Greenpac advises firms on the most efficient way to pack products
Gabriel Chen, Straits Times 20 May 09;
BEING ahead of the curve can be crucial and can give a start-up a sizeable competitive advantage. Just ask Ms Susan Chong.
The former marketing executive gambled that 'green technology' would eventually gain a following despite a widely held view at that time that environmentally friendly applications to business were expensive and impractical.
'I could see that green was coming along the way,' says Ms Chong, who founded Greenpac about seven years ago.
Her firm helps companies evaluate the most efficient way to pack their products.
'When we first started, nobody talked about being green, but somehow you knew that being green was the way to go,' she says.
The 39-year-old entrepreneur, who calls herself a 'green person', recalls that seven years ago, a lot of companies, even those hailing from the high-tech medical and electronic sectors, did not focus on packaging.
They sought to get their products out fast and proceeded to dump them into a box, but this proved costly when the products they delivered ended up being mishandled - sullying their reputations in the process.
Greenpac's business model is simple: It looks at how to pack more products in a shipment - 're-engineering' as Ms Chong calls it - to help save on logistic costs.
For example, it could involve changing the material used to ship the equipment so that the customer can send more pieces in each box.
It could also involve changing the combination of wood used in the crates to make the package lighter and so bring down transportation costs.
Greenpac offers advice but does not produce its own packaging materials. Rather, it works with suppliers to customise environmentally friendly packaging materials according to the specific needs of each customer.
Naturally, the raw materials that Ms Chong uses, like wood and paper, are environmentally friendly.
'We don't sell boxes, we sell solutions,' says Ms Chong, a point she makes repeatedly during an hour-long interview at her warehouse in Pandan Crescent.
Her suppliers come from Europe and United States, while her 90 customers are mostly multinationals.
Ms Chong, a permanent resident who came here from Kedah, Malaysia, about 16 years ago, started her firm with a $30,000 government grant.
She soon found that one of her biggest challenges was to convince potential customers that being environmentally friendly did not necessarily mean additional costs.
'In typical business context, nobody would pay extra cents for being green. Environmentally friendly products typically will be more expensive,' she says.
Her strategy is to show customers that there will be cost savings, building up trust in the process.
She draws attention to what she calls an oriented strand board - basically, a special material from Europe that is environmentally friendly.
'This is wood,' she says, picking it up. 'This will cost more, but this material is lighter. So when you ship by air, you save on the freight. When we talk about cost savings, we talk about bottom-line cost savings.'
Her firm's services help customers achieve savings of between 10 per cent and 50 per cent on transport costs. And while much of the demand is driven by a desire to pay less, the emerging awareness of environmental issues has helped her to win new customers.
'Today, every company wants to be seen as green. You're talking about corporate social responsibility,' she says.
Greenpac's sales have at least doubled each year since 2002 while the workforce has grown from three to 20, including designers and mechanical and structural engineers who customise packages for clients.
Ms Chong started operating from a small office at International Business Park in Jurong but has since moved and now rents two warehouses - in Pandan Crescent and Tuas.
She declines to reveal sales and profit numbers.
'My philosophy is you want to make money but through a good cause,' says Ms Chong, a former marketeer for companies in the pharmaceutical and hotel industries.
Before setting up Greenpac, she had worked at pharmaceutical giant Pfizer before helping in her husband Raymond's packaging business.
'His business is manufacturing wooden crates and pallets,' she says.
The mother of four tries to be environmentally conscious at home and recycles waste materials and cuts down on unnecessary energy usage but she knows there is still a lot of scope for improvement.
'I'm not driving a green car, but moving forward...that'll be an option,' she says.
'Anything I can do to save the Earth, I'll try. My children understand global warming, what it means to reduce carbon footprint. You tell them and you nurture them.'
The economic downturn is a concern, but the slowdown in demand at her firm has been offset by more new projects secured.
For instance, some of her new customers come from the more 'recession- proof' defence and food and beverage industries, she says.
'When we started, people thought packaging was a sunset industry. They asked me why I would go to an industry with no potential. I said it's not a sunset industry.
'Initially, we're a small company, but one day we'll be big. If we stay focused and do what we're good at, eventually we'll grow. And that's what we've been striving for so far.'
