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Business Advice

Humble beginnings deliver a great recipe for success

Self-confessed risk taker, Neo Group founder started out at 12 selling otah
The Straits Times - April 25, 2012
By: Lo Yee
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Humble beginnings deliver a great recipe for success Mr Neo Kah Kiat -- ST PHOTO: TERRENCE LIM

MR NEO Kah Kiat, 41, is the founder of catering giant Neo Group, and now runs three separate catering brands that have churned out millions of dollars in sales.

But his considerable success has not dimmed his enthusiasm for rising well before dawn to purchase food items for the work day ahead.

It is a habit he formed when he was only 12. He would wake up at 4am, ride a bicycle from his home in Eunos to Bedok and buy around a thousand sticks of otah.

He would take hours to barbecue the food to golden-brown perfection, before selling them at his school campus.

'No one in my family was even awake then,' recalled Mr Neo, who used to make $150 a day from his 'business'.

Being born into a less well-to-do family with four siblings only convinced him to make it big someday.

Decades later, as the chairman of Neo Group, Mr Neo remains enthusiastic about his job - even if it means giving up on the luxury of sleep.

'Even now, I still wake up at 5am twice a week to go down to the wet market and select the freshest fish,' he said.

He had always wanted to start his own business, having honed his entrepreneurial skills since he was young.

After completing his secondary education and enlisting in the army, one chance event led him to take the first step towards the business empire he has created.

'I was invited to an informal lunch and I saw that the catering presentation was poor, with the food displayed messily. The caterer even arrived late,' he said.

He added that back in the 1990s, there was a lack of quality caterers in Singapore.

It was an opportunity too good to be missed. So he started his first catering brand, Neo Garden Restaurant, in 1992, with a start-up capital of $15,000.

He was only 20 then.

'I borrowed the money from relatives and friends. To pay back my debt, I didn't take a salary for the next two years,' he continued.

The 'garden' part of the name was inspired by the success of Tong Garden, a brand that's famous for its traditional snacks and that resonated with households at the time.

With about eight to 10 employees, he operated out of a shared 2,000 sq ft kitchen in Joo Chiat.

'I worked for at least 18 hours a day in the early years,' Mr Neo said. 'And I took everything into my own hands - the purchasing, answering of calls, advertising, sourcing for cooks, even the delivery of food.

'It was very tough, but my attitude was one with no 'U-turn' - there was no going back for me, I wanted to succeed.'

Within two years, his business grew and doubling rents forced him to move to a 4,000 sq ft coffee shop in Jurong West.

He had more than 30 staff members by then and business grew at a steady rate for 10 years. 'We managed to break even every year, which was good,' said Mr Neo.

But the self-confessed risk taker was always ready to jump into new opportunities that he spotted.

In 2004, he started Deli Hub, one of the pioneering caterers to offer halal food.

He also started the group's first Niwa Sushi outlet at Eunos MRT station in 2007, selling quick-service Japanese food.

Niwa Sushi has since been rebranded as Umisushi, with 17 outlets currently.

And in 2008, he decided it was time to give his catering business a new spin.

'We started Orange Clove to target the higher-end consumers,' he said.

The new catering brand prided itself on having a unique selling point: customised theme parties at affordable prices.

For a starting price of $250, the team can whip up fairytale-style, pirate-themed and even musical-inspired buffet decor. 'Last year, we painted cream puffs to look like eyeballs for a company's Halloween event,' he said.

For special arrangements like this, Mr Neo added that 'it takes... about two weeks to prepare and additional costs will be discussed with the customer.'

Currently, the 480-strong Neo Group owns four central kitchens in the eastern and western parts of Singapore, with a gross floor area of about 26,800 sq ft.

A little less than half of his workforce is made up of foreign workers who are now demanding higher pay.

To avoid spiralling costs, Mr Neo is boosting productivity levels. 'I believe in having one chef in charge of one dish. This ensures efficiency for every order and we are able to prepare the food an hour prior to delivery, so it stays fresh and warm.'

The firm's IT system has been developed over the years, allowing for each stage of its production, such as logistics, sales and output, to be fully integrated.

When a customer makes an order online or through mobile booking, the transaction data is automatically transmitted to the relevant departments.

Also, certain processes such as the frying of rice are fully automated.

As his business celebrates its 20th birthday this year, Mr Neo is reaping the rewards of his hard work.

Sales have grown by 20 per cent year-on-year for the past two years up to January. The firm chalked up more than $35 million in revenue last year.

Even though the Neo Group is regarded as a go-to brand in the catering world nowadays, Mr Neo is far from ready to rest on his laurels.

The firm has bought a 200,000 sq ft property in Jurong to consolidate all four kitchens and offices in the same premises. The move is scheduled to be completed within the next two years.

Also, he intends to double the number of Umisushi outlets to 30 by 2016.

For the father of two, the business that grew out of a childhood passion for cooking otah is more than an enterprise.

'It's been a lot to handle, but this business is still my biggest baby.'

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