American Standard so British standard and American Standard is different so that&#39;s why when we buy the machine from China we only can get from China or unless we get SP from United States which is super expensive so we stick back to China we cannot buy SP from any other country because China is using American Standard okay so next slide is the Plastic industry players um in our industry um in kuchin or in Sarawak um this uh type of factory is very small in number so um very seldom we uh compete head on okay just like Coke and so or maybe Coke pepy Cola and Coca-Cola is head on competition uh for us it&#39;s like not that much okay you can hear a lot of plastic company in Kuching but most of the company are producing different type of plastic products okay so let&#39;s say uh we have West Malaysia we have this resing Tech uh they they produce U Ro block if you see the Pono construction you see the red color and white color plastic block at the Rock side to guide you through produced by ring P I think maybe 70% um they also produce uh this uh blue water tank okay blue water tank um you know uh during U na razak was prime minister last time they had this they give out a lot of this Su Malaysia tank okay the blue color tank okay those are plastic tank so this plastic tank is actually produced by w s so if you see on the road side this big GL only Carry Three tanks so those are the plastic tanks so all all those are in the same uh industry okay Plastic industry uh of course we have ch Vina plastic those are our industrial player from West Malaysia in SAR we have waa of course um po Flor these two are in this one I think is [Music] around and Cas plastic is our uh biggest competitor and they has close last year another one is for new so they produce uh different type of pipes like but I say just now um pressure pipe and non pressure or pressure application non pressure application uh water tank Rock block and uh those are the common products that we use S of course U uh last two years ago um our government uh planning to build solar farm okay solar farm on the water okay not solar farm on the ground on the water so when they they build a solar F they need a float to place the solar panel so the float is actually uh made of plastic uh it&#39;s the same material that uh it&#39;s the same material that they use to produce uh Rock block at the Rock side okay anyway just for your info okay so of course we have oversea industrial player from Korea Taiwan and China and uh the the competition from overseas Market is very small because uh in the nature of the product okay say let&#39;s say for example the the tank the water tank one super big L can only carry maybe about three to four water tank okay one water tank probably about 10 kilo raw material so four water tank only needs about 40 kilo of raw material right so um how could they produce a tank in Taiwan and bring to Kain the the shipping cost will be super expensive so they might well ship 10 kilo of raw material to Kin we produce here so that is the the barer of Entry is there okay uh it&#39;s very difficult for overseas competitor to come in but they do come and invest okay they Jo man the locker player they set up a machine here and they bring their raw material inside and we produce here locally so um the better of Entry is also one of the reason why we can we started the this company because we figure that uh this parts that you passing around is it&#39;s very Bing so the the shipping is very difficult um it take long time okay so that&#39;s why we we produce here and we can survive uh long time because the the the shape of the product itself okay the bers of the product causing the West Malaysia competitor very hard to come in the overse competitor very hard to come into the market okay I already explained it just now uh Malaysia is ex British colony so we are using British standard so whichever uh country that whichever country we go we pl in the pipes okay use if you go to um non Commonwealth country then certain adjustment need to be made it&#39;s the same thing like if you if you travel to China your your laptop charger or your handphone charger you you cannot plug in because the voltage is different the the socket is also different uh because of the different standard uh that they adopting okay next macro and micro environmental Factor so um Manufacturing of PVC pipes actually involves a lot of factor it&#39;s very complicated it&#39;s very complicated and being affected by a lot of factor okay the first one and the Very obvious one is exchange rate so um we buy raw material from Thailand from China we we are paying with US dollar okay so that means we have to buy the US dollar and then we pay and then the supplier s has to sell the US dollar and buy their own currency so how many times change two times right bring it to US dollar US dollar to taian or bring it to US dollar then US dollar to ring be China Chinese currency so uh so now we are actually in the top of our China counterpart to pay in ring B because there I think China and India they set up a uh a group called bricks is it correct I can&#39;t remember I think bricks so um with so the country is trading within their bricks they are using rooming be they are no longer they are trying to dit US dollar all this happened because uh when the US under Donald Trump time they have