Taiace diversifies to serve more industries

Taiace Engineering CEO, Isa Ismail, shares his thoughts on the success of his company from its startup as a sheet metal outfit to becoming a diversified firm serving a larger spectrum of industry.

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TELL us about Taiace and its beginning. How and what made you establish this company?
TAIACE ENGINEERING SDN BHD was established on 16th June 1996. We started as a metal stamping tools designer and fabricator after the former company that I worked for ceased operation due to cashflow problems. I invited my friend Hairudin whom I had known for many years and as we share many common ideals, we ventured to start a business.

What is Taiace’s core business?
Taiace used to be a steel component manufacturer, supporting telecom, power, automotive and furniture industries. We decided to produce our own products since 2001. We never looked back since. We were into producing and innovating new products with quality excellence for sustainability in the challenging market. Our main business focus now is in the design, manufacturing, installation and commissioning of:
Storage Solutions and DC Power Systems for the telecommunication industry, energy-saving products and solutions for buildings and industries.

What is your academic background and training? How did it help to get you where you are today?
I am a mechanical engineering graduate from UTM. My business knowledge and experience were developed since school and university days as I engaged in part time businesses during study. Upon graduation, I venture into dairy farming for a year. I then worked as a process engineer in a computer manufacturing company for two years, before I started this business.

Where did you acquire your technology and know-how from?
I consider myself a self-learned person. I have passion in finding technical knowledge about new products or technologies through reading, research, discussion and by attending exhibitions. I always put innovation and research as priority for my business sustainability.

It is my habit to always ask myself “what’s coming next?” every three years. We managed to produce several outstanding products with this kind of thinking culture.

What were the challenges you faced in establishing TAIACE, and how did you overcome problems?
In the early stage, the challenges were to establish manufacturing machines and facilities and finding customers. We were lucky to find few idle plants for rent. We managed to secure projects with several companies. Our projects were successfully delivered and our business performance lent confidence to a financial institution which financed us as we progressed.

The second challenge was to keep afloat in between projects as our business was based on a project to project basis, and our manufacturing of products undertaken on a batch system. We overcame this by manufacturing several products for several industries, therefore if something happens to one industry or product, others can still provide us the business to stay afloat.

The third challenge is to stay sustainable as market and technology change rapidly. If we stay with just a few type of products, in five years’ time we will be eliminated as products become irrelevant in a fast changing world and as technology advances.

We overcame this by initiating new product development through our R & D department to stay ahead with world demand. The fourth challenge is funding. Most of our previous customers were not well known and considered not “bankable”. We used to run on very tight cash flow and sometimes missed paying salary and other commitments on time. We overcame this by climbing the supply chain ladder and managed to get direct businesses from big multinational companies and GLCs. Banks were confident and provided us with term loans and working capital facilities.

Which countries you have penetrated?
We have exported our products to 12 countries including the US. But the biggest opportunity is still at home. We established our subsidiary in Indonesia in 2007 and are running a 10-year contract with Muhammadiyah Group Hospital in Indonesia. PT Green Solutions Indonesia which is 100 per cent owned by Taiace Engineering is the pioneer of Energy Performance Contract projects in Indonesia. We are getting more customers and seeing bigger projected growth in Indonesia for the next five years.

What it takes to penetrate global market?
Patience and consistency. We must understand the culture, establish confidence and be very careful with whoever that we deal with. We have been in Indonesia for ten years now. Recently we managed to secure another sustainable project from a reliable customer in Indonesia.

What are your future projections, market and projects in the pipeline?
We planned to be listed via IPO and are targeting a RM50 million per year revenue by 2020.

How did MTDC play a role in the success of your company?
MTDC has been a major contributor to our business development. We were given a CRDF Grant in 2009 for our product commercialisation. MTDC once again invested in our company through BEF and BGF programmes in order to bring our company to the next level which will enable us to go for IPO listing in 2020 with higher equity value and business achievement.

What is your advice to young graduates?
Young graduates who have interest in setting up business will need to consider few factors. Business needs discipline, sacrifice, hard work, passion and persistence. An entrepreneur needs knowledge on products, cashflow management and basic accounting, human relations, marketing and communications. One must be able find a balance between Man, Machine, Money, Market and Methodology.

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