Managing Asia

Managing Asia

Singapore's Sing Lun has top sportwear labels as clients and an ambitious outlook

When athletes from Michael Phelps to Usain Bolt appeared in slick athletic gear by brands Under Armour, Puma and Oakley and others during the Rio Olympics, Mark Lee had an extra reason to cheer.

The global sportswear labels in the spotlight have something unexpected in common; they are just some of the iconic brands that Singaporean apparel manufacturer Sing Lun Holdings counts among its clientele.

Once a family business that specialized in textile trading, Sing Lun now operates 13 manufacturing and sourcing facilities across Asia, generating annual revenue of $185 million. Leadership at the company is now well into its third generation, after its current CEO Lee took over from his father in 2009.

"I'm the guy that's supposed to spend it all, right?" jokes Lee about the third generation curse that seems to afflict family-run businesses.

Under Armour clothing on a display in a sporting good store.
Justin Sullivan | Getty Images

In reality, Lee runs a tight ship at Sing Lun.

"I was [usually the] first one in the office and the last to get out," he tells CNBC's Managing Asia. He says that the tremendous pressure he feels in carrying on the family legacy is what drives him forward.

Lee cut his teeth on the production floor when he was only 12, helping out wherever he could by cutting threads and working the cartoning machine. Growing up alongside the company's factory workers led him to treat them as family.

This made things extremely difficult when Lee had to make the decision to close two of Sing Lun's oldest plants during the Global Financial Crisis. Lee had only just become CEO of the company when production capacity tumbled 30 percent after the loss of a major customer.

"I remember holding a microphone … [while] facing a couple of hundred people and explaining to them the situation, why we had to shut [the plant] down," says Lee, "It was not easy, I could see the fear in their eyes."

A total of 600 staff were retrenched.

"In times of crisis, I think one has to be … courageous. You have to make decisions for the greater good and we did all we could do to help [the retrenched staff] find new jobs," Lee says of the difficult decision.

In order to stay ahead of the curve to prevent something like this from happening again, Lee says that monitoring the conditions Sing Lun's clients face is important to understanding how the supply chain might move. For instance, the company now keeps close tabs on trends in the wearable tech space.

Sing Lun recently began working with a company in Manchester to created a t-shirt that incorporates washable sensors that measure heart rate and muscle fatigue in its design. Lee says that this technology can be applied beyond its traditional use in athletics to being used to monitor the health of the elderly or to tracking working conditions of high-risk jobs on oil rigs.

Obama: Stepping up our efforts to invest in Asia
Obama: Stepping up our efforts to invest in Asia

Today, despite the rising wages in Sing Lun's factories in Asia that make it difficult to grow profit, the company continues to make a double-digit margin that's considered admirable by the standard of its industry peers.

Lee admits that business conditions are challenging but says it remains a top priority to pay good wages in order to maximize efficiency and output.

His next target? Gradually achieving 500 million Singapore dollars ($370 million) in annual revenue. "I think hit[ting] about S$400 million Singapore dollars ($296 million) in the next three years is a highly realistic target," says Lee.

A factor that has helped considerably has been international trade agreements, such as the existing United States-Singapore Free Trade Agreement. Lee says new trade deals, such as the TransPacific Partnership (TPP), will enable Sing Lun to ship with preferred duty access to the U.S. from its six factories in Vietnam, a signatory to the deal.

As for the decreasing probability of the TPP being ratified by the U.S. after growing anti-trade sentiment from the presidential candidate, Lee says he remains optimistic.

"I personally feel that the TPP will evolve, regardless of whether Trump or Clinton becomes president," Lee reckons. "Eventually, I think TPP will pass but maybe certain terms will have to [change] but that's really just my own two cents."

This has encouraged the company to expand its presence in the Vietnamese manufacturing scene, where it currently has 3,200 employees in its flagship plant in the Hakei province.

"That plant would double in size within the next two years [as] we are hoping to solidify that country as our product development and production hub for the rest of the region," says Lee.

Till then, Lee remains focused on keeping Sing Lun competitive. His advice for other family businesses?

"As a successor-to-be, never be in a hurry to fill the seat. Respect your family not just because they are family but also because they are shareholders."

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