Organizational Transformation

ORGANIZATIONAL TRANSFORMATION

Birth

Birth allude to the establishing of an association. Hang Tuah Coffee story began way back before 1955. The founder, Allahyarham Tn. Hj. Zainal Bin Hj. Said had visualized his dream to establish a Malaysian style of coffee powder or more to known as Kopi-O under the brand of Hang Tuah, a Malay warrior. According to folklore, his idea was not in favor of the British, which occupied Malaya during that time, because Hang Tuah's name could provoke and made a significant impact on the independence of Malaya. And so, during this time, the coffee he brewed were branded as "Chap 3 Student" (3 Student Brand).

        Soon after the independence, on the eve of 31st August 1957, Tn. Hj Zainal had started to produce and market Hang Tuah Coffee Powder Mixture (Hang Tuah Mixed Coffee Powder). Back then, he was the barrister, and the marketer of the whole bean, ground coffee, and spices. The business was started as a small family based type of company.

        In the beginning, the operation was conducted in a small enterprise, located in Sungai Lokan, Seberang Perai, Penang. In 1958 Tuah Store was established. During his tenure, Mr. Hj. Zainal had expanded and grew his Kopi-O business nation wide. On the 20th of July 1974, A new facility (P2) was built to replace the old coffee factory in Sungai Lokan as part of the expansion plan. Due to the high demand of Hang Tuah coffee's in the market, this new establishment was built to cater large inventory of raw coffee beans, finished products and marketing office.

Growth

After 28 years operating from P2, the demand for this unique Malaysian coffee, has increased tremendously that required Hang Tuah coffee to expand our establishment to support production and storage of our products. In 2002, Hang Tuah has again built and moved into its latest facility (P3), located in Taman IKS PERDA, Kubang Menerong, Tasek Gelugor, Penang. Aligned with modernization of Malaysia and its technology, Hang Tuah has built the P3 with adopting and synergizing with Spanish methodology, technology and machinery.

        As part of their Corporate Social Responsibility (CSR) on becoming environmentally friendly organization, P3 is equipped with a Smoke Control System that controls and filter smokes that being produced by this facility by only allowing clean smoke (no black soot or odor) to be released to the environment. With this move, the surrounding environment the population is not affected by our operation.

        With its ample space, most of their company's Operating Divisions from Logistics, Manufacturing, Production, Human Resource, Research and Development, Quality and Division are based in P3. However, the Sales and Marketing Division is located in Kuala Lumpur.

        Since production started in 1957 in a small cottage in Sungai Dua, Seberang Perai, the Hang Tuah brand of coffee is well regarded for its coffee powder, strong taste and aroma. The family-run business is banking on both the export and local markets to grow. Tuah Marketing Corp Sdn Bhd managing director Mohd Shahrizal Zoal said quality coffee beans and the right amount of coffee powder and sugar mix was the success formula in winning customers over the past five decades. The management styles of his father and grandfather were quite similar. They have been guided by the principle of ensuring top quality. Initially they sourced the coffee beans from Banting but later they decided to import higher grade beans from Indonesia.

Decline

From the year 2014 to 2017 the company’s annual revenue in the last three years was between RM7mil and RM9mil. However, they expected a 10% to 20% growth this year. In the early days the management did not emphasise on branding and packaging and did not obtained loans for expansion. However, the company had applied for grants and SME loans for its business development recently.

Though it is readily available in most supermarkets and hypermarkets throughout Malaysia, Penang-born instant coffee brand Kopi Hang Tuah has been largely unknown in urban markets. It is due to the the trend today is different as consumers prefer to buy in bulk to stock up at home. Challenges ahead include the escalating oil and commodities prices that have pushed up production cost. As they expect commodity prices to continue to surge, the company have no choice but to pass on some of the cost increase to the consumers. Coffee beans, which used to cost around RM4 per kilogram, have at least doubled in price. Despite the current high inflation and unstable economy, coffee still would remain a favourite among the people.

In a bid to change this, the brand appointed GOVT KL to help create a new marketing strategy and target a new brand audience. The duo recently launched a TVC to rebrand Kopi Hang Tuah, after receiving a grant from the Ministry of Agriculture. Meanwhile, the agency has also been further tied in to work on its sustenance campaign across product packaging designs, POSM, TV, radio, print, and social media channels.

They realised that the product’s name posed to be a gift and a challenge. Its legacy and what it stood for were something that they couldn’t ignore as the name Hang Tuah belonged to a Malaysian warrior in ancient Melaka. Having studied the brand’s heritage, GOVT turned both the brand name and the company’s stringent bean selection process into a simple 15-sec TV commercial – showcasing two beans battling it out to be accepted as the chosen bean in Kopi Hang Tuah’s product.