tread war with China so this is the result of the trade war with China brecks so of course for us as a as a buyer okay as aaser we buy raw material from China we P ring be we we only change from ring to ring be so we only lost one time R uh lost rugi okay lost one time so when ring getting weaker um our product or we pay more each time because we buy in container okay one container is 18 metric time so as ring getting weaker we pay higher amount in R each time okay last time uh during the before Co time one container probably about 60 70,000 R um now can go up to 100,000 per container so 30,000 more so of course um how what do we do with that we pass down the cost okay so that&#39;s why the C is getting more expensive so when the C is getting more expensive the house that you are going to buy is getting more expensive so so when house you buy get more expensive that means you guys are asking for higher salary so that you can afford so it&#39;s all come in circle anyway that&#39;s the another topic okay second one is raw material unit price so uh apart from exchange rate or or the raw material price affected by US dollar also affected by the unit price okay um so um our raw material price is the PVC raising that we use is a by product of oil oil and gas um refiner okay so from the crw oil uh we get crw oil under the ground and then they will produce petrol and then some portion will produce diesel some portion will produce gas some portion will produce um car that will build the road and some portion will be used to produce PVC racing that we&#39;re using today so that means when the crw oil price up our unit price will go up okay so when there uh uh last year during the Russian and Ukraine war When U and uh the oil production getting affected because Russia is one of the second or third largest oil exporter in the world right so and then us boycot Russia so once they boycott the oil price go up so our raw material price also go up so it&#39;s so when we have two Factor US dollar and unit price the our costing become very complicated okay the next one is shipping availability big time uh and po effect Shipping schedule so um this like what happened um about 3 weeks ago okay I think in China they celebrate National Day har kab I think on 1 of October right and they celebrate for one week China is different okay once they have this kind of China is the communist country Okay so when they celebrate Chinese New Year they celebrate for 15 days straight not like us here we celebrate for 3 days and a lot of other company will start operating China is not they have new year they go one 15 days or some go one week national holiday is the second largest event in the country so a lot of them will B comp and now the the national day will last for a week so we make a payment before the national day and some say they cannot shoot because national day so we waited for after National day for shipping and after the national day they tell me they cannot get the ship because the ship are fully booked because all the order uh has been waiting since the before the national day so shipping availability has become an issue because why um because when we buy the raw material we buy once a month okay so when we miss the timing we cannot buy anymore we have to buy next month okay so this is the pattern of our purchase um in this industry in this so that&#39;s why um shipping avability is very important Le time uh holiday Shipping schedule and all that and of course limited Supply uh limited allocation by suppliers so I&#39;m um I must say that in our industry we are seller Market what does it mean by seller Market do you see when iPhone uh new version coming out people are lining up to buy right so and and the iPhone will will determine okay this new version iPhone cost 5,000 R they fix the price this a seller market so people will just R because they want the brand so for us it&#39;s pretty much the same seller Market that means u customer come to us okay we we hardly buy so it&#39;s as in the same way with buy material is also the same we have to taste after our supplier to buy supplier will not come to us hey you want not we have this have promo them they just tell you the price and they will not follow up with you if you want you call it immediately and lock in the order if you wait for one day two day har stock noral stock that&#39;s it you need to wait for next month so when because when the lead time is so long and uh we miss one month uh the factory is going to have uh not enough ra material scenario it means the the the machine will stop production due to raw material uh International Physical World Trade war of course all these affected like what I Shar just now uh National okay National Factor so we have this uh government tax we have tax exemption SST conern duty all these Factor affecting uh the the price okay of our raw material um so if we so when we buy from China we we we are getting a form called form e form e is a form that we receive and we show to our custom to to uh to prove that and not to prove just to get um what do you call that um to get Exempted from Duty okay so uh in Thailand we have Form B so this is like uh Asian or Form B is a Asian country uh they work to together so when they trade with each other they don&#39;t charge each other Duty so form e is Malaysian China Trade Agreement