Our Company imports spices from Indonesia to meet the demand from wholesalers and suppliers from Malaysia and Singapore. The spice commodity trade has for centuries been a niche area of limited supply and unlimited demand. We offer services to meet this demand to supply these spices to our established clients from Penang and Singapore and plan to expand to the international market within a few years.Company Background:
Our Company is a partnership that was established on 28th April 2011. It was founded upon the idea that there are only a few ‘true’ suppliers in the market and we were approached by suppliers in Indonesia for a joint venture to assist them to meet the massive demand from Malaysia and Singapore. In the nature of this business, it is irrelevant whether we are a Sendirian Berhad or a Partnership as long as our buyers have a company to make Purchasing Orders towards. However, we plan to become a Sendirian Berhad to help grow our business in the long run.
Our service is simply this. We provide capital to our partners in Indonesia to help fulfil their present and future demands from the buyers. The Indonesian spice market has been very hard to penetrate and to gain access, but our company has special access that others don’t. In essence, we find capital, we buy the raw spices as orders, process, package and ship it to our buyers. All of this will be handled by our Indonesian partners. We buy the spices cheap, we sell it to our buyers with a profit.
Our Company has access to the Indonesian market due to the close family relationship our partners has with our Indonesian suppliers. Our Indonesia Partners have been in the spice industry for more than 10 years. Our Partners processing and storage plant in Padang, Indonesia is accredited and approved by the FDA. This allows us to potentially supply to the US,Middle-east, and European markets.
Our partners in Indonesia receives Purchasing Orders (PO) from the buyers. All PO that are received by them will be transferred to the name of our company in whichever orders that we assist to facilitate. So the flow shall be as such : Buyers -> Us -> Suppliers. We receive PO from the buyers, we make PO to our suppliers at cost price. All contracts are Free On Board contracts. Thus, all shipping and insurance cost are beared by the buyers. The shipping route is as such : Padang, Indonesia (factory) -> Port Klang -> Penang or Butterwoth Port (according to buyer).
It goes without saying that the demand of spice in Malaysia, let alone the world is huge. In Malaysia alone the demand for cinnamon alone is 300 tonnes a month. With that said, our partners have existing and future purchasing orders from various wholesalers and suppliers in Malaysia and Singapore, (Sheng Kimn Hong, Yussof Taiyoob, IEAB, SpiceKing, Teong Fatt, just to name a few) thus business is absolutely guaranteed. There is no possible way of making a loss. Worst case scenario is that if there are absolutely no orders in the future. If this is even likely, then no money will be invested as there is no purchase to process, thus there will be no loss. Due to the unique business we are in, whatever principle amount that is used to process the orders will be rolled time and time again without jeopardizing profits. Thus, in all probability it would be very hard, if not impossible to make a loss.
There isn`t much competition in our business as there are only a few players in this industry. The demand is unlimited, the supply is unlimited but the suppliers are. Our partners in Indonesia have established themselves for 10 year and whoever seeks to venture in this business needs to go through a steep learning curve, especially for foreigners. But our company has privileged access that others can only dream of due to the close relationship that our company has with our Indonesian suppliers. The only downside of this business is the fluctuation of prices in the spice market. However, our profit will not be affected as the profit margin does not fluctuate. The timeline to process each order would also not affect us eventhough the prices does indeed fluctuate. For example, the buying price for nutmeg today is RM13/kg but the selling price is RM16/kg. Profit is RM3/kg. Buying prices in the next 8 months is RM11.50/kg, but our selling price will be RM14.50/kg, so the profit will still be RM3/kg. The timeline to process nutmeg takes approximately 15 days, so either way profits are not affected.