Staying ahead with e-seals development
Najihah S 
Ng says his company is preparing to export new products to India and Europe

Most exporters are concerned about the security of their shipments due to the high value of the goods. As global trade continues to grow, they want to ensure as much as possible their cargoes are not compromised.

As such, there is an increasing demand for seals that offer the latest innovations and technology.

As it is, there is constant innovation in the production of electronic security seals (e-seals), with local players such as Mega Fortris (M) Sdn Bhd and Envotech Sdn Bhd making a name for themselves in innovating e-seals.

Mega Fortris group CEO Adrian Ng says: “We are looking to incorporate RFID [radio frequency identification] into our seals, but there is a lot of different expertise involved.

“[For example,] we will need RFID readers in various configurations to test different reading environments and also RFID encoders to encode information into the RFID chip.”


Input needed from RFID suppliers and chip makers

In addition, the product enhancements also require software developers to truncate and process the collected data into useful information, which is why he says there is a need to work with RFID suppliers and chip manufacturers.

Seen as a loss-prevention product, e-seals were introduced to assist businesses in tracking products or machinery for security reasons. They are essentially electronic devices backed by a security software system, designed to specifically track the date and time when the seal was sent, opened or breached.

Strong R&D focus

That said, the market has its share of challenges. In aiming to be a market leader in e-seals manufacturing, these companies have had to face such issues as the rise of counterfeit products and the increase in raw material prices.

“Rising cost of raw materials does affect our manufacturing and will make us less competitive than other players. We are always finding ways to fight rising manufacturing costs and wages, so that it won’t affect the price of our products,” Ng says.

To aid e-seal makers such as Mega Fortris and Envotech, as well as other players, he believes the government needs to ease foreign manpower regulations and at the same time, provide more incentives to companies involved in exports.

Some of Mega Fortris’ popular seals

Envotech began its R&D in e-seals manufacturing in 2002. Since then, it has created not only the technology to incorporate RFID in e-seals, but also e-seals that work on the global system for mobile communications (GSM)/satellite. The latter is seen as an additional feature, as compared to the existing variations available in the market.

Established in 2006, Envotech is led by a group of professionals with a combined experience of 50 years and has worked on extensive R&D projects, prior to making e-seals its principal business.

With a manufacturing plant in Perak, the company assembles e-seals with its main components imported from Japan, the United States and Taiwan.

Envotech, which has more than five e-seal models in its portfolio, has products that are able to report to a hosted web-based supply chain security and visibility system. This means that various parties including manufacturers, shippers, logistics providers as well as asset owners will be able to actively monitor the security and integrity of the goods as they move through the supply chain.

The company has a total of 72 employees and achieves a seven-figure revenue annually. In addition, as it conforms to international supply chain security standards, all its products are patented.

Over the years, the company has forged partnerships with technology and IP licensing companies and built strategic business operations covering the US, UK, Switzerland, Singapore, China, Korea and the Middle East.


Eye on exports

Mega Fortris is also not resting on its laurels. It is looking to further expand its exports by developing new products.

Ng says: “Right now we are developing RFID-enabled bold seals for the Indian market, RFID mega brick and mega hasp for Europe and seed tracking products for the local market.”

The company, which has been around since 1996, is led by group executive chairman Datuk Nick Ng and his brother Adrian.

Today, it operates in over 200 countries with a team of about 700 people. It has been steadily investing in research and development since 2015, but Ng says he still wants to position the company’s enhanced products in such a way that they are able to compete with other brands in the market.

One of Envotech’s innovative e-seals

As a result of these ongoing efforts, Mega Fortris reported a 19.4% growth in exports to RM9.4 mil last year. Ng has targeted a 22% export sales growth this year amounting to RM11.5 mil.

The company has been enjoying double-digit growth over the years and exports currently make up 94% of its annual revenue, which exceeds RM100 mil. The company is planning to invest more in R&D to create new products for untapped markets.

Mega Fortris began exporting to Indonesia at end-1997 and later expanded to Europe and US.

With the combined production capacity from its two plants – in Malaysia and China – the company’s sales have reached 500 million seals, including e-seals, annually for the past few years.

A brief look into e-seals

At the moment, there are several e-seals in the market such as RFID seals, infrared seals, direct contact seals and GSM (satellite) seals. There are passive and active seals, in which passive seals do not initiate transmissions and only respond when prompted by the device used by a reader.

A passive seal can only be identified within a short range (two to three metres), but does not require battery power as it can be used like a barcode.

Meanwhile, an active seal can initiate transmissions as well as respond to interrogation. It is often battery operated and able to provide longer-range omni-directional communications, sometimes up to 500m.

The reason why the e-seal is vital is the fact that it carries a unique identifying code that can be used to track cargo and it can be permanently affixed to a shipment with an estimated five-year lifespan.

This way, the e-seal eliminates the need to continuously buy, store and distribute seals throughout the supply chain. And since they are battery operated, they are often reusable.

The monitoring system that comes with electronic seals can also lower the cost of insurance premiums on shipments. In addition, it is also helpful for companies to be informed in advance about a possible delay or mishap. This allows shipping personnel to find an alternative solution to make the shipment.

This article first appeared in Focus Malaysia Issue 271.