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CASE STUDY: Serendipity - An unexpected Leadership

achievement

In a special launching ceremony on June 21, 2001, the Platinum


Crown, weighing at 166.58g and shining through its 1010 diamonds of
28.31 carat each, became the Star of the Night. Adding to its
glamour are the 240 pearls, 30 rubies of 8.38 carat and the sapphires
of 17.67 carat. The crown was listed in the Malaysia Book of Records on
August 10 in the same year as the most expensive beauty pageant
crown, placing its manufacturer Tomei Gold & Jewellery (M) Bhd as the
lead.
The year 2003 was a year of bountiful harvest for Tomei. It became
one of the top ten 2003 Golden Bull Award for Malaysian SmallMedium Enterprises organised by Nanyang Siang Pau with a ninth
placing out of 200 contesting companies. Tomei was also awarded the
SMI Digi-ICT Adoption Awards 2003 organised by Sin Chew Jit Poh and
SMISME Consultative Centre. Other than that, Tomei received its
ISO9001:2000 certification that was witnessed by Datuk Seri Ong Ka
Ting in September 2003. Later Group Managing Director Peter Jeffrey of
Super Brands International bestowed Tomei the Super Brand title.
Tomeis achievements were also recognised internationally. In 2004,
Tomei received the 7th Global International Top Enterprise Golden
Award in Taiwan from the China SME Development Association. In the
same year, Tomei was granted the Fair Price Shop status by the
Ministry of Domestic Trade and Consumer Affairs, Malaysia.

Tomei - an abbreviation of how beautiful!

Tomei started with an initial capital of barely RM5,000 and only four
staff members. The main person behind the company, Teck Fong has
never expected to be involves in it until a once in a life time
opportunity that led him to the achievement of what he has today.
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Tomei is the Chinese abbreviation of How beautiful! (duo mei li in


Mandarin). However it is not easy to guess Roman pinyin (alphabetic)
with that of the Chinese pinyin. Teck Fong said such a brand for the
company would assist the jewellery industry for their targeted
customers of different races. Tomei is now a household brand that is
fairly well known in Malaysia though many do nor know the history of
the company.

Credit has to be given to his third brother as it was he who gave Teck
Fong a chance to receive tertiary education. It was also he who brought
Teck Fong into the jewellery industry, unleashing his full potential in
this career.

Entering the jewellery industry with the help of his


third brother
Teck Fong returned to Malaysia from Taiwan in 1964. There were
limited choices of work at that time as there were not many Taiwan
graduates in Malaysia. His greatest dream of all was to be a teacher.
Business was not his first option because he did not have much
interest in it.
In the same year, his third brother who worked as a goldsmith
experienced a manpower shortage. He invited Teck Fong into a new
venture in the goldsmith contract project to improve the family
financial condition. The name of the company was Yi Xing. Teck Fong
said it was in remembrance of their mother. Yi Xing was named after
their mother Xiong Yi-Meis middle name Yi. Teck Fong still remains
active in one of his jewellery wholesale subsidiaries with the name of
Yi Xing until today.
Teck Fong was only an amateur in the jewellery industry and he still
remains as one until today. The operation work was mainly under the
supervision of his third brother. Teck Fong was in charge of the
administration work and finances. The portfolio gave him opportunity
to meet up with people from all walks of life and building a strong
networking foundation for him to start his own entrepreneurship later
on.
After a four-year partnership with his brother, Teck Fong Felt that his
brothers career has achieved the basic foundation and it was time for
him to start his own venture. During the initial stage, he had a joint
venture with hi friends to set up Tomei Gold & Jewellery Manufacturing.
Teck Fong was aware that it would not be an easy start for him as his
earlier involvement in the industry was of serendipity. Now that he
started his own entrepreneurship, it would not be easy to succeed as
Rome was not built in a day.

During the initial stage of his entrepreneurship, Teck Fong woke up


at 6am and went to bed at 1am almost every day. At times he would
even sleep over on a folding bed in his office. He said although life was
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Working hard to improve the livelihood

hard during that period, it was worth a try for the sake of his next
generation. Teck Fong would recall his mothers words: I work hard to
improve the livelihood of my future generations. I hope next generation
would be better than the last.
He began his business undertaking in 1968. It started off with the
goldsmith contracting project that was of the lower capital. Two years
later, he explored the jewellery wholesale business with his friends.
After three years of hard work, he became famous jeweler in Kuala
Lumpur and Selangor in 1971. By then, he was already a father of
three.
By the time his fourth child was born, he had expanded his business
to retailing and bought two shop lots in Kuala Lumpurs first shopping
complex - Campbell Shopping Complex. Some three years later, he
opened another gold and jewellery shop in Sungai Wang Plaza.

