Thomas White Global Investing
Global Players

Global Players

June 2011

Olivia Lum, Group President & CEO, Hyflux Group, Singapore


Olivia Lum

Image Credit: Ken Lennox Photography

“There are no difficulties you can’t overcome when you have faced the challenges of hunger and poverty.”

— Olivia Lum, while receiving the Ernst & Young World Entrepreneur of the Year 2011 award.


Olivia Lum, founder and CEO of Singapore-based Hyflux, has often said that she is attracted by the unpredictable. This love of the unknown was perhaps the catalyst for her choice to study chemistry, but is more likely the reason why Lum is the first ever woman to be crowned Ernst & Young World Entrepreneur of the Year (2011).

Olivia Lum’s extraordinary story suggests that unpredictability might well be her raison d’être. Her childhood is an inspiring tale of immense hardship and soul-numbing poverty. It seems this difficult early life instilled within her exceptional determination and resourcefulness, which she has employed to propel her company to great heights. Today, Hyflux is one of the world’s leading suppliers of water desalination equipment, with annual revenues of over $450 million and a workforce of more than 2,300 people across various countries in Asia, the Middle East, and North Africa.

But thoughts of such wealth and success must have been far from young Olivia Lum’s mind when she was growing up in a cramped tin house with a leaking roof and no running water and electricity. She was abandoned at birth and brought up, along with several other orphans, by an old lady in what was little more than a makeshift hut in a small Malaysian village.

The leaking roof might have prevented her from sleeping peacefully, but it did not stop her from dreaming big. After her initial primary education, Lum was instructed to begin working just like the other orphans. But not one to give up easily, she tried everything from rubber-tapping to selling papayas to pay for her education as well as contribute to the family finances. Her perseverance paid off. Egged on by her impressed teachers, she graduated with a degree in Chemistry from the National University in neighboring Singapore, and found a job as a chemist with GlaxoSmithKline.

Most people would be satisfied with such progress but not Lum. It was the late 80s and her ambition was straining at the leash. In an interview with the Financial Times, she narrates how her supervisor at Glaxo was shocked that she wanted to quit and start her own business. His astonishment was not unreasonable in the small state of Singapore, whose economy at that time was dominated by multi-national companies (MNCs). The goal of the average young Singaporean was to get inside the hallowed doors of these MNCs, which offered good money and a cozy lifestyle. But Lum, who had tasted adventure when still young, turned her back to such comfort. She sold her car and apartment and used the money to set up a water treatment plant named Hydrochem, the precursor to Hyflux. Her interest in the area had grown after she helped develop such a plant for Glaxo. Lum’s natural intelligence told her that the world would soon start demanding clean water, and her keen mind sensed an opportunity.

Yet Singapore was not exactly the ideal place for original business ventures, not to mention women entrepreneurs. In many interviews, Lum narrates how it was often conveyed to her that she should simply ‘be a woman’ and fulfill her homely duties. Thankfully, she paid no heed, but the problems were countless.

A small domestic market was the least of her worries. Given Singapore’s authoritarian government and conservative society, risk-taking was discouraged. The small city-state, which once had many a rags-to-riches tale to narrate, had run dry of triumphal entrepreneurial stories. Lum herself revealed as much in an interview when she blamed the MNCs for ‘spoiling’ Singaporeans, which meant at that time no Singaporean was hungry for more.

But Olivia Lum was. Her business instincts were unerring and she was convinced that as countries the world over tightened pollution-control rules, more companies would need water treatment equipment. The demand, as well as the technology, could only improve. At the time, Lum was merely 29 and, as she herself has said, she had no money and no connections. But she had plenty of spunk and energy. Now deprived of her car, she rode on a scooter to hunt for potential customers and gradually, painfully, built the company’s credibility. As any entrepreneur will tell you, that is the biggest step toward success.

And success indeed came to Hyflux as orders began trickling in. But never one to rest on her triumphs, Lum bravely decided to expand to China, although the company was still in its infancy. The move paid off handsomely, and today China accounts for 20% of Hyflux’s business. Lum believes she received the crucial first-mover advantage over competitors such as GE and Suez with this strategy.

In fact, at the time of its launch, Hyflux was a company whose time had come. The firm opened its doors when Singapore’s dependence on Malaysian water supplies was a vexing concern for its citizens, and its government was introducing an ambitious program to achieve water self-sufficiency. The company’s role in this project and another national project on water-recycling strengthened its reputation and projected its image as a leader in the field.

I decided the world was going to run out of clean water. No one wanted to start a water business then, but I only had one passion. I thought, naively, that I wanted to save the world.

— Olivia Lum on her decision to start a water treatment business.

Its owner’s entrepreneurship drive meant that the company focused substantially on innovation. With Lum herself heading the company’s R&D department, Hyflux, most notably, developed a special ultrafine membrane filter that is today the defining quality in all its products. Hyflux recently completed building the biggest desalination plant in Asia on Singapore’s west coast, and is constructing similar plants in China and Dubai. For Lum, the horizon is only expanding. She now wants to set up shop in India and is gradually shifting from small-scale projects to big industrial ones in China and elsewhere.

Still, Olivia Lum is facing her biggest challenge yet. The company’s moderate size means that resources for its famed R&D and industrial projects, which need heavy investments, are limited. Though Hyflux’s share prices are buoyant, to say the least, she knows very well that unless she finds viable financing methods for these big-ticket projects, the company’s ambitious plans might not take off.

Two weeks ago, while receiving her entrepreneurship award at Monte Carlo after pipping 48 other well-known entrepreneurs at the post, the 50-year-old told the world that “there are no difficulties you can’t overcome when you have faced the challenges of hunger and poverty.” It is perhaps this strong self-belief that has inspired Hyflux’s grand motto: ‘Quenching the World’s Thirst.’ That said, Olivia Lum’s thirst to be the best may be unquenchable.

 

 

 

 

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