okay so when Malaysian buy from China with uh Malaysian government doesn&#39;t impose Duty on the product that okay so those are the tax things um okay another thing is a domestic shipping evalu so remember the the raw material will come is from China so the the raw material doesn&#39;t come straight from China to Kin okay uh from the ship uh the raw material was come from China part they say tanging part then they were transit in P from parland they will use a smaller ship coming to kuchin but sometime they transit in Singapore uh then come to kuchin uh so that is what we call Trans shipment so uh trans shipment will have certain issue like pop congestion uh let&#39;s say um I think few years ago during the co time um uh and P um there are some f bir and then uh uh the server room got sh circuit burn hus and uh the the whole partt is blind you know because they use computerized system they track okay this ship come where they Lo the container so each container have their address so when the system shop this a real story the poort guy go blind they don&#39;t know where&#39;s the container and they they they cannot direct the driver to pick up the container um so that&#39;s the problem with C I mean this this this happen this causing the traffic congestion okay pop congestion sorry Pop congestion because uh ship cannot bur okay ship already arrived at the pot but it cannot bur because because our pot cannot accept the the container so they all have to go manual uh cost po congestion okay another one is uh factor is cabotage policy so far is cabotage policy I think we heard about this uh on and off by our Premier Johari um like what I said um the container that Sarat receive uh usually uh do a trun shipment in Port CL or Singapore Port some TR shipment in kavalu Port so the ship doesn&#39;t come directly to kuchin so when so there&#39;s a policy where uh government want to um protect the local ship company okay so every International container come to Malaysia they have to stop in Forkland so the Malayan ship will go and pick up the the container and uh distribute all over the country so this a policy so so when government state government say they want to abolish the cotage policy means they want to allow the international ship come straight to kinp from tenin P from Shanghai p from bank P come straight to King so it will actually reduce the lead time okay that means the shipment become faster and less risk like we don&#39;t have to do deal with pot congestion you know poest can happen in koching can also happen in clent can happen in Singapore especially during the festive season like the accident that I have mentioned so it&#39;s it&#39;s a risk so if we can do a direct shipment when the carbage policy is abolished the ship can come to Kin po away then we have a better L time the problem is there&#39;s a problem okay we can abolish the policy all we want but the ship doesn&#39;t want to come why because the the international ship is super large it&#39;s very very big ship I don&#39;t know how many container they carry probably 5,000 container okay in in the ship so they only sell and they only stock at Major ports they don&#39;t they don&#39;t stop in the smaller ports the less VIs Port so if if because if they stop in the smaller parts it&#39;s a waste of their time okay so they only St like Po Singapore Port Shanghai port and Japan popular Port uh San Francisco Port Francisco Port Mumbai port and that&#39;s it they don&#39;t go and stop in the smaller Port so the smaller Port will be served by the smaller ship so that&#39;s why the compage policy can never be abolished unless until s population is very big and we we can col we we have a 10,000 or 100,000 of container coming to sarwa every here and then then the international ship will come otherwise uh the we will s or cing P will always be serviced by uh relation ship smaller ship okay cotage policy so um so it is um pointless uh for government to abolish cotage policy because the ship will not come maybe they will come in the future okay we don&#39;t know okay Locker Factor so um we have machine up time we have productivity uh we have Manpower and we have delivery um when the raw material reach our Factory uh we need to produce it so we need to make sure that the the machine is up and running okay the machine is healthy um in our line of work uh the machine up time is very important and it&#39;s very crucial because every little small F in the machine production is to stop okay of course the manow is the same I need to train the people so that they know how to handle the machine so that they can produce minimum amount of wage okay delivery also is the same um um we need to make sure that the Lorry is um uh healthy the Lor is know fit to to deliver Goods fit means the L has to be in good condition and also comply with the authority tax Insurance insance inspection and so on okay Market segmentation so um our customer can generally divide it into these five category okay the first category is wholesaler and contractors retailer plumber and end user so who are the wholesal wholesaler in basa we call bong so there are those people who buy in large quantity okay so um we serve 80% of uh 80% of our product goes into wholesalers okay so what is their attribute okay they buy large quantity and they usually will barain for very very cheap price