Eager to turn the company around, Teong brought in new ideas and tried to change its work culture and uplift morale among its 200-odd staff. However, unimpressed and having little faith in what he wanted to achieve, some shareholders dumped their stakes to minimise losses.
Within two years, like a phoenix rising from the ashes, GDex began to show profits and has since positioned itself as the dominant player in the mid-segment by developing customised logistics solutions and working in partnership with the “big boys” of the courier industry.
Appropriately, late last year, the Mesdaq Market-bound company won the Phoenix Award, which is given by the Small and Medium Industries Association of Malaysia to companies that displayed notable successes in turning around an ailing business or recovering from a major corporate and financial crisis or setback.
“The founder of GDex and my friend, Yong Phee Long, allowed me to take a majority stake of slightly more than 50% in the company. Some of the shareholders who did not believe that the new management methods would work sold their shares, preferring to cut losses.”
“Those who stayed on with us are seeing the results today,” Teong tells FinancialDaily . He says the innovation of customised logistics solutions brought the company lucrative deals with Federal Express (M) Sdn Bhd (FedEx) and DiGi Telecommunications Sdn Bhd.
FedEx outsourced its domestic delivery services to GDex in late 2002, and the revenue generated from services provided to FedEx raked in RM1 million for financial year ended June 30, 2004. GDex delivers point of sales materials to DiGi and hand phone sales outlets nationwide.
“The courier industry’s annual turnover is RM1 billion, and there are great opportunities for growth for local companies. But the level of success is dependent on how they develop their business models,” he said.
“Our current market share is 4%, and we anticipate by next year, we will have 5%. Our major domestic competitors are Pos Malaysia, Nationwide and City Link.”
Teong says 97% of GDex customers are institutional or corporate bodies, with the remaining 3% being retail clients.
He believes many of the country’s over 100 licensed courier service providers will cease operations within two years as they did not have the capability to compete with larger service providers.
“These are companies in the mass market, and they reduce their prices to compete with each other to a level where it will not be possible for them to continue operations.”
He says GDex has survived the stiff competition and made profits by ensuring customer satisfaction, improving physical and virtual infrastructure, and focussing on employee development.
On its listing exercise, Teong says a bulk of the estimated RM10.50 million to be raised from its initial public offering is set aside for upgrading its courier processes and network development. It expects to list on May 17.
It is offering 35 million new shares of 10 sen each at 30 sen per share. Of these, 28 million shares are allocated to identified investors by way of private placement, two million shares for the public and five million shares for directors and employees.
Teong says while the industry is gearing up to a technology-driven environment, what sets his company apart from others is that it combines old methods and new ideas.
“After my management team took over in 2000, we focussed on improving services and delivering on time. These were achieved by improving our network services and reducing damage or loss of goods from 1% in 2000 to 0.02% presently,” he says.
The ISO 9001-certified company has a daily shipment volume of between 13,000 and 15,000 consignments, of which 9% constitutes international deliveries.
The company is forecasting revenue of RM43.62 million for the year ending June 2005, against its RM29.50 million revenue and net profit of RM1.60 million in 2004.
“The company ran at a loss until 2002, but we managed a turnaround. Our partnerships paid off well, and we intend to leverage on our strengths in that sector,” Teong says.
He says the company emphasises continuous education of its 850 employees and even has a scholarship scheme, alongside its training schemes for employees.
“In the last three years, we have had more graduates joining us. We place importance on ensuring we have competent staff developing our customised solutions and maintaining vehicles.”
“Experienced ground staff are promoted to higher positions, like the driver who was promoted to manager of transport. We also have in place incentive schemes for our documentation staff and couriers, so they are motivated to give their best,” Teong says. He says GDex employees on average earned 20% higher wages than what is commonly paid within the industry.