Alex Lau and Charles Ong started a company to help the environment at a time when the industry was still budding. Last year, their venture earned revenue of $2m
Ong Bi Hui, Straits Times 28 May 08;
BACK in 2002, when the green energy movement had barely sprouted, platoon mates Alex Lau and Charles Ong conceived a business plan during reservist training in a forest in Lim Chu Kang.
They were inspired by the sounds and smells of the forest to set up an enterprise that would help the environment.
Both men were also driven by a desire to leave their jobs as civil servants to set up their own firm.
Today, that plan has materialised into Anacle Systems, a local company that specialises in green technology and energy optimisation for buildings.
Their timing has been perfect, considering the rapid rise in interest in all things green. Indeed, Anacle is now on the cusp of expanding overseas.
Mr Lau, 35, admits with a laugh that although green energy is the flavour of the moment, their business probably sounds a little dull.
'I know our business is rather boring and we are dealing in relatively esoteric stuff, but basically what we do is help businesses cut down on energy wastage and save on power bills.'
Joint owner, Mr Ong, also 35, is equally self-deprecating: 'We know that we are a boring business, but Warren Buffett himself said that he invests only in boring businesses.'
Anacle was set up in February 2006 but came into its own only last year, when it attracted more than 20 new customers.
It posted a 23 per cent increase in profits to $300,000, and generated revenue of about $2 million last year.
It has also worked with many big names, including Sentosa Development Corporation and the PUB.
Entering a budding industry
WHEN they hatched their business plan, Mr Ong was still a civil servant with the Defence Science and Technology Agency while Mr Lau worked with the Ministry of Defence.
They were armed with chemical engineering degrees, contacts they had built up from years of working in related industries, and experience gleaned from stints with various companies.
'We set out to start a business that we felt would be socially responsible, as well as related to what we had been doing for the past few years,' says Mr Ong.
Mr Lau adds: 'Moreover, one of the reasons why we entered this market was that the industry was still budding and, hence, we would have little competition within Singapore and even in the region.'
Despite the pressures of setting up a new business, the two men remain good friends both at work and outside working hours.
They run different aspects of the business according to their strengths. For example, the more gregarious Mr Lau handles public relations while meticulous Mr Ong is in charge of operations and management.
Surge in green awareness
MR LAU says that while they had long seen the potential of green technology, they had no inkling then of the sudden surge in the sector's popularity brought on by awareness of climate change and especially rising oil prices.
According to his 'conservative estimate', Singapore's green technology market is worth at least $200 million to $300 million a year.
With oil prices having breached US$135 per barrel, energy conservation is becoming increasingly important to many companies.
Anacle helps companies save on energy bills by looking at inefficient aspects of a building, such as air-conditioning units that vent to walls, or heat-trapping sources like glass enclosed spaces. They then recommend solutions to help cut down on electricity use.
One such solution would be pre-cooling a building in the early hours of the morning. This allows it to retain the coolness throughout the day without the need to have its air-conditioning switched on during the entire working day.
Green technology is a key part of the business but Anacle has other strings to its bow, which helps the company to boost its bottom line.
'Asset management, which is ensuring that customers' equipment does not fail, still makes up at least half of our business,' says Mr Lau.
Looking beyond Singapore
THE two men say an important contributor of their success is having a strong business plan, and the fact that they were able to take this blueprint to government agencies to seek vital start-up funding.
They first received funding of $250,000 from Spring Singapore's Start-up Enterprise Development Scheme, an equity financing scheme that meant that the duo did not have to fork out a single cent to start their company.
Though small, the company has had no problems getting industry recognition. It bagged an Asia Pacific ICT Alliance Award for Industrial Applications last year, because it was the only participant in that category.
Anacle is now looking to the international market. Mr Lau says: 'As much as we had an easy start, like many businesses in Singapore, the crucial step for us is to make the transition from an SME to larger things.'
Anacle is currently looking to enter the more mature markets of the European Union, Japan and North America, and has already set up an office in California.
'In places like the European Union, there is a greater respect for the environment and, business-wise, companies are more willing to invest in green technology as it contributes to their brand image. In Singapore, instilling corporate social responsibility is still a budding trend,' says Mr Lau.
'Singapore is a good test bed, but it lacks the laissez-faire environment of more mature capitalist markets that will enable a business to really flourish.'
For entrepreneurs keen on starting their own businesses, the duo has this piece of advice: 'Just go for it.'
They say the process is much easier than it sounds. But for those who want to take the plunge into the nascent green technology market, they caution that market study, data gathering and analysis are of utmost importance. They also believe in taking care in hiring staff.
'Once you get the right people into the team, the business runs itself,' says Mr Ong.
As for the duo, they are still living the dream they dared to imagine back in the Lim Chu Kang forest.
