Crate expectations

Walk along the corridors of Singapore’s National Museum and you’ll learn the story of the country’s remarkable economic growth. Grainy black-and-white photos show a bustling boat quay and family-run businesses, followed by television footage of newly built factories producing all kinds of labor-intensive products.

Continue walking, and these images turn to color, showing Singapore’s busy port; large warehouses and factories producing high-value electronics ready for export.

Through all of Singapore’s changes, one constant has been the need for sturdy pallets, boxes and crates, to store and transport all the goods moving in and out of the country. While easily overlooked, these products are in fact vital to commerce; they are the backbone of modern logistics and an essential part of Singapore’s development.

Yat Guan was first established in 1931 by Lim Boon Qian, who started the business working as a one-man operation in wood salvage and wooden box manufacturing on Church Street. As Singapore’s manufacturing industry grew, so did Yat Guan, expanding its number of locations and the products it offers to clients in Singapore and abroad.

Moving forward

Today, Yat Guan is run by Managing Director Ryan Lim, Lim Boon Qian’s great grandson, and is one of the biggest providers of pallets and crates in Singapore and Malaysia. Yet Lim is mindful of the changing business environment and the need to move with the times.

“When I took over leadership of the company 10 years ago, there were a lot of historical practices still in place, so I took it upon myself to modernize our processes and the technology we used. For example, product designs were still being hand drawn, but now we have a design engineer who uses software to generate our designs,” he explains.

“This makes our processes faster, more reliable and allows us to calculate the load-bearing capacities of our products more accurately.”

Other changes Lim has introduced include an AI-optimized transport management system that calculates the most efficient routes for the company’s eight vehicles, as well as several fully automated production lines in its manufacturing site.

“It’s essential that we leverage technology to move us forward,” he says.

Another big change for the business has been relocating much of the company’s manufacturing and sales to Malaysia.

“Previously, our customers in Singapore accounted for 70–80 percent of our sales and, as a result, our production was located close to them,” Lim points out.

“Now I see more opportunities in Malaysia, particularly as operating in Singapore becomes an increasing cost center. So now I’m trying to push more for sales to be done in Malaysia. With talks of a new economic zone in Malaysia, we’re quite excited to see whether we can leverage that.”

As the company has grown in recent years, finding the right workforce has proven an enduring challenge. Fortunately, the development of the Johor Bahru–Singapore Rapid Transit System (RTS) link is likely to help address this problem.

The four-kilometer light rail track connects the underground Woodlands North station in Singapore to the above-ground terminus at Bukit Chagar in Malaysia, right beside the Johor Bahru checkpoint.

Traveling at about 80 kilometers an hour, it will complete each journey in just six minutes, with trains departing approximately every 3.6 minutes during peak hours, helping solve the long-standing traffic congestion across the Causeway.

“The RTS line will be a game changer for us,” Lim says. “Not only will talent flow downwards from the north, but Singaporeans may also begin to be willing to move up north to work. This means the talent transfer might be able to help us in both ways.”

Going green

Lim is particularly passionate about sustainability, not just for the opportunities it presents Yat Guan, but for its importance for his customers and the planet.

“Wood is a renewable resource as opposed to plastic,” he says. “As more and more people come to be aware of how wood is renewable and it can be repaired, as opposed to plastics, that will be another area of growth. Especially once the government starts to impose carbon taxes, that will make a big difference.”

To this end, Yat Guan has been developing its pallet recycling and wood salvage operations while encouraging businesses to consider using recycled wooden or plastic pallets to reduce their carbon footprint.

However, Lim notes that educating customers is a challenge, particularly when sustainable options may come with increased costs. For example, wood sourced from forests certified by the Programme for the Endorsement of Forest Certification (PEFC) typically costs more than wood sourced from non-PEFC forests.

“Using wood from PEFC sources doesn’t come for free; there are costs involved. But on the other hand, you know that your product is sustainable. The challenge is that many companies look for the lowest cost packaging, and sustainability is not one of the most important things on their minds,” he reflects.

“I believe this will change over time with greater government enforcement, education and pressure from consumers, but it’s not going to be easy. Our biggest challenge is to nudge multinational corporations into recognizing that profits and purpose are really the same side of the coin. That sustainability need not come at the expense of their bottom line.

“If our children are going to have any future on this planet, we really need to make sure that everyone acts now, and businesses have a very important part to play in this.”

Reputation for reliability

For a company that’s been operating for nearly 100 years, Yat Guan prides itself on being a reliable partner for both its clients and suppliers.

“Our long-term business relationships have endured through all sorts of crises, both natural and man-made,” he asserts.

