For Singapore-based steel supplier BRC Asia BEC , buying its rival Lee Metal Group in 2018 was one of its most significant moves since its founding in 1938. The company became one of Singapore’s largest reinforcing steel fabricators in one fell swoop.
Its CEO, Seah Kiin Peng, adds that the acquisition unlocked many economies of scale, from procurement and sales to credit control, logistics and production. “Beyond the anticipated synergies, there have been other, unanticipated upsides too, stemming from the fact that we became the biggest purchaser of steel in Singapore.”
It expanded into wholesale and international trading, selling steel locally and globally, leveraging relationships with mills to meet demand and accelerate overseas growth.
“Together with the marketing and public relations work that we have done, I think there is a lot more awareness now of our brand, what it stands for, and that we are an old, proud and traditional brand. We are probably now as renowned in our industry as Xerox is in the printing space, where the name is used interchangeably with the sector and product.”
Yet, reaching this coveted position required navigating the distinct working cultures of BRC Asia and Lee Metal Group post-acquisition while enduring the significant disruptions caused by the pandemic. Seah says: “Our two firms had different ways of managing people, so there were some adjustments.”
“We took the opportunity to learn from Lee Metal Group and retain some of their character. At the same time, BRC Asia has a more formula- and KPI-driven system for rewarding staff, so employees from Lee Metal Group had to get used to that, too. It took some time, but I think everyone is happier and in a better place now.”
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Working together to survive Covid-19
The pandemic was a challenge of a different order. Seah explains: “I think the word ‘unprecedented’ is overused, but that’s what it was. If you looked around, every nation dealt with Covid-19 differently, but Singapore may be the only one that shut down its construction sector, the biggest user of steel, apart from a few, very minor projects.”
With BRC Asia operating three dormitories, it had to scramble to isolate the facilities and protect their 600 residents from the coronavirus. “Even as we sent food, fruits and other resources in, we decided from day one of the lockdown that no external personnel, even management, would be allowed to set foot into the dorms to reduce the potential spread of the virus.”
It had to devise strategies to weather the construction shutdown. Seah says: “The experience brought me back to my army days when you had to mobilise and work together to carry out a mission in a situation you had never been in before. In this case, the difference was that there was no precedent that we could refer to for help.”
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The company’s human resources department communicated constantly with the Ministry of Manpower to stay updated on and implement the latest guidelines, while its sales team actively pursued clients for payments to bolster its cash reserves.
“The pandemic was a huge test, but we pulled through because of our team. Particularly for our management team, it was still all the same leaders from BRC Asia and all old colleagues after the acquisition, so we knew how to get things done effectively.”
Seah believes that BRC Asia has become stronger after the pressure and struggles. “They say crisis brings people together, which is true of the pandemic. It brought about a new level of engagement among our staff and the people who work with and for us and reinforced friendships and camaraderie at and across all levels.”
New paths into overseas markets
As the company moves past the crisis, its revenue and net profit increased by 17% and 46.5%, respectively, for the quarter that ended Dec 31, 2023, compared to the quarter that ended Dec 31, 2022. Seah aims to continue its upward trajectory that was interrupted by the pandemic.
It plans to use its new international trading business to ease its way into more overseas markets. “Our shareholders, stakeholders and the public at large can look forward to our growth through entrenching or extending our trading into stocking, and then eventually fabrication, in countries outside of Singapore, other than the places we are in right now.”
BRC Asia operates factories in Singapore, Malaysia, and China, selling steel to Southeast Asian end-users. It also holds trademarks for various products in countries from Australia to Cambodia to Indonesia. Seah notes that using its international trading business as a wedge into new markets is necessary because of the nature of the construction sector.
“Construction is a very local industry in almost every country. Trading with companies in other countries, getting a better understanding of their supply chains and then going downstream from there will give us our best chance of moving effectively into those countries,” he adds.
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Singapore’s steel demand remains strong due to its strategy of maximising land use through redevelopment, although it pales compared to larger countries. “Despite having limited land for construction, we have maintained a steel demand of about two million tonnes for many years. In contrast, China’s construction steel demand is 500 million tonnes, for example.”
Seah says: “Almost any country we enter will have a much larger market than Singapore. The revenues from our trading business are already sizeable even though we only do very little trading compared to the big boys. The potential for us to scale outside of Singapore is massive so that we will seek appropriate opportunities for growth in more international markets.”
About BRC Asia
Incorporated in 1938, BRC Asia is a leading Pan-Asia prefabricated reinforcing steel solutions provider headquartered in Singapore and listed on the Singapore Exchange S68 . BRC offers a full suite of reinforcing steel products and services, including standard-length rebar, cut and bend services, prefabrication services, and standard and customised welded wire mesh for the building and construction industry. The company’s website is https://www.brc.com.sg
About kopi-C: The Company Brew
kopi-C is a regular column by SGX Research in collaboration with Beansprout, a MAS-licensed investment advisory platform that features C-level executives of leading companies listed on SGX. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations
