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5 Things You Should Know About Neo Group

neogroup logoIf there’s one thing Singapore knows about, that’s buffets.

Whether it’s a full-month baby shower, decadent 21st birthday party or Chinese New Year spread, there’s always a buffet being munched on somewhere. Which is good news for Singapore’s biggest food catering company Neo Group (SGX: 5UJ) which prides itself on being able to “bring the restaurant to you” for any event – from a sit down dinner for ten to a party for 10,000.

But the road to success was not always an easy one for the company’s founder, Neo Kah Kiat.

Born into a poor Singaporean family, Neo remembers regularly having the water and power cut off due to unpaid bills.

Neo and his three brothers slept on the living room floor of their three-room HDB flat as one room had been rented out and they nailed wooden planks to the windows to keep out the sun and rain. Neo decided from a young age that he wanted to “be a businessman and earn a lot of money”.

Schoolboy Entrepreneur

When Neo was nine, he would salvage old cable ties from factories to make shapes that he would sell to his classmates for 10 cents each.

At 12, he decided to sell “otah” (fish cakes wrapped in banana leaves) at the weekends – borrowing money for supplies from his godmother, waking at 4am to grill the otah, then paying friends to help him sell them, door-to-door in HDB blocks. He then learnt to make satay, which he sold at the void deck of his block of flats.

School

Neo had to repeat two years of primary school – but by the time he reached Secondary school he had started to excel and topped his class in Mathematics in Secondary 1. But his wish to earn money got the better of him and he dropped out of school after one week in Secondary 2.

Economy Rice Stall

Aged 17 and armed with another loan from his godmother, Neo took over a food stall at a factory canteen. He employed a chef, serving and washing the dishes himself. However, the stall barely broke even – so Neo closed it down and began his National Service.

Electrical Repairs

Neo then started an electrical repair shop with his aunt, fixing and exporting televisions and air conditioners to Indonesia and Malaysia. However this proved unprofitable and was closed within a year.

Neo Garden Catering

Things changed after Neo attended a friend’s party serving disappointing food. Neo believed he could do better and decided to create a catering company that produced food as good as, or even better than, a restaurant.

In 1992, he borrowed $15,000 from family and friends and leased a small-shared kitchen in Joo Chiat where he would prepare the catering orders for his new company “Neo Garden Restaurant” (which became Neo Garden Catering). Neo refused to scrimp on standards, explaining to staff “The food must be excellent, the speed of service fast and the set up impeccable”.

However, with few orders he would often be working for two months for just one week’s worth of money and could barely afford to keep his battered lorry used for deliveries on the road.

Deli Hub catering

Undeterred, Neo decided that in between catering events he could run a lunch delivery service, bringing meals into homes and offices. Business was starting to pick up.

Then in 2004, he founded his halal catering arm, Deli Hub Catering that provided “value for money buffets for multi-racial celebrations”.

Umi Sushi

In 2008, Neo opened a kiosk in Eunos MRT station selling sushi and sashimi, which he called Niwa Sushi (but subsequently renamed umisushi). In the same year, he started a high-end catering firm named Orange Clove Catering.

The hard work was paying off – in 2011 Euromonitor International rated the Neo Group Singapore’s No. 1 events caterer – and Neo decided it was time to get listed.

But did you know…

  1. Neo Group employees wear a different coloured polo shirt each day of the week, recite the company’s pledge and sing Emil Chau’s song “Friends” when they finish work.
  2. Each chef in the Neo Group kitchens is designated one dish to cook – meaning that a complete buffet of eight dishes can be turned out every two minutes.
  3. Neo believes it is vital to take care of his staff – so much so that when times were hard he would borrow from loan sharks and pay hefty interest to ensure he could give his employees a Chinese New Year bonus.
  4. In 2013, Neo Group made Singapore history when it took 1,005 buffet orders for Chinese New Year Day.
  5. Neo Kah Kiat hasn’t forgotten what life is like at the bottom. He and his directors have been known to don the Neo Group polo shirt to cook or make deliveries when short-staffed – and he still hits the fish market with his employees at an eye-watering 4am every Tuesday and Wednesday to select the choicest produce.

Today, the Neo Group is a true Singaporean success story, thanks to its cheong (tenacious) leader. The group still runs its three arms, Food Catering, Food Retail and Food and Catering Retail Businesses.

The Food Catering business runs the three catering companies: Neo Garden, Orange Clove and Deli Hub – which can cater events to any budget. In addition, the company’s Express Buffet service can turn out a buffet for up to 500 people with just three hour’s notice.

The group’s Food Retail Segment runs the highly successful umisushi chain of affordable sushi outlets – which is currently expanding into Indonesia.

Neo is still delighted that a high-school dropout is now employing graduates, explaining that he “likes his staff to be smarter than him so they can help him take the company to the next level”.

Well, better educated maybe – but with Singapore’s award winning, number one events catering business to his name, Neo Group employees would have a hard job proving they’re smarter than their boss.

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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.