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Me & My Money Series (Sunday Times)
Jan 16, 2011
me & my money
The son also rises in the business of solar systems
Entrepreneur Frank Phuan followed in his father's footsteps by making solar panels
By Lorna Tan, Senior Correspondent
If things go as planned, the China market will be an important revenue generator for entrepreneur Frank Phuan, who plans to venture into the energy market in Tianjin, 150km from Beijing, later this year.
'With the popularity of renewable energy in Tianjin Eco-City, we expect to achieve a tripling of our current annual turnover of more than $10 million,' said the 34-year old marketing director and co-founder of solar panel maker Sunseap Enterprises.
Mr Phuan practically grew up in the solar business, as his father is also in the same line. The latter, Mr Phuan Pui Jong, set up his company Compo Enterprises, which makes solar systems, in 1978.
While Compo's solar systems are for export to Europe and the United States, the younger Mr Phuan's solar panels can be connected to a country's energy grid and can also be leased, a service that he will be marketing in Tianjin.
In fact, Sunseap installed the first solar grid-connected system here in March 2006. Since then, the 14.5kw rooftop system in the German European School has generated 85MW of power.
Mr Phuan co-founded Sunseap with his father in 2000, with an initial investment of $300,000, after he graduated from Nanyang Technological University with a degree in materials engineering that year. Sunseap's client base includes the Housing Board and the Khoo Teck Puat Hospital.
Not content with running one company, Mr Phuan has set up seven other businesses since then. Together with three partners, he co-owns integrated marketing company Spoc Solutions, which provides events management, branding and consultancy services.
His other businesses include a creative agency, a company that handles conventions and exhibitions, an online marketing company and a food and beverage company. The latter is comprised of three R Burger outlets in Ion Orchard, Market Street and Collyer Quay.
Mr Phuan, who is single, has a steady girlfriend.
Q Are you a spender or saver?
In my early business years, I put almost all of what I earned back into running new businesses. I was simply too eager to start on new ideas and jumped at any potential opportunity.
When I realised that I was stretching myself too thin, I decided to force myself to slow down and evaluate what I was doing. Thankfully, some of the investments paid off, and I have learnt to be prudent since. Now, I save 30 per cent of my earnings.
Q How much do you charge to your credit cards every month?
I have three credit cards, and charge around $3,000 each month to them. About half of that sum is for business-related expenses and the other half for groceries, petrol, dining and shopping. Settling the bills monthly is a must.
I don't like holding on to too much cash, so I draw an average of $200 a week from the ATM.
Q What financial planning have you done for yourself?
My previous experiences with shares ended up in losses, and I've no time currently to monitor the share market. So I do not dabble in shares. The majority of my investments are in businesses, and I have cash kept in offshore accounts that earn a higher interest than what is offered by banks here. My main offshore account is in Australia, and earns an interest of 6 per cent annually. I also have another account in Hong Kong.
Q Moneywise, what were your growing-up years like?
I'm from a small family of four, including my younger sister. As a child, I lived a comfortable life without financial worries, as my dad's income from his business was able to support the entire family. Despite this, my mum was a thrifty person who taught me to spend within one's means and to be a financially independent adult. My mum helps out in my dad's business. We lived in a three-room HDB flat in Holland Village till I was five. That year, we moved to a four-bedroom condo in Jurong West. In 1996, we moved to a 1,399 sq ft condo in Jurong East, which was bought for $500,000.
Q How did you get interested in investing?
In 2002, I learnt about how financial freedom can be provided by passive income, from a book written by Robert Kiyosaki. Till then, I thought that earning a high salary in the rat race was the only way to go. It motivated me to look for various flows of passive income.
Since then, I have focused on building businesses that can be run like an engine, to churn passive income. Sunseap and Spoc have been consistently reporting profits for the last few years.
My target is to be able to focus entirely on the solar business, and to be able to collect $500,000 in annual dividends in the next five years from each of my other companies, which are run by my partners.
When I set up a company, I look for scalability and growth in that sector. Familiarity is not an issue, but one of my business partners should be an expert in that field to provide traction.
Q Do you have investments in China?
We have been studying the China market and are planning to build a solar module factory in the Tianjin Eco-City to launch our solar system leasing model there. It will be an estimated $15 million investment, with a first-phase investment of $5 million this year.
We are confident about the popularity of renewable energy in the Eco-City. The Chinese government has mandated that for every building in the Eco-City, 20 per cent of its power usage has to come from a renewable energy source, such as geothermal or solar energy.