The many branches of Tomei Consolidated Bhd


After years of hard work, the Tomei Consolidated Bhd today has
become a diversified organisation, ranging from the precious metal
foundry, precious metal industry, jewellery wholesale to jewellery
retailing. The mode of operations for Tomei is that of a one-stop centre
with its capacities ranging from foundry, manufacturing, wholesale,
OEM to retailing.

There are nine My Diamond retail outlets in the Klang Valley


bringing a total of 36 outlets under the Tomei Gold & Jewellery (M) Bhd.
Teck Fong estimated that it would expand to 50 outlets in two years
time. The line of products bearing the brand My Diamond targets
young ladies at affordable pricing of platinum based and light pressed
diamond jewelleries. Tomei launched its TH brand (Tomei Holding in
short) to target the higher grading market, hence providing consumers
a choice of outstanding quality merchandises. Apart from retailing,
Gemes Precious Metal Industries, a subsidiary of the Tomei Gold &
Jewellery (M) Bhd, focused on the production of gold jewellery and
supplying the retail outlets. The company produces about 250 kg of a
variety of precious metal jewellery monthly.
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Currently, Tomei Gold & Jewellery (M) Bhd owns 27 retail outlets.
Teck Fong adopts new management concepts from time to time in
order to keep the pace with the times. One of the examples is the new
brand My Diamond that was launched in 2001. My Diamond
highlights fashion, trend, innovation, bold and affordable prices. It also
uses its platinum crown beads series as the selling point to attract
youngsters.

Malaysia is currently the worlds second golf manufactured goods


exporter after Italy, a fact that was not known to many. Teck Fong
added that there are several reasons that placed Malaysia as one of
the worlds major gold manufactured goods exporter. The first reason is
the designs which are a mixture of the multicultural and western
styles, thus creating its own style for the countrys gold manufactured
goods. This has not only become the all time favourite of the multi
races in Malaysia but also attracted foreign tourists.

Precious metal jewellery, the major export


Secondly, the jewellery industry in Malaysia has been gradually
standardised and globalised some 20 years earlier. The quality of the
gold manufactured goods, be it the 919, 916 or 835, have complied
with the required international standards, hence easily gaining the
trust of foreign buyers.
The third reason is due to the cancellation of taxes that are
unfavourable to the jewellery industry by the government of which the
abolition of the import duty enhanced the competitiveness of the
Malaysia jewellery industry. In fact 60% of the precious metal jewellery
manufactured by Tomei is exported with the remaining 40% for the
domestic market.
Serendipity, an unexpected achievement would probably be the
best phrase to describe Teck Fongs journey to success that started off
from scratch. From a mere RM5,000 capital with four staff members, it
has grown through the years with a yearly turnover of RM150mil with
350 staff members. He predicted that the total annual turnover of his
company would exceed RM300mil by year 2006. Integrity and
innovations are the keys to success for Teck Fong. It was mentioned
earlier that Teck Fong owns a jewellery wholesale company by the
name of Yi Xing where he built up a strong sense of integrity with the
word Yi. The company started off at a small scale and it would be
irrational to compete head on with larger companies.
The reasons are none other than the limited capital and sales
network compared to those of the corporate companies. The challenge
was achieved with a breakthrough in the jewellery market and has
become a significant player in this industry.

Teck Fong used his sharp sense in business to build his brand by
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Exploring the Indian and Malay jewellery market

producing gold jewellery of higher purity level. The jewellery product


manufactured by Yi Xing were distributed in small towns and smaller
gold and jewellery shops to fill in the niche that was left out by the
larger distributors. At the same time, he explored the Indian and Malay
jewellery market. Not many were interested in this market as shops at
that time were relatively small. It was a new scope of business strategy
for Yi Xing because the festive seasons and auspicious periods for
weddings of the Chinese, Malay and Indian are different, thus creating
more business opportunities all year round. They did not compete with
the bigger jewellery companies so building up brand integrity among
the customers was relatively simple and straightforward for Tomei.
Distributing the goods is one thing and capturing the customers is
another issue altogether. This did not create any trouble for Teck Fong
who has a goof business sense. His strategy was to provide quality of
the gold and offering a wide range of designs. The gold jewellery
available in the 60s was made of gold with less than 88% of the purity
level claimed. Customers had been criticising the jewellery quality,
saying that the quality was not that much different from the standards
in the earlier days. Based on Teck Fongs experience, the colour of high
purity gold would turn more orange in colour over the time instead of
getting darker. Most of the jewellery product in the market did not
meet the criteria. Teck Fong understood that it was the result of vicious
competition. He went against the market practice and produced
jewellery products at the required standard of 88% purity gold.

