SUBANG JAYA — Cleaning solutions manufacturer Kleenso Resources Sdn Bhd is looking to break the seven-digit ceiling in sales this year, and is expecting revenue to hit RM10 million in 2017, up more than 30% from the RM7.4 million recorded in 2016.
Speaking to Malay Mail in an exclusive interview recently, founder and managing director Lee Teck Meng said: “Every year we are seeing sales increase 15% to 20%, but this year we are looking at even more at over 30% as our distribution network has stabilised and many places are now selling our products.
These RM10 million sales are just Kleenso’s wholly-owned floor detergent business, and does not include its car care and pest control products, which would take total sales to between RM25 million and RM30 million.
For other products, Lee takes a smaller (around 25%) share and utilises factory space provided by business partners. This model keeps costs low, while allowing Kleenso to reap part of the additional RM15 million to RM20 million sales annually.
Much of the recent spurt in sales is due to Kleenso’s unique line of products such as serai-based (lemongrass) floor cleaner, lemon-based scent remover, and sarsaparilla-based toilet cleaner, which are almost chemical free and sometimes doubly act as pest repellent (in the case of its line of serai goods).
These products are the culmination of years of research and development (R&D) in collaboration with local university researchers, with ingredients as niche as tea tree oil figuring in Kleenso’s cleaning solutions. These niches allowed Lee to survive and thrive in the competitive world of homecare products, which are largely dominated by multinational fast-moving consumer goods (FMCG) giants.
Lee, whose first enterprise was a printing company, was lecturing while weathering the Asian Financial Crisis before a chance meeting with an entrepreneur student in one of his marketing classes led him to the cleaning products
After years producing non-sticky floor cleaner in the early 2000s as an original equipment manufacturer (OEM) for household brands, Lee decided to strike out on his own when he realised his own R&D formulations could add value via branding — and in 2003 Kleenso was born.
“We found that while we had our own R&D formulations but none of our buyers wanted common products and decided the final output for us. I told my partner — who came from a manufacturing background — that I would form my own company to do marketing.
“When I decided to do this in 2003, that’s when I came up with my own brand. Then, we found a niche in the market in non-sticky floor cleaners. But I wasn’t coming from a distribution base of supermarket culture. So we started small, very low profile, selling bottles one by one to shops,” Lee said.
But if not supermarkets or grocery stores, then where?
Lee turned to hardware stores, which back then only sold tools and equipment.
“I convinced them to put my cleaning products on their shelves, and told them that they needed to carry items that customers need to buy more frequently, so that they come back regularly.
Besides hardware stores, Lee also got an early boost from kitchenware and plasticware shops, where Kleenso faced less competition from the big-name cleaning brands owned by global FMCG giants, which generally use supermarket chains as a distribution network.
“Even though this meant less competition, the going was tough because we were selling bottles in small volumes to hardware, kitchenware, and plasticware stores. Each shop would only sell RM50 to RM150 worth of bottles for us, and at that time I only had about four staff with me so I was doing deliveries as well.
“Now, 15 years on, we have captured almost 50% of the hardware stores in the Klang Valley, including chains like Mr DIY and Ace Hardware. Our reach today — including via wholesalers — is to over 1,000 hardware stores throughout the central region,” he enthused.
Kleenso is now present in around 60% of Klang Valley plasticware and kitchenware shops.
The company moved to its current USJ1 factory space in 2008 from Kepong, and then in 2011 it expanded its distribution networks to smaller and local supermarket chains as well as cash and carry outlets, otherwise known as “high-traffic outlets” (HTOs).
“We convinced HTOs to carry our wares by offering to take up promoter space, so we set up a promoter booth to take the marketing efforts off their hands.”
Today, Lee’s network includes Giant, Cold Storage, Billion, Checkers, Sri Kota, Family Store, Village Grocer, 99 Speedmart, Parkson, and Pasaraya OTK on top of his hardware-store backbone.
“We are in almost all the local chains, though our presence in international chains is now limited to Giant and Cold Storage. Our serai products have been well-received by supermarkets, due to their uniqueness in the local market. As such, we have started to slowly introduce more products with serai as an ingredient, and Kleenso is a pioneer in capturing this market,” he said.
The company’s OEM business used to contribute 20% to sales, but is now down to just 5%. Exports are likewise a small portion of the total revenue at 7%, mainly to Singapore, Myanmar, Brunei, Thailand, Indonesia, Cambodia and Vietnam.
To this day, much of Kleenso’s exponential growth is homegrown, with 80% of group sales derived from Klang Valley.
“Moving forward, our 2017 strategy is to expand from the Klang Valley to the rest of the central region, into cities like Seremban, Senawang, Malacca, and Rembau via local supermarket chains.
“We are also putting in sales staff to help my distributor in Penang Island, whilst sharing personnel in Kelantan. In East Malaysia, we are slowly making inroads but are still looking for a good partner to open a branch there.
“We are already in Miri, Sibu, and Tuaran via wholesalers, and hope to add Kota Kinabalu, Sandakan, and Kuching to our East Malaysia network,” Lee said.
The interview with Lee continues tomorrow as he talks on how Malaysian manufacturers can continue to stay relevant in a more digitised world characterised by free trade and increased foreign competition.