30 June 2009  Special Focus  Striking out on their own during a difficult period, Brian Sweeney and Peter Ong found a niche in the petrochem sector and made it theirs, reports VICTOR KATHEYAS

BESIDES boasting annual turnover of about $70 million and profit before interest and taxes (PBIT) of $7 million for the financial year ended March 2009, Cables International has a slew of awards to its name. It clinched the Enterprise 50 award last year, and was ranked among the top internationalising SMEs, as well as the top SMEs by turnover growth, by DP Information Group this year.

Add to that its list of clients, which reads like a Who's Who in the offshore and marine (O&M) and mining sectors. They include Exxon Mobil, Conoco Philips, Keppel Shipyard, Rio Tinto and Alcoa.

But things weren't always this good. Cables started operating in early 2003 amid relatively unfavourable circumstances.

Director Brian Sweeny and managing director Peter Ong were working for a British company that was going into receivership due to difficult market conditions. But this unfortunate turn of events had a silver lining - the two men decided to strike out on their own.

'We started (the company) because, basically, we needed to earn an income,' Mr Sweeny says, tongue in cheek.

Having set up Cables with about $300,000 of their own money, and the funds of a partner who has since left, they acquired the Asian inventory and machinery of their previous company.

Recognising that the downstream petrochemicals sector was extremely competitive and offered low margins, Cables instead chose to start by providing specialised products for use in the harsh marine environment to clients involved in upstream projects and fabrication.

A few months later, 'we realised we needed more money', says Mr Sweeny.

The young company obtained a $50,000 micro loan from SPRING Singapore but was turned away by banks because it had no track record. Fortunately, in mid-2003, mainboard-listed King Wan Corporation, which was seeking to diversify, took a stake in the company - and gave it a much-appreciated capital infusion.

The backing of a listed company also made suppliers comfortable enough to extend credit lines to Cables, which made doing business easier.

'Manufacturers knew of us, we had dealt with them in our previous lives (working at the previous company) so to speak. But they were skeptical because they knew we didn't have money when we started,' says Mr Ong. 'King Wan's entry opened the door for us, and four manufacturers came on board.'

Mr Sweeny says that over time, Cables grew because it positioned itself as a service-driven company, rather than a cable distributor.

'For example, in our business, the timeliness of delivery of the product is critical, as the cost of delays can run into many millions of dollars,' he says. 'To avoid such problems, we hold around $10 million of fast-moving cable stocks at our premises. In emergencies, we will fly cables to our customers to meet our obligations and satisfy their requirements.'

In addition, about 70 per cent of annual profit is ploughed back into the business to improve its stock profile, train staff and develop IT systems, among other things.

Recently, for example, Cables sent an employee - who is now sales director - for a senior management training course at Singapore Management University.

'When she came back, we saw the difference - confidence, breadth of knowledge, the way she asked questions,' says Mr Ong.

The company will send its business development manager on the same course in July.

Mr Sweeny and Mr Ong concede that the business environment is less favourable now than a few months back, but are confident about the continued success of Cables.

First, besides winning new projects recently, the company has a 'large order book that carries on well into 2010'.

Also, a significant part of its business is maintenance, repair and overhaul work, which is less affected by the vagaries of the market.