One of the factors that contributed to Teck Fongs success is


integrity while the other is the wide range of jewellery designs,
denoting innovation. One of the difficulties in this venture is to rely on
the uniqueness of ones product to differentiate from the competitors.
The traditional Chinese jewellery would have focused on Chinese alltime favourite designs. However, a single style of design would only
limit the market penetration since gold is a popular precious metal well
accepted by races. Looking from this point of view, Teck Fong
emphasised more effort on the jewellery designs to cater the
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Teck Fong could still recall the disagreement and sarcasms drawn
towards his singular opinion and bold move. However it led to the
turning point for the jewellery industry to what it is in Malaysia today.
The jewellery product distributed by Teck Fong bears the Yi hallmark.
This serves as living advertisement for their brand. Any jewellery
product bearing the Yi mark symbolises the quality assurance in the
market. This is how Teck Fong built up his integrity image. His products
are still highly regarded in the market until today. With this decision
and action, Teck Fong fully displayed the spirit of walking on your own
path (Not being afraid to do what one thinks is right).

preferences of various ethnic groups to expand the market.


Teck Fong could still remember one of his company innovative
products - a pendant with the parliament building and the Malay
kampung s the motif in the background. This particular design sold like
hotcakes in the Malay markets. Teck Fong next introduced a carving
machine from Japan and started producing jewellery of international
standards with the latest technology. His product was not only of
quality assurance but also provided a wide range of designs to choose
from. This has particularly appealed to the resonance of the various
customers cultural background.
The Ng family captured the market through integrity and innovation
since the inception of Teck Fongs business. He is still practising these
key principles closely even though the business has grown to larger
scale today.
There were many coincidences in history and most of the
opportunities came when they were least expected. If Teck Fong were
to insist on pursuing his dream in becoming a teacher or work for
others, then the Tomei brand would never exist in this piece of land
called Malaysia. Afterall, if is still an if and if not for the fact that Teck
Fongs success in his golden career this reality could have remained
elusive.
A person is also required to put in effort when opportunities come
along. Teck Fongs achievements from a zero to a hero today are the
result of the hard work and cooperation offered by all the staff
members.

Though Teck Fong is a successful entrepreneur, he is not the kind


who casts aside consideration for humans and think only of dollars and
cents. The main goal of running a business is to make profit. If the
business is not making profit, then a prompt decision should be made
to end it. Teck Fong has indeed closed some of the outlets that were
losing money.

Dignified and takes care of the employees benefit


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Although Teck Fong is currently the Managing Director of Tomei


Consolidated Bhd, he has, however, retreated partially from daily
operations of the company and delegated the work at large to his
children. He quipped and described himself as semi-retired. However,
he would do his best to contribute some ideas to his children whenever
needed. He would also think of ways to solve their problems when the
need arises.

Some of the gold and jewellery shops managed by Teck Fong were
making monay while some were relatively poor in performance. Yet
that does not mean Teck Fong would simply shut down those shops. He
felt that every staff member,especially those who have served the
company for years, have their own family to look after. No doubt it is
not an unethical decision to dismiss the workers if we were to look at it
from the business point of view. However, it would then be something
to deliberate of viewed from the aspect of social responsibility. If
keeping the staff members employed would not affect the
fundamentals of the company, then the company might inadvertently
played its part in contributing to social responsibility.
Think about it. If each staff member were to bear the living
expenses of three, then dismissing 100 staff members would have
affected the lives of at least 300. If every company were to dismiss
their employees on the same reason, wouldnt it be creating chaos in
society?
Tomei Gold & Jewellery (M) Bhd Managing Director Ng Yih Pyng
(Teck Fongs second son) brought in his own vision and practices by
expanding them from his fathers stewardship. He placed his vision on
the international market to strengthen Tomeis operations overseas.
Mainland China, United States and the ASEAN countries are all the
potential markets that Tomei is devoted to develop. One of the
pipelines to explore the international market is taking part in the
international Gold and Jewellery Exhibition. This would provide the
opportunity to learn more of the gold and jewellery products and
understand the industry in other countries. Other than that, the most
important thing was to be able to bond with the existing customers
while establishing new ties through such an occasion.