so that means we sell them very cheap okay and of course they are very they are very less FY okay they just whatever you deliver to them they just accept and they will sell they will sell to their smaller customer okay so less FY so we we will talk about what is the meaning of very FY later on so the next segment is contractor um contractor are those who actually use the PPE with building okay they building under construction they will cut the pipes they will Design how the water flow so those are the work of the contractor so sometimes they buy in the large quantity sometime they buy in medium quantity depends on the scale of the project okay let&#39;s say if they build a a hotel okay 20 Flor so they are going to need a lot of pipes if they build um um single story house okay maybe 20 pieces okay very small quantity of pipes so it depends on the their projects and this car group of people they are uh less fussy also uh because they this this group people they are label okay they they do hard level work so a little bit here and there problem a little bit no problem okay they just go ahead and use it okay the third one is retailer retailer uh um over here means um carway shop okay EST Hardway uh all the Hardway you can find ping so they also uh have uh and this group people they are generally quite fussy because they buy in very small quantity so let&#39;s because I mean one section of production we can produce about let&#39;s say 1,000 pieces P at once 24 hour okay today 8:00 we produce until tomorrow 8:00 we can get 1,000 pieces of p and how many retail how many pieces a retailer will buy maybe let&#39;s say 10 pieces a month a month okay 10 pieces so when they order 10 pieces and the pipes count they will examine the pipe toly 10 pieces of easy to examine how can the factory examine 1,000 piece no we don&#39;t examine every piece we we do sampling examination let&#39;s say every 100 pieces will examine one time something like that so they examine every piece and if the pipes are a little bit uh bended a little bit uh cutting not good the color is uh a little bit different the thickness a little different the length is a little different they raise a complaint okay so they will they will complain until like the sky want to fall anyway that&#39;s my perspective okay because we produce 10,000 1,000 pieces a day and a month will produce about um maybe 10,000 50,000 pieces of pipes all in in general so what is that compared to 10 pieces you get what I mean they can&#39;t perspective so um plumber okay plumber they buy in very small quantity um so plumber and contractor sometimes they are in the same category but plumber um the attribute of plumber is they they are a very fasty Ty person they are Perfection because why because when you connect the pipes you make sure the PIP doesn&#39;t Le the p is so that is the what you call the okay so when they come into U it comes to um a little less than perfect pipes they will make a complaint so they are very FY people um usually when I sell to plumber I only sell to my friend okay if I know them personally my friends never mind just take you want two pieces you want five pieces never mind just go and take friend friend sell as friend and another is end user of course um people like you and me when you want to do some small modification you want have piece of pipes you want to do certain things you want to do Hydroponics those are any users uh and they are very FY okay so this is how we categorize so um of course nothing wrong with FY and less FY but that is just the the the uh the character of different Market segment uh for uh for you to understand so like I said um this uh in our industry um we are seller market so that means the actually the customer come to us so um this is very different um then other industry let&#39;s say like banking industry that&#39;s time I work in Bank every day my my boss will hey uh this month you sell how many credit card your target is 50 no you only sell three no enough okay next month more some more okay so those are Target so we have to go out and push the market or um uh what else um you sell um this U misam okay I got a friends they selling mam so um you go knowwhere to sell because every Market got me you know you got me me you got me again uh Korean me Chinese me all kind of me so how you going to push your M du into the market how do you convince the the Super Market to buy a m du we got to think you got to strategize so you got to convince them right but in our industry is different we are selling Market we just sit there and people come and and and sometime we choose who to sell we don&#39;t sell to everybody um we to evaluate their background um we have a we have a stranger recently U last year he came with five person uh I was I wasn&#39;t in the factory he just come walk around and then he get my contact and call me he said I want um 1,000 pieces of P of M there a lot okay uh in in the in general definition is a lot so he said and then um he left his name cut so I going to check his background ask around who is this guy all that and later on I found that he he is um some kind of comment so um because he um okay there a long story I don&#39;t want to to to share why but later I know his background is not good so we I just sto pick up his phone so um my Supply share with me how his customer buy from him they