In 2022, LH Plus Sdn Bhd will be celebrating its 75th anniversary or its diamond jubilee. There are many lessons that can be learned from its storied history but looking back, it can be said that its secret to success lies in their investment in LH Plus’ most important asset: its people. In making sure each member of their staff is well taken care of and to always do the right thing – going so far as to make it a company core value – LH Plus rides high in Malaysia and overseas. Their story begins in a post-World War II Malaysia in 1947.
A blue ocean strategy
After World War II, there was a period of economic recovery for Malaysia and the ensuing wealth and accessibility meant that people were in a hurry to get to places. Since cars were rare and reserved for the wealthy, bicycles were the main mode for transportation and with a proliferation of bicycles, came a demand in the market for bicycle parts. Chen Kow Fatt, the founder of LH Plus saw an opportunity as there was a shortage of bicycle stands but the true innovation for the business was the way in which they sourced for materials. The late Chen found an outside-the-box idea of converting scrap iron into bicycle stands using a simple jig.
Over time, adopting a blue ocean strategy allowed LH Plus to scale quickly into the plastics market at a low cost, with existing raw materials. As an anecdote to the kinds of innovation of the early LH Plus years, the company managed to produce their signature one-of-a-kind diamond-cut reflectors with an unlikely raw material: red combs imported from Hong Kong and Singapore. The following years saw more innovation for LH Plus in the plastics industry, such as the creation of their first handmade plastic injection moulding machine called a monkey machine. This allowed Chen to ensure the quality of his products.
The company expanded into new business areas when the late Tony Chen, Chen’s eldest son returned to help the father in 1969. Like his father before him, Tony looked across the industry for new blue oceans and found it by riding the waves of fledging toy market in Malaysia. Tony’s first project was to manufacture little plastic toys for snack producers to be inserted into their snacks in Malaysia. This paved the way for LH Plus to enter the high-competitive American toy market in 1990.
LH Plus 2.0
Keeping things in the family has always been the focus of LH Plus and Chen’s successors, Tony and CEO Callum Chen successfully brought about a new era to the business.
In the 70s, Tony set his sights at the toy market and employed modern machinery from Japan as part of his expansion plan. Callum began the company’s ventures officially into the global stage with clients like Mattel Toys, maker of Barbie Dolls and Little Tikes. Securing the global portfolio was crucial to LH Plus and they can count the intricate heads of Barbie Dolls as one of their shining achievements as the heads are delicately produced with high precision spray painting to the highest quality checks by its American partners.
In 1990, the company expanded into an overseas market for the first time, namely, Australia. Exporting its homewares to Australia brought with it many learnings for the company as well as additional revenue and today, LH Plus continues to explore cross-border opportunities. Riding on this global partnership, LH Plus also secured a deal in 1992 with Rubbermaid as a Tier-1 supplier for the world’s largest consumer goods plastics company and even became the sole supplier for Rubbermaid’s food services division in Malaysia.
That said, none of this would be possible without preparing the next generation and preserving its most loyal staff. LH Plus, today, is vertically integrated from design and engineering to mould making. They work with global brands in the US and Europe and major retailers in Japan. They are ISO certified and a member of SEDEX, an organisation that provides one of the world’s leading online platforms for companies to manage and improve working conditions in global supply chains.
Believing in people
LH Plus has remained a family-owned business for the past 75 years and succession planning is an on-going endeavour by Callum. The company believes in people and employees are given career opportunities to move to bigger roles. Promotions are based on capability, merit, and abilities. Although a family business, children of the Chen family have never been asked to join the company and 90% of the head of departments are non-family members.
As the company grows, so do their senior staff who have been with the business on average for over 15 years – its longest serving being forty-three years while some of them have retired. Callum shares his thoughts on the matter, “We always value our employees. We firmly believe in the people-before-profit philosophy, and this will remain our fundamental management principle.” Not one to lord his position over others, Callum can be seen on most days greeting his team around the factory and the offices with his staff gladly returning his gestures. With a firm backing from their people, LH Plus is poised for growth, and are looking ahead past this pandemic.
Forging ahead
Being a 75-year-old company comes with its shares of ups and downs. For every new venture the company has embraced, there were equal hardships to endure. They’ve weathered two financial crises, the Asian financial crisis in 1997 and the global financial crisis in 2007, a fire that wiped out their factory in 2000, and more recently, the Covid-19 pandemic.
All these experiences have made the company stronger, enabling management to seize on opportunities. For example, after the fire, they turned a disaster into an opportunity by using this threat to unite everyone and upgrading and expanding their factory. Meanwhile, the financial crises and the health pandemic taught them how to manage cash flows through relationships with banks as well as how to negotiate better terms.
Looking forward after these setbacks, LH Plus is looking to grow further and stronger with automation, renewed partnerships, and opportunities. LH Plus is one of the early adopters of Industry 4.0 and have slowly replaced their older machines with newer German-engineered Demag hybrid injection machines. All of these initiatives have prepared the company well for their move into products for the medical industry.
Pursuing growth and learning and thinking outside the box are both LH Plus’ core values and it’s reflected in its automation innovation. With support from the Malaysian Investment Development Authority (MIDA) under the Domestic Investment Strategic Fund (DISF), Accelerated Capital Allowance (ACA), Smart Automation Grant (SAG) and Industy4WRD schemes, the company has successfully embarked on automation that reduces its assembly workforce by 80% while increasing the production output by 300% with higher quality and yield.
This enhancement translates into massive savings in the long term and also ensures consistency and its next transformational goal is to bring their company public. By doing so, it will lift LH Plus to the next level in hope of becoming a bigger player in the Malaysian industry.