Sunseap's competitive edge lies in its ability to provide a leasing scheme that will provide relief to customers on maintenance and parts replacement matters. I'm on the lookout for potential investors in my China venture.
Q What's your outlook on China's economy and your investments?
China is a giant and looks set to overtake the United States as the No. 1 consumer market in the world, because of its sheer size and numbers. I'm bullish on the solar energy market there, which looks set to explode this year.
Q What property do you own?
I do not own any property. I live with my parents. We've just moved from the condo in Jurong East to a 3,036 sq ft four-storey cluster house in Pasir Panjang. My parents bought it for $2 million last year. I do not know its current value.
Q What's the most extravagant thing that you have bought?
Perhaps the most extravagant thing I have done is to travel across Europe from Istanbul to Helsinki with a friend over two months in 2000. I spent more than $15,000, which was saved over three years.
Q What's your retirement plan?
When I was much younger, my friends and I hoped to retire when we were 30 years old with $1 million. Now, I do not think I will be thinking of retirement any time soon, because I love my work too much.
But I think $5 million is a good sum to retire with your spouse. That will earn enough interest per month for two persons to be financially independent. I hope to earn that amount by the time I'm 38.
Q Home is now....
I live with my parents in a cluster housing development in Pasir Panjang.
Q I drive....
A black Lexus RX 350. I love the size and height of SUVs.
lorna@sph.com.sg
--------------------------------------------------------------------------------
WORST AND BEST BETS
Q What has been your worst investment to date?
In 2008, I decided to partner a group of investors to raise money from the capital markets to build a second-generation hi-tech thin-film solar manufacturing plant. Everything was on track until our United States-based technology partner pulled out last year, citing the financial crisis and poor market results.
The fees from lawyers, consultants and other professionals cost our group a total of more than $5 million over three years, and it eventually came to nothing. I lost $1 million.
Q And your best investment?
My best investment has to be both my solar company and marketing company, which I spent my last 10 years building. The paid-up capital for the marketing company is $150,000, and it is now a profitable company with an average annual revenue of above $10 million.
My father and I have so far invested $1.5 million in Sunseap. I hope to expand the solar company to a size where I can get it listed within the next five years.
me & my money
The son also rises in the business of solar systems
Entrepreneur Frank Phuan followed in his father's footsteps by making solar panels
By Lorna Tan, Senior Correspondent
If things go as planned, the China market will be an important revenue generator for entrepreneur Frank Phuan, who plans to venture into the energy market in Tianjin, 150km from Beijing, later this year.
'With the popularity of renewable energy in Tianjin Eco-City, we expect to achieve a tripling of our current annual turnover of more than $10 million,' said the 34-year old marketing director and co-founder of solar panel maker Sunseap Enterprises.
Mr Phuan practically grew up in the solar business, as his father is also in the same line. The latter, Mr Phuan Pui Jong, set up his company Compo Enterprises, which makes solar systems, in 1978.
While Compo's solar systems are for export to Europe and the United States, the younger Mr Phuan's solar panels can be connected to a country's energy grid and can also be leased, a service that he will be marketing in Tianjin.
In fact, Sunseap installed the first solar grid-connected system here in March 2006. Since then, the 14.5kw rooftop system in the German European School has generated 85MW of power.
Mr Phuan co-founded Sunseap with his father in 2000, with an initial investment of $300,000, after he graduated from Nanyang Technological University with a degree in materials engineering that year. Sunseap's client base includes the Housing Board and the Khoo Teck Puat Hospital.
Not content with running one company, Mr Phuan has set up seven other businesses since then. Together with three partners, he co-owns integrated marketing company Spoc Solutions, which provides events management, branding and consultancy services.
His other businesses include a creative agency, a company that handles conventions and exhibitions, an online marketing company and a food and beverage company. The latter is comprised of three R Burger outlets in Ion Orchard, Market Street and Collyer Quay.
Mr Phuan, who is single, has a steady girlfriend.
Q Are you a spender or saver?
In my early business years, I put almost all of what I earned back into running new businesses. I was simply too eager to start on new ideas and jumped at any potential opportunity.
When I realised that I was stretching myself too thin, I decided to force myself to slow down and evaluate what I was doing. Thankfully, some of the investments paid off, and I have learnt to be prudent since. Now, I save 30 per cent of my earnings.
Q How much do you charge to your credit cards every month?
