Sauce maker Salmi to sell on brand

FOR local soy sauce producer Syarikat Salmi Hj Tamin Sdn Bhd, the uptrend in oil price has not made a very big impact on the company, but managing director Datuk Mior Idris Mior Jaafar said that in the long run, it would.

However, he does not see this as a hopeless situation. He is confident of the growth of the economy following the Government's launch of numerous giant projects that attracted foreign investors. This, coupled with higher spending power, presents an opportunity for further expansion.

“We should be proactive to maintain our positive brand identity and be willing to change with the times,” he said.

The company, with its Tamin branded products, is a survivor, having existed since 1951.

Datuk Mior Idris Mior Jaafar with some of the company’s food products

Recently, it faced one of its tests for survival. “The recent oil price hike caused our production and logistic costs to surge by more than 30% compared with two or three years ago,” Mior Idris said.

“It lowered our profit margin; thus we had to increase our selling prices by 10% to 13% in July,” he said, adding that the company had not hiked its prices for about eight years.

Senior manager Wan Khatijah, 26, who is Mior Idris's daughter and would-be successor, told StarBiz at its head office and plant in Kuala Kangsar, Perak, that the company was focusing on both production and marketing to meet the challenges.

“In May, we won Government tenders and started to supply our products in August to the Defence Ministry, Finance Ministry and Home Affairs Ministry, as well as prisons and hospitals,” she said.

“With increasing demand and Government contracts, we anticipate to record about 30% increase in revenue from this year onwards.”

The company forecasts to hit RM15mil in revenue this year compared with RM11mil last year.

Wan Khatijah said the growth was also due to the company's geographical expansion by appointing more agents in each state.

It now has one distributor each in Kelantan, Terengganu, Johor, Sabah, Sarawak and Brunei.

Wan Khatijah inspecting the packaging section of Tamin soya sauce products at the company’s plant in Kuala Kangsar, Perak

“We will continue to penetrate the government market and strive to increase export volumes,” she said, adding that exports contributed 3% to its total sales.

Currently, Syarikat Salmi distributes 70 types of halal products, of which 75% are produced by the company while the rest are made by third party but with Tamin's packaging and brand. The latter products include include salt, asam jawa (tamarind), bihun (vermicelli) and crackers.

Syarikat Salmi produces soy sauce, oyster sauce, chilli sauce, tomato sauce, taucu (salted beans), vinegar and filtered drinking water.

Tamin products are exported to Japan, the Maldives, Vietnam, Brunei and Singapore. Ireland and Bangladesh are its latest export markets.

Locally, its products are distributed to agents, retailers, shops and over 240 hypermarkets and supermarkets, including Tesco, Jusco, Carrefour, Giant and Econsave.

Wan Khatijah noted that for its future expansion, Syarikat Salmi had recently purchased eight acres next to the existing 2.5 acres on which its Kuala Kangsar plant is located.

The company is in the midst of upgrading its production facilities in Kuala Kangsar and Batu Gajah, Perak.

In 2003, it invested RM3mil to upgrade and replace its facilities to improve production capacity, Wan Khatijah said.

“Maybe in three years, we will manufacture more food products, including coffee powder, jam, drinks, spices like curry powder, and canned food,” she said.

A marketing and management graduate, Wan Khatijah feels that branding is important to bring brand awareness to consumers, especially the younger generation who may not notice this decades-old brand.

The company has been active in advertising and promotion activities, including on-the-ground promotions in hypermarkets and supermarkets.

It also takes part in road shows and some local and international food exhibitions.

“In addition, we will allocate about 5% from our revenue every year for research and development to improve the quality of our products,” she said.

Syarikat Salmi was founded by Mior Idris's father-in-law Mohd Tamin over five decades ago in Batu Gajah with a capital of just RM10 (to buy woks and pots).

With the help of his family members, the “cottage factory” behind his house produced about 700 bottles of soy sauce per day.

A year later, the demand for Kicap Tamin grew beyond expectation as the products were well received by housewives and consumers within the neighbourhood.

In 1974, the company bought a piece of land each in Kuala Kangsar and Batu Gajah where its plants are now sited.

In the late 70s, the company rented a double-storey shop lot in Gombak, Selangor, for its warehouse. In year 2000, it bought a warehouse on 1.5 acres in Sungai Buloh.

Today, the Kuala Kangsar plant has a daily capacity of 80,000 bottles of various products while its Batu Gajah plant produces 20,000 bottles daily.

With the company's aggressive marketing exercises and expansion plans, Mior Idris expects demand for its products to double within three years.