AGROMATE Holdings Sdn Bhd, an integrated fertiliser manufacturer and distributor, turns 40 this year. Founded in 1979 by Raymond Tang, the company whose first office was a rented lot in Shaw Parade in downtown Kuala Lumpur has grown to become one of the largest fertiliser suppliers in Malaysia, supplying an estimated 25% of all fertilisers used in the country.
Raymond started off by working from the age of 15 for his father in Hoon Thai, a traditional commodities trader based in Kuala Lumpur, carrying heavy sacks of produce with a weekly wage of four ringgit. Raymond’s father, who migrated from Guangzhou to Singapore due to poverty in his homeland, had moved to Malaya after World War II and in 1965 set up his business in Kuala Lumpur.
Raymond continued to work for his father while his two brothers opted to further their studies. His entrepreneurial instincts soon led him to become a distributor for a German fertiliser company. The business was carried out through his father’s shop premises but Raymond struck out on his own after several years to set up Agromate.
“Through his contacts as a distributor, he came to know the more influential fertiliser dealers in the country, some of whom were of Teochew heritage like himself. They became his financial backers by subscribing to part of the RM30,000 start-up share capital, ” says Raymond’s elder son Edward, 41, who effectively took over as chief executive officer in September.
Raymond, who continues as Agromate chairman, had at that time also convinced his financial backers to be his guarantors for a credit line of US$6mil, a princely sum in those days, from Philadelphia-based fertiliser company Woodward & Dickerson Inc.
“They stuck their necks out for him because they knew him to be trustworthy and dependable in his business dealings. He has always been a man of his word and stands by it, ” Edward says.
That trust has been repaid. The company started with only six employees and in the first year of operations made RM12mil in sales. Today, the company has more than 250 employees and had a sales turnover of RM2.1bil in 2018.
Over the years, Raymond built up the company, establishing Agromate’s market presence and attracting foreign investors. Oslo-based Norsk Hydro ASA, a company with interests in oil and gas as well as fertiliser, was the first as it started acquiring stakes from the mid-1990s.
Norsk Hydro would eventually own 49% of Agromate and the company became known as Hydro Agromate Holdings Sdn Bhd in 1999. In 2006, Agromate reverted to its original name as a restructuring of Norsk Hydro in the mid-2000s saw Raymond buying back substantial Norsk Hydro’s stake by 2006. In July 2012, one of Japan’s largest general trading firms, Itochu Corporation, acquired a 25% stake in Agromate for an undisclosed sum.
Edward, who has a background in agriculture, now has the responsibility to ensure that the culture of teamwork and trust that his father worked so hard to inculcate in Agromate continues. Younger brother Eric, 33, who has worked in investment-banking before, serves in the company’s treasury and investment department.
“My biggest challenge is to ensure that my father’s legacy, the culture he worked so hard to build, carries on, especially as we grow as a business. That is the challenge which is bigger than the business and without it, it’s harder to bind the company together, ” Edward admits.
The Agromate Group has expanded to eight subsidiaries and has a 25% stake in Bursa Malaysia-listed plantation firm Golden Land Bhd. Its activities cover distribution both locally and globally, warehousing and the manufacturing of its own Ag-tech brand of fertilisers. It has a global market presence in 28 countries and owns or leases warehouses across Malaysia and Indonesia. It also owns a compound fertiliser manufacturing plant in Lahad Datu with a 200,000MT production capacity.
Edward says trust and dependability were traits that were important to Raymond.
“My father has always been a man of his word; he takes it very seriously and a deal is a deal. At the same time, he’s also not calculative and will not insist on a rigid enforcement of contracts if a customer or supplier is in financial constraints. Instead, he’s always willing to listen and renegotiate terms in the best interests of all, ” Edward adds.
Raymond always took a holistic approach in his relationships with employees, customers and suppliers. This can be attested to by the long-serving staff, some of whom have been with Agromate since the very beginning, as well as customers and suppliers.
“He’s always his humble self, always passionate about people and treats everyone in Agromate as family, taking time to talk to them. He is never envious of those who later move on, and encourages them as he’s more than happy to give his advice, even to those who have become our competitors, ” Edward says.
As for growth, Agromate has a vision to be one of the leading integrated fertiliser distributors in the region.
“We shall combine old wisdom with new ideas to take our company to the future, ” says Edward.