beg him okay they beg him for allocation Mr so so please give me us a container this month we need two coner please give us and nor only if we do sales we do entertainment right we go to customer make happy and this one is we go to make a supp happy so that they can allocate for you price is not a problem because uh there is a limited allocation so um this kind of thing so um personally I I grew up thinking that when you do sales job you have to go and go around town and you know work very hard not necessarily okay there are some industry you just sit there and people come for you uh and all you do is you check them whether you should sell to them or not uh um due to their background you like them or not if you don&#39;t like them I go not not until that okay not until that but um you get what I mean okay you get what I mean okay um product [Music] positioning so um the product that we are producing is actually sering spe okay so like I said series spec is a is a copy from Bri standards so before series started we use Bri standard so that&#39;s why in every P Bri you see you see BS BS stands for Bri standard um so our p is follow the British standard uh accept the thickness okay so British standard is sorry Ser is having about 3 ours iser um or we call it commercial quality okay not sering quality Comm means it means the quality that the market is looking for so commercial quality uh and uh most of our P so to non government project okay like those terce house construction um um when um uh like this um long time ago when this uh sat Malaysia project they have they they trying to help the gong and the long houses to channel their rain water into a tank this where the time government sell a lot of tank right blue color tank B BL they so how do they want to accumulate the water from the tomu of course you need a rain water C and the pipes but the pipes is that pipes that we are producing so um of course the the high rise like condo hotels um they will require a sering specification that means the the ticker pipes uh okay uh the next one is rural area application uh long house comp water R application or sometimes um um the pon construction they they actually build a retaining wall um so they they need the rain water to pass into the drain so they use the PIP because is really non critical okay okay Plantation Farm water channeling grinage hydroponic I say Hydroponics oh palm oil Plantation palm oil plation um thank you I think that&#39;s pretty much underground Rin water okay four piece uh product price promotion and place um I think uh in in our line of work um because the customer that we are dealing with are repetitive customer that means they only they buy again and again and again they buy every every month okay I like um hand handon right how many times you buy uh in in 5 years maybe two times you buy but in our work or customer will come maybe every day or somay will buy once a week so so each time they buy they will keep asking for Discount okay so oh you is cheaper okay I buy from you oh no this time you are not cheaper there he is cheaper so I buy from you so so that means our strategy is really the price once you drop the price the demand will start pouring in until someone cannot C so so of course we have to balance between the price and our product because uh the product our production is fixed 24 hour we only can produce U 1,000 pieces so if you want 10,000 pieces you got to wait 10 days maatic mathematically speaking so uh if I deliver you uh 10,000 pieces how about other customer cannot not not enough allocation so we have to balance the price and the the demand okay in this case like what I said our product is very buky so our competition from West Malaysia and overseas is uh not intense okay uh due to highly time and high shipping cost we have a lot of customer like this morning call afternoon pickup okay so it&#39;s like one day late time if you buy from West Malaysia you buy one container um you order today next Monday you can get if you order during Christmas time maybe the container will arrive after Chinese New Year because from Christmas the shop the pot will be contested all the way until after CH be and and the guy they will prioritize the delivery okay so once if if you ship food food will go first okay because food got expired or pipes it&#39;s not expired so they will P the pipes uh uh so they will not allow the container to be processed okay in this case um price okay product price um okay promotions uh actually in our line in our industry there is no much promotion but um sometimes when there is customer complaints when they they are not satisfied with the products that uh we have uh we will tend to give them a little bit of discount in the other day so that&#39;s about it um this happened about three weeks ago when uh due to some sensor uh issues so the pipes that we produce we&#39;re supposed to produce uh 5.7 M 5.7 Z M but uh two weeks ago due to the sensor error we only produce 5 68 okay so about 2 cm sh is about this this much shorter okay shorter and it&#39;s like end of the war for the customer you see for us it&#39;s like okay just CM just take it out you know but to them it&#39;s like no no no this is this is substandard this is you will try to trly Quality okay okay okay whatever you want to say I give you discount okay okay okay so later I measure I