Sheng Siong Joins Billionaire Club: Family Fortune Surges To S$1.57B Amid COVID-19

Sheng Siong Joins Billionaire Club: Family Fortune Surges To S$1.57B Amid COVID-19

Following the Covid-19 outbreak, many Singaporeans have been flocking to the supermarkets to stockpile on groceries and household essentials with the fear that supplies will soon run out.

Minister Chan Chun Sing has assured that Singapore has in place a “contingency scenario” which it has planned out for “many years.”

He added that the Government has been actively working with essential firms such as NTUC Fairprice, Sheng Siong and Dairy Farm International to increase Singapore’s stock of food and essential supplies over the last few months.

Even now with the circuit breaker measures in place, Singaporeans don’t have anywhere else to shop besides supermarkets so it has definitely caused a surge in grocery spending.

The result? Shares of Singapore-listed Sheng Siong Group rose to a record high last Wednesday (April 15) — its stock has rallied over 30 per cent since a March 19 closing low.

According to the Bloomberg Billionaires Index, the family’s combined fortune, based on their 57 per cent stake in the supermarket chain mainly held by Lim Hock Chee and his two brothers, has surged to US$1.1 billion (S$1.57 billion).

Lim has always been in Singapore’s top 50 richest, and his net worth has been gradually increasing each year — from S$345 million in 2012, to S$870 million in 2019.

From Selling Pork To Running S’pore’s Third Largest Supermarket Chain

Sheng Shiong Group is the third largest supermarket chain in Singapore, ran by the Lim family since 1985.

Lim brothers / Image Credit: AsiaOne

Lim is the CEO, while his older brother Lim Hock Eng is executive chairman and younger Lim Hock Leng is managing director.

Sheng Siong’s business journey is a rags-to-riches story. Lim is the son of a pig farmer, and he started off running a small stall selling pork alongside his wife.

At the height of the business, the family had 3,000 pigs and lived on a sprawling 90,000 square-foot farm.

At one point of time, the farm was facing an “over-supply”, so Lim and wife rented a stall at one of the now-defunct supermarket chain stores in Ang Mo Kio to sell chilled pork.

Just when the couple managed to clear the excess stock, the owner of the supermarket chain ran into some financial problems and had to put up some stores for sale.

sheng siong supermarketFirst Sheng Siong supermarket at Ang Mo Kio / Image Credit: Sheng Siong

With the government phasing out pig farms and with seed capital from their father, the Lim brothers took the plunge and ventured into retail business by taking over the Ang Mo Kio supermarket and turning it into the first Sheng Siong store.

Today, his family operates a chain of 61 supermarkets in Singapore. This includes its first overseas supermarket in Kunming, China, which it opened in 2017.

Last year, Sheng Siong posted a net income of $75.8 million on revenue of $991.3 million.

Regulatory filings also showed that Lim bought more shares in the company last month through an account jointly held with his wife — a move that was probably inspired from previous virus outbreaks.

When people stayed away from restaurants during Sars (severe acute respiratory syndrome), we enjoyed brisk business because more people started buying food to cook at home.

– Lim Hock Chee in a 2008 interview with The Straits Times

Sheng Siong’s Secret To Low Prices

According to Lim, the secret to its low prices is the way it maximises profit margins by constantly challenging itself to churn out higher turnover per square foot of retail space.

For example, if we can make $10 instead of $4 for every square foot of retail space, we can cut costs effectively and offer very reasonable prices to customers.

One way of doing this is to provide speedier service so that more customers can be served in the same period of time.

– Lim Hock Chee in a AsiaOne interview

He is also quick to dispel the myth that low prices come at the expense of quality.

“We have been able to keep our prices low because we are increasingly going directly to the product sources, thus eliminating the middlemen,” he explains.

Next Step: Banking?

sheng siong singaporeLim Hock Chee, CEO of Sheng Siong / Image Credit: Prabook

In a separate ST interview last year, Lim acknowledged that Sheng Siong only has a 15 per cent market share in Singapore.

“There is room for expansion. … Our vision is not confined to the Singapore market, we want to expand Sheng Siong globally.”

He added that while his past focus was to purely make money for the company, he is now more dedicated to grooming the next generation.

I see the company as a training ground for my staff to learn while they earn a living.

When you work for Sheng Siong, we train you to think like a boss. All employees, regardless of their position, are trained the same way.

– Lim Hock Chee in a 2019 interview with The Straits Times, Lunch with Sumiko

Moving forward, Sheng Siong also has plans to join Singapore’s digital banking scene.

Sheng Siong Holdings, a private entity owned by the Lims, is part of a consortium led by local gaming company Razer that has applied for a digital banking license.

Razer takes a 60 per cent majority stake, while the other partners such as FWD and Carro, hold the remaining equity interest.

Called Razer Youth Bank, they have applied for a digital full bank license and are aiming to cater to “underserved youth and millennials” through the innovative use of technology.

Featured Image Credit: RSM Singapore / Singapore Business Review

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