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5 Things You Should Know About Old Chang Kee

oldchangkeeIn our melting pot that is Singapore, food is very important – after all, where else can you find such a variety of different ethnic cuisines in such a small area? Some visitors come specifically for the food – with chicken rice, char kway teow, chilli crab or laksa high on their lists.

However, one food that is barely ever mentioned is the humble curry puff. This curried potato, chicken and egg filled pastry is a favourite teatime snack for many and is the most popular item for sale at Old Chang Kee (SGX: 5ML).

Rex Curry Puff

Starting out way back in 1956, as a tiny stall near the Rex Cinema on Mackenzie Road, Chang Kee, run by Hainanese immigrant Chang Chuan Boon was famed for its delicious Hainanese-style curry puffs. Indeed, the Rex Cinema was then clearly the place to go for curry puff fans, as further down the road was the Selera Restaurant, which sold its own, spicier curry puffs. Queues for both stalls were long, and the puffs were nicknamed “Rex Curry Puffs” after the cinema.

However, in 1986, Mr Chang wished to retire and return to China. A small group of investors led by Han Keen Juan (a former salesman and marketing manager) who had met Chang through the Hainanese Association, offered to buy his stall for S$30k.

Revamp

With plans to expand, Mr Han decided to revamp the business, and engaged an advertising agency to design a new logo and come up with the tagline “Old Chang Kee – it’s a better puff”. Four of the shareholders balked at the S$12k advertising fee – and pulled out. With just Han and his cousin Bugs Tan still in, Han’s nephew William put in S$5k but times were difficult.

Expansion

Han had plans to expand – but selling 700 puffs a day for 40 cents each gave no revenue to fund it. But when the stall’s landlord increased the rental from S$300 to S$6,000 per month, Han felt forced and opened a second outlet at Lau Pa Sat. Han and Tan decided to standardise the curry puff preparation and cooking processes, travelling to India and Sri Lanka to learn about spices.

Gradual expansion continued and by 1991, there were 12 Old Chang Kee outlets throughout Singapore. Sales turnover had grown from S$700k in 1987, to S$1.6m. They decided to build a factory, allowing them to turn out 10k curry puffs each day and began to expand overseas.

Re-engineering curry puffs…

Business continued to be good and Han invested in a 20,000 square foot modern production facility in Woodlands. However, this was met with scepticism from his workforce, who had to be convinced that the machinery was necessary to standardize the workflow and quality control – not to replace them.

However, in 2002, whilst Singapore had a craving for Old Chang Kee and its products, racking up a whopping S$14m in sales, consumers overseas had proved less keen.

After complaints about quality and consistency at Old Chang Kee’s outlets in Malaysia, Indonesia, South Africa, China, Japan, India and New Zealand, Han cut his losses and terminated all 24 overseas franchises.

Fresh Ideas

Han realised the company needed to move to the next level, and in 1995, invited his nephew William Lim, who had recently graduated in Australia, to join.

Lim, who became Managing Director in 2003, increased the number of outlets to 40 by 2005, and expanded the menu to include other fried items such as chicken wings, nuggets and fish balls. Halal certification was achieved, a fast food café was introduced and the company was challenged to come with a new product every three months to keep “food-crazy Singaporeans” interested.

Overseas expansion was again on the cards, and this time Old Chang Kee entered Malaysia, Thailand and the Philippines with stricter controls on their franchises.

But did you know…

  1. Mr Han confessed that he “never liked cooking and could not even fry an egg” when he took on the curry puff stall, but learnt every single procedure – from kneading the dough to frying the potatoes and chicken for the filling.
  2. Mr Han’s informal leadership led him to encourage his employees to call him “Ah Zup” (Hokkien for Number 10 – his nickname as a boy).
  3. Old Chang Kee gives priority to jobless older workers – 80% of the chain’s staff is aged 45 or older.
  4. Rather than hanging a picture of its boss, Old Chang Kee’s Woodlands headquarters has an almost life-sized photograph of Minister Mentor Lee Kuan Yew on the wall, with his quote “The day you can’t adjust and change, that day you begin to shrivel and die…that’s all. The day I’m unable to learn new things, I’m out of touch with the world, then I’m useless”.
  5. Han Keen Juan tried blending cultures and introduced croissants to Old Chang Kee. However they didn’t take off – customers explained that while they were happy to eat a curry puff on the go, they preferred to sit down to eat a croissant.

Today, Old Chang Kee has gone from selling 700 curry puffs a day to over 35,000 – as well as offering 30 other products including its popular fried sotong, chicken wings, fish balls and nuggets. It also runs the Curry Times, Mushroom Café, Take 5 and the Pie Kia shops.

The company has gone from that one stall in Mackenzie Road to 76 outlets, with one each in Australia, Indonesia and Malaysia.

As for Mr Han, well he now leaves the running of the show to his nephew William Lim, preferring to read or meet friends at his favourite Hainanese kopitiam.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Alison Hunt doesn’t own shares in any companies mentioned.