From building houses to brewing beers

S’pore contractor is happy concocting his own brews

For small-time contractor Ernest Ng, the recent property boom largely passed him by.

High material costs and the difficulty in getting skilled labour has made him reconsider the wisdom of staying on in the business.

“The Government has said that the construction industry will be one of the sectors that will remain buoyant. But for small timers like it’s getting increasingly difficult to remain in business,” Mr Ng, 53, who became a contractor nearly two decades ago said.

The former soldier joined his contractor brother after leaving the army and a seven-year stint as a car salesman.

“I realised that without a university degree I couldn’t have risen beyond the rank of major in the army and it would have taken my lifetime to earn a million. The car business lacked honesty. I had to extol the virtues of a car even after it had been badly bashed up in an accident. So, I joined my brother.”

But after 18 months with his brother, he decided to strike out on his own in 1989 and started Blueprint Construction, which for the last few years has had an annual turnover of about $5 million, building bungalows and other small construction jobs.

“We did reasonably well for a while and even won a few awards for the quality of our conservation projects. Despite the currency crisis of 1997, Blueprint remained profitable up to 2001,” he said.

Now 18 years later, he has stopped taking on new jobs and wants out. At present he is working on a $3.5-million bungalow in East Sussex Lane.

“I tried getting my 33-year-old civil engineer from Nanyang Technological University to take over … he wants to make money but doesn’t want to bear the risk.”

So, now Mr Ng is looking for a buyer. If none can be found, he will place his some two dozen workers, who are mainly Thai and some of whom have been with him for almost as long as the business, with his brother.

“It was getting too tough to keep pace with the rising cost of building materials,” Mr Ng said. When he successfully tendered for three projects last year at what he thought was breakeven prices, little did he know of the lurking dangers. “For example sand, because of an embargo by the Indonesian government, shot up from $14 per tonne in 2006 to $60 per tonne in 2007, and now hovers at $40 per tonne. Construction steel was $800 per tonne in 2006, $1,100 in 2007 and $1,800 this year.”

And with the crash of the stock market, the smaller projects are dryingup as “many investors got burnt”, saidMr Ng, who has a 17-year-old daughter and14-year-old son.

“I don’t think my daughter is suited for the rough life of a contractor, and I don’t think my son would be interested in the business,” he added.

“Between 1997 and the end of 2006, many construction companies, both big and small have folded, suffering severe losses,” he said.

The volatility of the construction business made him think of diversifying. A trip to South Africa’s Kruger Park 10 years ago got him interested in beer brewing when a couple of soldiers there gave him a sample of their own home brew.

In May of last year he got a site in the growing mini-entertainment hub of Dempsey, next to Samy’s banana leaf curry restaurant. The RedDot Brewhouse opened for business last December after an investment of $1.5 million. The name refers not to the name Singapore was given by former Indonesian President Habibie, but to the markings on the packages of beer ingredients he bought in South Africa.

All the machinery, including the micro-brewery from China were designed by Mr Ng, who is now an avid reader on the subject. He even concocts his own special brews, including a green-coloured beer that contains chlorophyll.

Some 60 per cent of his revenue comes from food, while beer brings in 40 per cent but contributes a higher proportion to profits. The RedDot Brewhouse can cater to some 200 people, including outdoor dining. Mr Ng hopes to recoup his investment in a couple of years.

Construction’s loss has become the tippler’s gain.

Source : Today – 14 Aug 2008