A talk with Mr Rex Pennefather, General Manager of ASSA ABLOY Opening Solutions (M) Sdn Bhd

A TALK WITH ASSA ABLOY

on unlocking new experience to a more open world through innovative access solutions

Since its formation in 1994, ASSA ABLOY has grown from a regional supplier of mechanical locks to becoming an international group with 48,000 employees and operations in over 70 countries. Being a global leader in access solutions, ASSA ABLOY stands committed to delivering an extensive range of access solution products to satisfy the need for security, safety, and convenience.

B&I recently met with Mr Rex Pennefather, the General Manager of ASSA ABLOY Opening Solutions Malaysia Sdn Bhd, who shared his thoughts on Malaysia’s market trend and consumer behaviour for smart door opening solutions.

B&I: Can you give us a brief overview of your capacity as the General Manager of ASSA ABLOY Opening Solutions Malaysia Sdn Bhd?

MR REX: ASSA ABLOY Opening Solutions Malaysia is part of the greater China and Southeast Asian business unit of the ASSA ABLOY Group. There are a total of eight countries in this business unit, with a general manager or country director domiciled in each country. For general managers like me, our core responsibility involves overseeing all business elements namely full strategic planning, P&L responsibility, channel strategy, stock and distribution management, procurement, as well as supply chain and sales partnerships.

The inner workings of our regional office are rather complex, but I am well supported by a strong team of managers who are responsible for the many different facets of the business including projects and specifications, disruptive and innovative retail channels, traditional, modern, and big box retail, distribution partners, finance, supply chain and logistics. Currently, we have about 2,000 customers that we support and service in Malaysia.

B&I: What are your views on Malaysia’s consumer behaviour for smart home solutions?

MR REX: I think Malaysia is poised for a great uptake in smart home solutions. As you may know, smart home solutions cover a wide range of products like digital door locks, smart wireless receivers, safes, CCTV and many others etc. One of the fundamental requirements to create a smart home environment is a solid network infrastructural backbone, good connectivity and ubiquitous phone coverage – Malaysia is well on its way to achieve this by strengthening its digital footprint. The country now has seven internet service providers, a growing 5G network and the government has recently launched national digital infrastructure plan, Jalinan Digital Negara (JENDELA), designed to steer the country towards greater digital connectivity by boosting the efficiency of the national infrastructure and optimising spectrum usage. In terms of demographics, Malaysia has around 77.2% urban population and 84% are under the age of 54. This is an exciting statistic for ASSA ABLOY, as these are considered the new generation of consumers with a growing appetite and willingness to adopt to smart solutions.

With these favourable facts in hand, we had expected greater and earlier uptake of smart home solutions. Although we are seeing uptakes in larger, upscale residential and commercial projects, there has been a lesser response from the typical private homeowners. I think one of the stumbling blocks in Malaysia is on the income bracket. For example, in 2019, it was reported that Malaysia’s average salary was RM3,224 and the median was RM2,442 – this is comparatively lower than the neighbouring countries in the region like Singapore and Hong Kong. As a result, smart home solutions are an expensive investment since they are usually priced upwards of RM1,000 per product.

Even though the country is still in the early adopter phase we believe with a proper financial model and easy pay type schemes we could drive volumetric uptake of these offerings. I believe people are willing to switch to smart home solutions and therefore, these products should be more widely available to everyone. ASSA ABLOY is currently in the midst of offering more lower-range products into the market ensuring greater accessibility of these solutions to the general population helping to improve their security, safety, and convenience.

B&I: What are your projections on Malaysia’s door opening solutions market, in view of COVID-19 pandemic and the current economic situation?

MR REX: Like most other industries globally, the Malaysian construction sector took a large knock because of the COVID-19 pandemic. While there were hopes and expectations that we’ll be recovering in Q1 2021, the sudden spike of infections in January

has resulted in the country’s reinstating its Conditional Movement Control Order (CMCO) throughout the first quarter of the year. Be that as it may, the government has rolled out several initiatives (albeit with stricter SOPs) for most businesses to continue their respective operations and development. If you look at the financials of the larger construction companies, most of them are profitable and delivering good results despite these challenging times I expect this will continue as we see more development projects scheduled for launch in the coming months. The interest rate is at the lowest it has ever been in a long time, so it is a good time for young, first-time homebuyers to start scouting the market for a new property.

Despite lack of international travel, we believe that Malaysia remains an attractive and stable property investment opportunity. Something that needs consideration is the growing property overhang particularly the high-end residential and serviced apartments as construction development is outpacing occupancy rate in this sector, so this is something we are following closely.

B&I: Moving forward, what are your objectives, plans and vision for ASSA ABLOY?

MR REX: From ASSA ABLOY’s perspective, the Group’s strategic direction is to lead the trend towards the world's most innovative and well-designed access solutions. Our purpose is to help people feel safe, secure and experience a more open world.

Locally, our short- and long- term objective is to become the leading commercial door opening solutions provider in the region, coupled with a robust and entrenched retail segment offering a wide range of solutions that compliment this commercial uptake. This ensures a dual market penetration and access to the various door opening lifecycles. We have also done several acquisitions recently in the market, so we will continue expanding our competitive standing through complimentary offerings in the Malaysian market.

B&I: ASSA ABLOY now has an extensive catalogue of door opening solutions including products from Yale, Hygieneplus+, and Openings Studio. Do you have any specific marketing strategy to further strengthen ASSA ABLOY’s position in the market?

MR REX: A constant flow of new, innovative and sustainable products is the most important driver for ASSA ABLOY’s growth targets. We will continue to invest heavily in our innovation and product development. Our ambition is to become an integral partner in a development project and therefore, we want to start adding and creating value from the very early stage of the process; from specifications to project delivery.

ASSA ABLOY’s latest and most relevant offering because of the COVID-19 pandemic is the Hygieneplus+ product offerings. As with most industries, the COVID-19 pandemic has driven many companies to reassess the way they do business and their market positioning. Most of them are now working on expanding their digital footprint while paying close attention to new products available in the market. ASSA ABLOY Hygieneplus+ is our latest innovation with a special coating that minimises transmission and spread of bacteria and infections from high touch surfaces. Moving forward, a lot of our new range of doors including digital locks will incorporate Hygieneplus+ coating as standard. Another trend we are focusing on will be to address the growing demand for automatic doors and touchless switches.

ASSA ABLOY has also launched our Openings StudioTM software, which is a full-featured, web-based suite of BIM software tools for creating and visualizing 3D doors, frames, and hardware objects and modifying their associated parameters for use in design, construction, and facility management. ASSA ABLOY’s Openings StudioTM offering allows architectural firms and designers access to a full populated database and centralised specification and door schedule solutions greatly enhancing their effectiveness and ability to react to, to view, adapt, and position themselves in their space.

B&I: Any other matters you may wish to highlight with respect to your corporate operations.

MR REX: ASSA ABLOY will continue innovating and redefining itself through new products, process, channels, and offerings. As with the ever-growing pressure on project development costs and demand for smart solutions; ASSA ABLOY has launched the Yale Smart Franchise in Malaysia early this year. This is our experience store franchise partner programme aimed at attracting young and dynamic entrepreneurs as well as gig economy partners looking for a slightly more stable and long-term opportunity. Essentially, it is a smart e-commerce platform with a supported experience and partner network of stores that allow for both an offline and online experience for potential smart home buyers.

We already have over 10 stores across Asia with an ambition to have at least 15 franchises operational in Malaysia by 2022. Our ultimate goal for this is to make smart home solutions more accessible through our dynamic online purchasing and installation portal with a footprint of trained and experiential franchise partners around the country.