in the percentage of okay 2 cm over 5.7 M that is 0.4% shorter 0.4% shorter how to get discount should I get 1% discount sounds too insulting right 1% 100 R 1% is 10 cent one ring one ring it&#39;s like it&#39;s something okay you see because uh in our customer um they are mostly a you know the all all thoughts they they they inherit their L from their father so some of the customer they have this uh superstitious think not superstitious but a traditional way of thinking so so I was thinking okay you&#39;re not satisfied with a 2 cm shter how should I compensate you I I have few thousand pieces at in the factory you don&#39;t expect me to produce another one 5.7 for you I can&#39;t you know I don&#39;t have the time I don&#39;t have the place to to store the PIP so what should I do I give some discount how much discount half% okay then I come up with a figure 0.88% U because most of our Chinese customer are Chinese so 8 sounds luck lucky right so I 0.8 so the total amount of the invoice minus 0.8% they and uh let&#39;s say 100,000 Bill 100,000 worth of Bill you about how much 800 yeah so enough for my customer to CH to B my grand Customer because because this kind of issue actually going down okay going down stream the customer complaint they wholesaler so when they sell to their retailer to the plumber the the complaint will come back if they found out if they really go and measure they will found out they will find out and they will they will complain so the 800 will be like uh a little bit of entertainment uh fee for the customer to spend okay so those are the only promotion that uh we have um and sometimes um the like last year they were not all uh Ukraine and uh Russia starting a war so they expecting the C oil price to go up so they also expecting the price to go up and the customer are very con they very um excited call they&#39;re very excited they they&#39;re very worried some they say the price going up I want to stop time my price can I place the order I want 5,000 pipes I said come on boss I only produce 7,000 pipes a month you want 5,000 pip that is half of my productivity how about other customer cannot I cannot give you that much but I can give you U 100 pieces or 500 pieces so those are some of the promotion because our customer know the the sentiment outside so when they know the sentiment outside they know what it&#39;s going to happen happen to the price to the pipes that they are buying every year and there so we cannot say no we can&#39;t we have to b a little bit so those are some of the promotion that uh uh it&#39;s not hard and fast rule but uh it depends on the relationship with the customer and how how long they have been buying product we have customers supporting us since the first day seven years um or maybe 10 years so we have to take care of that we we have to make that happy even 0.8% may not sounds a lot but it it sounds lucky okay I don&#39;t believe it but some people believe it so as long as customer is happy it&#39;s okay the next one is uh place okay because the pipes is very b key so a lot of our customer they they don&#39;t have enough because they not enough place to store the pipes if they want they really want to store pipes they might need to rent a warehouse which incur addition rental so a lot of time they just do inent order they don&#39;t want to keep stop so whenever they have an order they will call me they will pick up from us and they&#39;ll deliver to the customer sounds easy so they they don&#39;t have place to Sol but of course those more serious customer they really serious into the business they will buy a lot and they will stop because there are days where price going up so they buy a lot from us in cheap price they later they&#39;ll sell um in higher price so they make more profits okay so if there has a to store the pipes this is the advantage of course it can go reverse if the if the price coming down okay and they have problem if they St too much and they they have to give discount so they&#39;re making small profits so it go both way um but of course um most of the time having a place is Advantage okay it&#39;s Advantage to their business okay usually they will so um if you have uh chance um okay probably you don&#39;t I also don&#39;t have if you have if you are buying a stock market okay you invest in the bus okay so you can go into the company and you can look into their financial background you will realize that a lot of company met lots of profit during the co time right we are making profit but not as much okay because we buy and suddenly Co lock down a lot of price going up okay t a lot so all the all the uh raw material that we have we&#39;re actually selling at much higher price okay um Construction Construction company uh factories of course like uh company like ging uh they one cannot G hotels shopping mall those are making big loss but Construction Company factories they are like if you read a report about Pro they make tons of money okay during the co time because shortage sometimes is uh cheap shortage the you know you want to buy BR you book the model for one year so and uh anyway so place okay place to store the spare parts so they store in the cheap price so when the price goes up then they sell at the higher price so they make profits okay uh think that&#39;s about it thank you any question uh how do you set