Celebrating 50 years: A look back at the history of Sarawak Biscuit & Food Manufacturing

THIS year marks Sarawak Biscuit & Food Manufacturing Sdn Bhd’s 50th anniversary celebration. In this first of a two-part report, we take a look at the establishment of the company up until the fire that destroyed its factory in 1979.

OVER the past half-century, Sarawak Biscuit & Food Manufacturing (SBFM) Sdn Bhd has grown from a small factory to become an internationally recognised food manufacturing company.

With a vision to provide high-quality food products to the local and global markets, the company successfully overcame various challenges, recorded many successes throughout the decades, and strengthened its position in the food industry.

The birth

In 1974, John Tan met with six Sarawakian businessmen and they decided to start a biscuit manufacturing company in Sibu. Originally from Ipoh, Perak, the now 82-year-old Tan was the prime mover of Sarawak Biscuit & Food Manufacturing Sdn Bhd.

After graduating from the University of South Wales in Australia in 1968 with a degree in economics, he followed his parents to Sibu to help manage their tobacco business.

“That was when I noticed a lot of biscuits and instant noodles being imported from West Malaysia by a few local Chinese companies. In fact, apart from a factory producing biscuits in Kuching, I think there was not enough capacity to supply the total consumption of biscuits in Sarawak.

“I thought, ‘This is a good business venture’, and started making my own plan to start a biscuit factory,” he said in a telephone interview with See Hua Group newspapers.

Between the late 1960s and early 1970s, Tan’s family tobacco business was suffering from competition from overseas brands like Benson & Hedges and Rothmans, who eventually took over the market.

Coincidentally, Tan came to know about a group of local biscuit importers who were planning to start a biscuit factory in Sibu.

“They were biscuit importers and they also saw the potential in the huge amounts of biscuits being consumed, and they wanted to start a factory.

“These local businessmen had been planning to open a biscuit factory for years but somehow they did not know how to start the business. Then one of them, Mr Kueh, heard about my interest and came to see me and asked me to join them.

“I dropped my own plan and the seven of us contributed RM100,000 each to start the company that we named as Sarawak Biscuit & Food Manufacturing Sdn Bhd,” he said.

The amount they raised, however, was insufficient and Tan applied for a RM1 million loan from Malaysian Industrial Development Finance (MIDF) and an additional sum from a bank.

“At the same time, we bought three acres of land at Jalan Ulu Lanang at RM30,000 per acre.

“Later, we realised the land was small for future expansion, so we bought another two acres next to the land that we had already purchased.

“It was agricultural land and we applied to convert it into industrial land. At that time, however, the government did not allow us to convert the land because they already had an industrial estate planned in Upper Lanang.

“They said we might be able to use the land in two or three years, but I said we wanted the land immediately. We could not wait that long and the government finally agreed to give us the land.

“Our loan from MIDF and manufacturing licence were approved almost at the same time. All that came in very nicely and handy, so we proceeded and built the factory for just RM300,000.

“It was a big factory, with a huge brick oven built by oven-makers from Singapore,” he said.

Start of operation

SBFM officially started its operation on Nov 9, 1974 with two biscuit-production lines for sweetened and unsweetened assorted biscuits under the ‘Tiga Pokok’ brand.

The machines that they bought from Ipoh were able to produce about three tons of biscuits a day.

“Halfway through, I thought about how we could try to produce instant noodles since we had a big space in the factory. I thought we could utilise the space for the noodle machines.

“In hindsight, the idea was quite silly. So we went to a very popular instant noodle manufacturing company in Ipoh and not long after we returned to Sibu, we started our own ‘Happy’ brand instant noodle production,” he said.

Facing challenges

Tan said the first three years after they began operating was difficult as the people were quite sceptical of their products.

He also said at that time, biscuits were packaged and sold in 3kg and 5kg tin containers, but there was no factory in Sibu that could supply them with any tin.

“So, we went to Singapore to buy tin-making machines and built our own tin factory at the same location. We managed to get people from Kuching to help us with the tin production.

“It was not economical to get our tin supply from Kuching because at that time, to send empty containers all the way from Kuching using the ferry was very troublesome,” he said.

He said they suffered some losses in those three years due to fierce competition from a biscuit company from Kuching, but were able to do “quite well” because they produced their own tins.

“We fought with the Kuching biscuit company for market share. I remember at the time when we started, the competitor dropped their biscuit prices, selling three tins and with one tin for free.

“It took three years for us to achieve full production, but we fought very hard and managed to be competitive and increase our market share,” he enthused.

Market reception

According to Tan, SBFM products came out to a certain quality accepted by consumers.

“We were in fact lucky that we started the biscuit and noodle (production) one after another. The biscuit factory started and we kept on making sales, with the tin production also running well to keep up with the biscuit demand.

“A few months later, the noodle factory also started and came out quite well. Fortune smiled on us as everything we planned ran smoothly and nicely,” he added.

During the height of their sales, Tan said SBFM produced 20,000 packets of instant noodles and three tons of biscuits per day, while their tin factory produced between 1,000 and 2,000 tins per day.

The fire

In 1979, SBFM’s factory caught fire at around midnight, causing the company to suffer hundreds of thousands of ringgits in losses.

Tan believed the fire started from the noodle machine.

“A lot of people claimed that our factory was not doing well, and that we burned it for an insurance claim which was absolutely not true.

“It was a terrible and very sad tragedy because it happened when everything was going well. Fortunately, it did not involve any injuries or casualties.”

The incident gave Tan many sleepless nights as the company had a huge amount of debt to pay off.

“I negotiated and managed to convince them (lenders) to delay the repayment,” he said.

Rising from the ashes

Being a responsible employer to about 100 workers, Tan chose not to give up despite facing financial difficulty due to the fire.

When the factory burned down, the whole roof collapsed and left a huge gap in the middle section of the building.

“Most of the raw materials and finished products were destroyed, but the machines to make the instant noodles, biscuits and tins were not affected,” he said.

Deciding to restore the affected section, Tan and his workers worked deep into the night for three months to rebuild the roof, clear debris, and replace the raw materials.

“What the loaners didn’t expect was for us to restart production so fast. Instead of waiting two or three years to rebuild the factory, we resumed production three months after the fire.

“Everybody was surprised”

It did not take long for SBFM to recover its losses as business picked up very quickly after the fire.

Tan said at the time, there was also a rumour that the rival biscuit company in Kuching would not supply biscuits to SBFM customers when in actual fact, there was a supply shortage in the market.

He said because of the rumour, many retailers and shopkeepers came back to the company for their biscuit supplies.

Expressing immense pride at how SBFM was able to resume production just three months after the fire, Tan said the tragedy, in a way, had brought them luck.

“We were literally, as the Chinese proverb goes, the phoenix that rose from the ashes.”