SHAH ALAM: Berkshire Hathaway Inc, the multinational conglomerate operated by legendary investor and philanthropist Warren Buffett, now has a presence in Malaysia.

In June, the company completed the acquisition of Southwest Greens International through its carpet manufacturing company Shaw Industries Group Inc.

Southwest Greens is reputedly the only company in Malaysia to offer artificial turf for putting greens in homes through its local partners. It is now looking at expanding into other areas.

“Southwest Greens, with the different selling channels we have, also has athletic fields, which is what we’re really looking to focus on here in the future. It hasn’t taken hold here in Malaysia as much as it has in Singapore,” said Kyle Ehrman, president of Southwest Greens International.

“People ask ‘Why has it taken you so long to get to Asia?’ And I say, ‘Well, all we would have done is play golf. We couldn’t talk business because we weren’t competitive’.  Now we are at a point where we can leverage on Shaw’s mass infrastructure in creating carpets. They do enough carpets in one year to go around the equator four times,” Ehrman told The Edge Financial Daily in an interview.

Founded in Arizona in 1996, Southwest Greens International is considered the global leader in designing and installing synthetic turf for residential and commercial use. Following the acquisition by Shaw Industries, its corporate headquarters has move to Kennesaw, in Georgia in the US.

Shaw Industries, meanwhile, is a flooring company with more than US$4 billion (RM12.44 billion) in annual sales and 25,000 employees. The world’s largest carpet manufacturer, it began operations in 1946 and was acquired by Berkshire Hathaway in 2001.    

Besides Malaysia and Singapore, Southwest has opened offices in Thailand, Indonesia and South Korea. Nadin Ibrahim is the CEO of Southwest Greens Malaysia and Singapore.

Even though putting greens, which use the Jack Nicklaus design, are essentially in Southwest Greens’ DNA, as Ehrman described it, the company is focusing on creating a name for itself in producing larger areas of synthetic turf as it sees a potential in this area in the local market.

“There is just so much square footage of putting greens that we can build. But when we talk about the growth of lawn and athletic fields, we talk about the square footage and it is far bigger than a putting green can offer,” said Nadin. He said his group has over 80% share in the overall putting green installation market in Malaysia, which includes natural putting greens.

Synthetic fields have already taken hold in Singapore, where Nadin said about 85% of school fields in the republic have artificial turf.

He said this would be the way of the future for Malaysia, especially as an allocation was given for the upgrade of school facilities in Budget 2012. The company is now in preliminary talks to initiate a project with longer term targets.

“We’re looking at the long-term part of the business — the schools and the state — instead of one-off projects. It’s a long-term business,” said Nadin.

There are various textures of synthetic turf for different usages. Athletic fields produced by Southwest, according to Ehrman, are made from yarn fibre which reduces abrasions on the body during falls. For non-feet contact, nylon fibre is used, which is more durable and stronger, albeit less aesthetically pleasing. For golfing, polyethylene yarn is used for infields, while polypropylene fibre is used for putting greens.

Other than the reduced impact on the body during games, artificial fields also offer better drainage and are available for use during most weather conditions. Resting time for the synthetic field is practically none compared with natural grass, allowing increased usage of the fields. Maintenance, such as cutting grass and treating with chemicals like fertilisers or pesticides, is not necessary.

“One drawback is the big-ticket expense in the beginning, but if you break it down to what it takes to maintain and to take care of a proper green field, usually within three to four years you have your money back,” said Ehrman.

While the company is the only synthetic putting green provider in Malaysia, according to Nadin, its market share in terms of synthetic turf for athletic fields is very low as it is still a new player in the industry. China is Southwest Greens’ biggest competitor thanks to its low prices.

Even though the various types of turf used by Southwest Greens for artificial fields and putting greens are all made in the US to ensure quality, Ehrman said his company is able to leverage Shaw’s operations to cut costs.

“Shaw is able to control the cost in what I would call the value chain to get it to the end consumer. Shaw has internal logistics that facilitate containers to transport the carpet,” he said.

Even though China offers a very competitive market, he said Southwest Greens’ affiliation with a Berkshire Hathaway company and the long-standing history of Shaw in the carpet manufacturing industry give many the comfort level to believe in its products.

“We’re able to take those efficiencies and put them into a new and growing business that allows us to be competitive,” Ehrman said. “Why Asia? Why now? Because now we’re competitive. We have a great product, we have a great representative over here. We’re ready. It’s time to really grow the business.”

This article appeared in The Edge Financial Daily, November 8, 2011.