the price for the product this a good question um do you have time yes yeah yes okay 15 minutes um this is a good question um when we first started I&#39;m not coming from the pipe industry okay my prev broker okay i s stock I was an engineer so I&#39;m not a specialist in pipe selling so I don&#39;t know how much to sell okay seriously so when we produce the pipes and we ask our customer hey how much are you willing to buy from am nobody is going to tell you you ask the competitor going to tell you how much they selling right so we have to make a guess so how do how do we do it I got 10 potential customer okay I sell this P at 10 R for you you buy then next you i s at 11 R you still buy okay 11 is still correct one me guess I said to the third one 15 R oh he not buying okay 15 ring is wrong so the price is between 11 to 15 so as the fourth customer I put a price of 13 ring and he buy a little bit so probably the 13 R price is correct so I&#39;m making a guess and in the midst of making these guesses I actually offended a very big customer and back then 10 years ago and he is still my uh I don&#39;t quite enemy but um what do you call in ches Chinese he just he just want to me all the way because of the rivers rivers yes it&#39;s a very Fierce Rivers UN today um um you know why okay because he is the second customer so i s you he&#39;s the Third customer I sell you 10 R you buy I say you buy and the big customer come I sell you 13 R and he buy and then Lo and beh I I forgot my invoice okay I like invoice at his office and he saw how much i s to him he said he bought one piece you s him 10 he buy 100 piece I sell 13 R and he get angry you know what I mean so he become a very he had me at the same time he liked me very much because I have the product so up to a point he he cannot he s and he go buy machine and he and since then he me so it&#39;s a very costly mistake uh but uh it&#39;s very uh exciting getting to know so every every everywhere uh I mean every customer I sell he wants to sell every ring I caugh he caught 50 Cent so said okay fine let it be but this is price guessing but of course um um sometime when when we we get um we met more friends in the industry people will tell people give you a hint okay so from there you you you get price setting is a very headache uh uh things to to do um but of course um most of the price didn&#39;t come from raw materal once you get the The Benchmark right so the rest of it is just a fluctuation of the raw material exchange rate and then from there you factor in do I answer your question thank you anym and so if like if the competitor and you you as a manufacturing like manufacturing as sell 10 R and Manufacturing B Sals at ring so you guys are like reverse rever rival yeah rivalry like go like helping each other for Discount anything like it&#39;s part of like partnership is it no it&#39;s not a partnership it&#39;s a competition oh because it&#39;s just like you you shop for for uh for um it&#39;s just like you you go shopping your mother go buy vegetable all this Market is 50 c this apple this is cheaper so you buy from cheaper one so usually that&#39;s what happen so so um like this funds I mean like suddenly one month you see the sales drop customer running away then you probably you can guess why because somebody else is cheaper C run away so how how you deal with this issue um okay um those who have uh Market intelligence like you make more friends in the market you can ask around and somebody will give you a hint and you can just uh walk that out another way is uh you just reduce the price and make so if your sales come back then then the The Price is Right if the sales doesn&#39;t come back next one you drop again again and again and again yeah because because I wondering is the Press drop drop Bing right is because you need to cover your raw materials and your the the the vocal salary everything yeah uh of course there there is the uh threshold that you cannot go below that because there the your cost and anything above that is a profit so you can just drop your price until you your profit is getting smaller and smaller that&#39;s it of course nobody want to sell at L right but this guy competitor who who rival me for 10 years I I know there was a time 5 years ago he sell at L just because he want to beat me he want to he want to gain a market share okay and and he want to like whatever he want to call it so he said below I know it because this price that my customer show me we cannot do okay we cannot sell at this price this is below cost already be in mind I mean I&#39;m from engineer background so all the machines the factory is run at very high efficiency so with a high efficiency means low cost you spend a small amount of cost you can produce a f high efficiency um so our Factory is already at high efficiency and we can and I think this price is too cheap is it under Economist or scale again economic of SC is like in a like you in a you you make a lot of production in a lower cost you mean who the competitor I mean you um yes of course the the more you produce uh the cost the the lower the cost okay but of course there&#39;s a limit um like for us our limit is 24 hour so we have to stop the machine because the stuff need to rest uh so our our our limit is uh 12 hours but for some other Factory limit is maybe 48 hour we for us is uh