I have three credit cards, and charge around $3,000 each month to them. About half of that sum is for business-related expenses and the other half for groceries, petrol, dining and shopping. Settling the bills monthly is a must.
I don't like holding on to too much cash, so I draw an average of $200 a week from the ATM.
Q What financial planning have you done for yourself?
My previous experiences with shares ended up in losses, and I've no time currently to monitor the share market. So I do not dabble in shares. The majority of my investments are in businesses, and I have cash kept in offshore accounts that earn a higher interest than what is offered by banks here. My main offshore account is in Australia, and earns an interest of 6 per cent annually. I also have another account in Hong Kong.
Q Moneywise, what were your growing-up years like?
I'm from a small family of four, including my younger sister. As a child, I lived a comfortable life without financial worries, as my dad's income from his business was able to support the entire family. Despite this, my mum was a thrifty person who taught me to spend within one's means and to be a financially independent adult. My mum helps out in my dad's business. We lived in a three-room HDB flat in Holland Village till I was five. That year, we moved to a four-bedroom condo in Jurong West. In 1996, we moved to a 1,399 sq ft condo in Jurong East, which was bought for $500,000.
Q How did you get interested in investing?
In 2002, I learnt about how financial freedom can be provided by passive income, from a book written by Robert Kiyosaki. Till then, I thought that earning a high salary in the rat race was the only way to go. It motivated me to look for various flows of passive income.
Since then, I have focused on building businesses that can be run like an engine, to churn passive income. Sunseap and Spoc have been consistently reporting profits for the last few years.
My target is to be able to focus entirely on the solar business, and to be able to collect $500,000 in annual dividends in the next five years from each of my other companies, which are run by my partners.
When I set up a company, I look for scalability and growth in that sector. Familiarity is not an issue, but one of my business partners should be an expert in that field to provide traction.
Q Do you have investments in China?
We have been studying the China market and are planning to build a solar module factory in the Tianjin Eco-City to launch our solar system leasing model there. It will be an estimated $15 million investment, with a first-phase investment of $5 million this year.
We are confident about the popularity of renewable energy in the Eco-City. The Chinese government has mandated that for every building in the Eco-City, 20 per cent of its power usage has to come from a renewable energy source, such as geothermal or solar energy.
Sunseap's competitive edge lies in its ability to provide a leasing scheme that will provide relief to customers on maintenance and parts replacement matters. I'm on the lookout for potential investors in my China venture.
Q What's your outlook on China's economy and your investments?
China is a giant and looks set to overtake the United States as the No. 1 consumer market in the world, because of its sheer size and numbers. I'm bullish on the solar energy market there, which looks set to explode this year.
Q What property do you own?
I do not own any property. I live with my parents. We've just moved from the condo in Jurong East to a 3,036 sq ft four-storey cluster house in Pasir Panjang. My parents bought it for $2 million last year. I do not know its current value.
Q What's the most extravagant thing that you have bought?
Perhaps the most extravagant thing I have done is to travel across Europe from Istanbul to Helsinki with a friend over two months in 2000. I spent more than $15,000, which was saved over three years.
Q What's your retirement plan?
When I was much younger, my friends and I hoped to retire when we were 30 years old with $1 million. Now, I do not think I will be thinking of retirement any time soon, because I love my work too much.
But I think $5 million is a good sum to retire with your spouse. That will earn enough interest per month for two persons to be financially independent. I hope to earn that amount by the time I'm 38.
Q Home is now....
I live with my parents in a cluster housing development in Pasir Panjang.
Q I drive....
A black Lexus RX 350. I love the size and height of SUVs.
lorna@sph.com.sg
--------------------------------------------------------------------------------
WORST AND BEST BETS
Q What has been your worst investment to date?
In 2008, I decided to partner a group of investors to raise money from the capital markets to build a second-generation hi-tech thin-film solar manufacturing plant. Everything was on track until our United States-based technology partner pulled out last year, citing the financial crisis and poor market results.
The fees from lawyers, consultants and other professionals cost our group a total of more than $5 million over three years, and it eventually came to nothing. I lost $1 million.
Q And your best investment?
My best investment has to be both my solar company and marketing company, which I spent my last 10 years building. The paid-up capital for the marketing company is $150,000, and it is now a profitable company with an average annual revenue of above $10 million.
My father and I have so far invested $1.5 million in Sunseap. I hope to expand the solar company to a size where I can get it listed within the next five years.
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