Tomei was made Malaysias main distributor by the world-renowned


Le Lumiere brand of Heart and Arrow diamonds in 2004 and 2005
respectively. In 2005, it was granted the main distributorship for the
Thailand brand Prima Gold 24K (999.9) pure gold craftsmanship
jewellery product for Malaysia, Singapore and Brunei.
Tomei Consolidated Bhd is slowly moving towards its aim of
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Tomei set up the International Jewellery Exchange Hub through a


joint effort with a Sri Lankan conglomerate Ceylinco & Consolidated
and Sri Krisha Jewellers of India in 2004. The exhibtions were held in
Australia, Sri Lanka, India, Malaysia, Singapore and many more places
to provide the customers of respective countries a wide range of
jewellery to choose from.

globalisation. In 2005, the Ministry of Entrepreneur Development and


Cooperation of Malaysian approved Tomei, My Diamond and TH
Jewellery a license to franchise their business brand. This has created a
far-reaching impact on the development of Tomeis retailing business
towards the international arena.

The listing of Tomei - an ambitious expansion


Upon embarking on the steps towards the international arena,
Tomei was just like the big bird flapping its wings. Flying towards the
international arena was its only mission. Under the leadership of Ng
Teck Fong, Tomei Consolidated Bhd was listed on the Second Board of
Bursa Malaysia on July 12 2006, spring boarding Tomeis image into the
international market.
However, Teck Fong did not reast on his laurels on Tomeis
achievement at the Second Board. He was full of vision towards the
future of Tomei and the Second Board achievement was definitely not
the ending point for Tomei. Indeed, Teck Fong diverted Tomei from the
Second Board to the Main Board by end of year 2007 in just 15 months.
This was certainly a crowning achievement in the 40 years history of
Tomei.
The Malaysian market was slacking when Teck Fong was working on
listing Tomei in 2006. Many investors and businessmen spent time
observing the market trends in Malaysia. Teck Fong was determined to
got Tomei listed by midyear. His persistence drew certain criticisms as
some critics were opined that his decision was really a bad timing. Teck
Fong remained unruffled and brimmed with confidence. He said, By
the time the market is flourishing, it would already be too late. As a
result the actual figure achieved from the overwhelming response from
the public proved somewhat satisfying. Tomei was over-subscribed by
5.3 times during the open tender.

The success in listing exercise not only proved the unique vision
and business acumen of Teck Fong but also the confidence of public
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Tomei Consolidated Bhd offered 14,608,000 shares at a nominal


value of RM0.50 each. According to the RHB Finance Consulting and
Services, Tomei Consolidated Bhd received 7301 applications to
subscribe for 39,710,200 shares. Tomei successfully raised RM13.9mil
through the initial public offering (IPO) activity. The financial boost laid
a strong foundation ahead for the corporations next step towards the
international market. On its bumiputra applications, Tomei also
achieved n over-subscription rate of 4.44 times with the bumiputra
applicants garnering 10,282,900 shares.

investors placed towards Tomei Consolidated Bhd. With the public


confidence, Yih Pyng carried out the master plan towards Tomeis
ambitious expansion fulfilling the hopes of his father. The same year,
Yih Pyng announced in a press conference that Tomei was also
preparing to enter Vietnam, Brunei and China besides Germany,
Indonesia, Singapore and Dubai.
Tomei would definitely not neglect the local market development
while aggressively pursuing the overseas market. In 2006, the Group
set up three to four branches in Penang and Malacca at an estimated
budget of RM 2million to RM3million each. This was partly funded by
financing facilities and partly by its internal fund. In 2008, the plans for
additional branches expanded to Sabah, Terengganu and Penang. Yih
Pyng pointed out that the market share of Tomeis gold and jewellery
in2006 was 7% and the expansion of branchers could improve the
performance in this aspect.

Discussion Questions

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1. Using the discussion of effective leaders as a starting point,


evaluate the qualities of effective leadership that Teck Fong
appears to have.
2. Do you believe that Teck Fong is a transformational leader?
3. How might Teck Fong benefit from any of the leadership
development techniques? What particular techniques would
appear to be most helpful, and why?
4. What have you learnt from this case study?