For example, during the COVID-19 pandemic, many of its customers found their orders being held at the border. But thanks to the efforts of Yat Guan’s team, they were able to quickly get exemption certificates from various government bodies and get materials moving again within 24 hours.

During this period, Yat Guan also found a lot of customers arriving at its premises requesting products at short notice. Unfortunately, it was unable to serve them because the company was already busy fulfilling existing orders, but Lim believes this was a wake-up call for potential customers.

“That’s when they realized they needed a really strong service provider. They were calling on us because their existing suppliers had let them down, and they needed somebody who was able to service them during times of crisis, not only during good times,” he says.

“Once the crisis was over and production flows went back to normal, a lot of the customers who contacted us during the pandemic came back to us and became clients. They realized that paying a little more to work with a company that could ensure business continuity was more important than trying to find the lowest cost every time.”

Yat Guan has cultivated a similar reputation with its suppliers.

“Our suppliers also come to realize that we mean what we say and that once we provide a contract with them, we honor it,” Lim explains.

“So even in times where we are overstocked, we’ll still honor the contracts we have with them and they’ll continue to supply us. That means that even during the bad times, they realize that if they want to maintain this relationship where the materials are short, they will still prioritize Yat Guan because of that long-term relationship.

“My father taught me that in business, it matters more about how you buy than how you sell. Selling is a very short-term affair because many customers will often just look for the lowest price, and whether customers make subsequent purchases, that’s a separate question.

“Instead, knowing where you buy and how you buy is more critical; that’s a part of the philosophy of Yat Guan – prioritizing long-term relationships over short-term transactional exchanges.”

Leadership lessons

Before becoming the Managing Director of Yat Guan, Lim worked as a teacher for seven years, an experience that taught him the importance of leadership and lifelong learning.

“Singapore’s Ministry of Education pushes all its employees to continually develop themselves,” he says.

“During this time, there were two books that really shaped the way I think about leadership. The first is Wooden on Leadership: How to Create a Winning Organization by John Wooden, who was a basketball coach, but I see him as more of a philosopher on leadership.”

The book emphasizes the importance of fundamental values such as industriousness, loyalty and self-mastery, as well as the significance of mastering the basics, maintaining personal integrity and fostering continuous improvement.

Thanks to this book, Lim believes that by focusing on teamwork, thorough preparation and a culture of lifelong learning, leaders can build a unified and principled organization poised for enduring success – a vision he applies to his daily work.

Lim’s second book is Good to Great: Why Some Companies Make the Leap… And Others Don’t by Jim Collins, which identifies the key factors that enable companies to transition from mediocrity to sustained excellence.

Central to this transformation is the concept of ‘Level 5 Leadership’, characterized by leaders who exhibit personal humility and professional will – two qualities that Lim exudes.

The book also emphasizes the significance of a ‘Hedgehog Concept’, which involves focusing on what the company does best and a culture of discipline that combines rigor with creativity. These principles, along with the idea of a flywheel effect – building momentum through consistent, incremental progress – provide a blueprint for achieving long-term greatness.

New opportunities

When it comes to Lim’s own leadership style, he says he’s not sure how he’d describe it.

“I think the best way would be to say professional, yet at the same time family-orientated, because we are such an old company. A lot of our staff were in the company while I was still a baby,” he says.

“Our oldest employee is 76 years old, and he’s still working in the company today. We keep our staff for as long as they’re willing to work and contributing to the company, we’ll hold onto them. We have this kind of relationship with each other. Yet, we don’t allow that familial bond to take precedence over the need to remain professional and behave the right way.”

This stance is strongly aligned with the lessons taught in Collins’ book, which argues that the most critical step for a company aiming to transition from good to great is to focus first on getting the right people on board. These are people who are not only skilled but also aligned with the company’s core values and culture.

Once the right individuals are in place, the organization can then determine the direction it should take, leveraging the collective talent and commitment of its team.

This approach ensures that the company has a strong foundation of motivated and capable personnel who can adapt to changing circumstances and drive the organization toward its goals, regardless of the challenges faced.

Thanks to Yat Guan’s solid reputation and loyal employees, plus Lim’s vision for business expansion, technology and sustainability, it appears the company is prepared for continued growth, ready to support Singapore and Malaysia’s thriving businesses, however the market shifts.

With the growing focus on sustainability, the potential for carbon-related taxes to be introduced, and the forthcoming RTS rail link between Singapore and Malaysia, Yat Guan is well positioned to take advantage of upcoming developments.

“As a company with nearly 100 years of experience, our customers and suppliers can be certain that we’ll always be here for them through good times and bad,” Lim says. “We are always looking ahead for new opportunities, and I’m really excited about what our next chapter will bring.”