someone to say 48 hours 48 48 hours stop yeah they are not stop but ours is we stop 4 hour we divide into three session so 24 hour we stop another 24 hour stop 24 right yes so uh do you think uh it is wise to keep the prices cheaper always to have keep your customers like keep the prices cheaper so that you don&#39;t L your this a good question um in the beginning of our business we actually sell because we don&#39;t know what&#39;s the price you see we don&#39;t know what&#39;s the market price so we sell actually we actually sell very very low until our competitor telling us you are selling to another competitor not not this uh this another competitor say I&#39;m selling too slow I said sure I know I&#39;m selling very very low do you give me your price I can check it out I can increase the price Follow Your Price He refus to give me so if you don&#39;t get me I just sell whatever price I feel it&#39;s right right so um let&#39;s say one piece of 4 in that is pass around one piece is um he&#39;s selling 25 R I&#39;m selling 20 R 5 R differ so so he&#39;s telling me that I&#39;m selling too cheap so you tell me how much you are selling so I will follow you don&#39;t want because if you riew his price to me he&#39;s losing right so of course his price to his customer is his secret so if he review to me his his selling price he&#39;s selling 25 I&#39;m selling 24 he still lose but if he doesn&#39;t come to tell me and selling 20 he&#39;s also lost so either don&#39;t way he he&#39;s not going to win okay that&#39;s that&#39;s the first thing okay and um so we have been selling uh price very very very cheap for a long time and up to a point the C time I think Co time make a lot of people realize a lot of things about life okay so before I was younger so don&#39;t you you you sell uh this price I sell 5 cheaper a lot you know people talking about 50 Cent cheaper it&#39;s already can get a market share like one is 20 r one is 1050 it&#39;s already cheaper so I was selling much cheaper and and when comes and um he start thinking point of uh working so hard you know and having a small so small as an entrepreneur okay I&#39;m not talking about uh the the stu um he said working so hard you f f f f fight and then make a small profit and after Co the strategy changed I said um I don&#39;t want to prod so much and sell so much and make small profit I want to produce a little but sell higher so that my life is better you know because the more you sell the more complaint you&#39;re going to get it&#39;s proportional the complaint comes back is proportional so you sell smaller quantity but you with a better profit margin then the life is easier is less stress in this way do I answer your question yes sir any other questions that you want to ask uh uh do you do any uh promotion uh to attract customers new customers new customers yeah um there are two points to your answer um the first one is this Market is very small the PVC Market is very small in Kuching so most of the customer I already know oh so if there&#39;s a new customer who claim that he&#39;s a big customer come to me uh usually are fake like like what I share with you a guy who come and then he give me a name card he want to place a big order and L I found out he&#39;s a scammer so I know him okay so this the first one so the second one is this is a seller Market okay so when customer comes usually customer will come to me oh we don&#39;t go out to the street and me like that we don&#39;t do that on and off I I receive a call from stranger the inquiry they will come so most of the customer who we don&#39;t know we will sell in cash that means we will collect the payment when the good is delivered but for those customer who are we know we deal with long times who will give you 30 months 30 days uh payment terms or 60 days payment it means we allow the customer to H down to all for 60 days or 30 days depends on um our comfort okay our feeling um I must say I must say um in this industry a lot of decision is made based on feeling okay I&#39;m coming from a technical person a very technical person a lot of things happen customer complaint pricing 0.88% uh you know shorter by half uh it&#39;s not a feeling you know people don&#39;t feel right they they they they receive the PIP they feel that this p is inferior in fact it&#39;s not the feeling is Disturbed so what we need to line up is the this is in our in our life work okay so promotion is also part of the J feeling of the customer something I so basically you have plenty of customers but not a huge uh Market but then those are your loyal customers who always come again for the products basically repetitive custom repetitive yes our our customer base is not big we only have a few very few selected on but they they are in need of products okay so the is uh for loyal customers only um not necessarily but most of the promotion is given to a loyal customer as as a appreciation of their loyalty okay okay thank you but noway there&#39;s no loyalty they will go they will just run away the moment they figure out other people price is cheaper go but of course we still want to dig out certain amount of loyalty from from them and reward them to make them happy okay yeah I think it&#39;s all yeah thank you

Transcript for:Insights on PVC Pipe Manufacturing

Transcript for:
Insights on PVC Pipe Manufacturing