Her family business, Union Energy Group, has grown over the past four decades to become a major provider of liquified petroleum gas, compressed natural gas and diesel in Singapore, but Ellen Teo sees more sustainable forms of energy production playing a significant role in the group’s future. Now at the helm of Union Power, the group’s electricity retail arm, Teo is leading the newly launched Union Solar in its push into green energy generation.
What’s it like refreshing a 43-year-old business and growing its new subsidiary?
The business climate is constantly changing. We adapt to the changing demands to provide value to our customers, and the ability to do so even in the harshest of environments gives not only the business owners but also our people a strong sense of purpose. Getting my team to align to this belief is probably the most rewarding experience that comes with doing business.
What’s your goal at Union Power?
To build this business of sustainability so that there’s a transformation for Union Energy, by adding another service to our portfolio. Union Energy is an old business and it has reached a level of stability where we can only grow sales locally. Riding on the vision of the world and also of Singapore, I think sustainability is something we need to look at seriously.
Our first foray into the electricity business was in 2017. We already had the sustainable model in mind, but first we had to get to know the electricity business well. In 2019, we started planning for Union Solar. Though the pandemic derailed plans for a good six months, we launched the business in late September and started tying up with partners to get their roofs solarised.
How does being an existing provider of LPG, CNG and diesel fit into Union Energy’s role as a new electricity provider?
The group sees synergies between Union Power and its current offerings. We have always strived to provide value to our customers. For instance, food and beverage establishments we supply LPG to also need electricity to run. We are looking at the same customer but [offering] two or more products or services. This ethos of bringing value to our customers has benefited us in many new business activities we created along the way.
How does running Union Power differ from Union Energy?
It’s a totally different ball game. In Union Energy, we are very much in control of the entire vertical of the value chain, and we did well in managing relationships with customers. But Union Power is entirely different: there were so many players when we went into the market, and it was a sea of red. Nobody would want to enter, and yet we did. We tried to differentiate ourselves, because we already had a good portfolio of LPG consumers and users, so that’s our value: we offer another service to the same customer. And with the number of years we’ve had a relationship with them and the trust they have in us, that made us more palatable to them, because they know us.
If the electricity market appeared unprofitable then, why did you go ahead?
We wanted to be an energy company — this was the vision we had crafted years before. In the LPG business [in the late ’90s], there were also many players, so we took years to springboard to a level where we were in control, where some players had retired or slowly merged. However, in the electricity market, it’s different, because you’re up against big players, even government-linked companies. The key is managing our risk, because we don’t have the generation capability. Instead we’re looking at sustainability, through solar energy, as something that will differentiate us from those big players.
Considering the growing interest in and demand for green energy, would Union Energy one day cease offering fossil fuel-based products?
We have identified sustainability as one of the key drivers for our next lap of growth. It would be premature to state that we would abandon fossil fuel-based products. Ultimately, we see ourselves as a leading energy solutions provider that will continue to adapt to provide optimal value to our customers.
One lesson you learnt during 2020 that you’ll apply in 2021?
The key takeaway is planning. We ended 2019 with a plan for 2020, and I’m glad we did that as a team. Although the situation and environment changed, and it was challenging for all of us, we didn’t lose track of our targets. As you grow a core team, everyone needs to be aligned with the vision and path we’re going to take. Although we didn’t manage to get where we wanted, to hit the numbers, I think the team developed a stronger relationship [through the exercise].
A version of this story first appeared in the January/February 2021 issue of A Magazine.