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5 Things You Should Know About Khong Guan

KhongGuanLogoWhile you may be idly reading this article whilst sipping tea and munching a biscuit, have you ever wondered about the origins of the snack in your hand?

Khong Guan (SGX: K03) is one of Singapore’s biggest biscuit manufacturers – with a history that dates back to 1947.

Chew Choo Keng, a 19-year-old immigrant from the Fujian region of China arrived in Singapore in 1937 with his brother Chew Choo Han. The brothers found work at the Khiam Aik biscuit factory run by industrialist Tan Kah Kee where Choo Keng quickly became supervisor.

However, when an industrial dispute broke out, Choo Keng left the troubles and headed for Malaya, working in his old schoolmate Chan Beng Tee’s uncle’s rubber factory in Ipoh.

Khong Leng biscuits

Chew and Beng Tee decided to set up a biscuit factory with a loan from Beng Tee’s uncle and the Khong Leng Biscuit Company was formed. Choo Han was taken on as Director, Chew’s wife was Assistant Chemist and the 40 employees were all old schoolmates from China.

Japanese Occupation

However, times were about to get harder. During the Japanese occupation Chew struggled to obtain flour for his biscuits and refusing to use a substitute, he dissolved the business. Moving in with his father-in-law, Chew started a business making soap in a factory in Teluk Anson in Perak and was involved in manufacturing coconut oil, charcoal and rubber, as well as trading salt and rice.

Return to Singapore

After the war, Chew and his brother sold their businesses and headed back to Singapore with their families, going back to their old trade of making hand-made biscuits.

Khong Guan

However, things changed when Choo Han spotted some war-damaged biscuit making machines being sold as scrap from the old factory where they had worked. He snapped them up, created a semi-automated biscuit production line and in 1947, the brothers set up the Khong Guan Biscuit Factory on Howard Road.

Their new system improved production, which increased sales and the brothers soon opened another factory in Singapore and one in Malaya.

By 1959, Khong Guan had 200 employees and produced 10,000 tins of biscuits daily in Singapore alone, with Malaya’s 1,000 workers producing 40,000 tins. About 70% of the biscuits were consumed in Singapore and Malaya, the rest exported to Indonesia, Hong Kong and the Middle East.

The company also became involved in vegetable oil manufacture, tin mining and even set up a small shipping firm to handle Khong Guan’s ingredient and biscuit transportation.

In 1960, Khong Guan Milling Private Ltd was incorporated with authorised capital of $5m and was granted pioneer industrial status by the Singapore Government in 1961.

Arnotts

By 1970, Khong Guan’s Singapore factories were producing 15 tons of biscuits daily and continuing to expand. In 1974, the company signed an agreement with Australian biscuit manufacturer Arnotts, giving Khong Guan access to Arnotts’ recipes, production methods and processes – which resulted in the company doubling its biscuit production in South East Asia.

China

In 1989, the company moved its flour milling to Malaysia and China due to unprofitable operating costs. By the 1990s, Khong Guan had factories in the Chinese cities of Shenzhen, Shanghai, Tianjin, Zhengzhou and Chengdu and by 1993 Khong Guan had been named the second most popular biscuit brand in China, with a 5% share of the Chinese biscuit market.

In 1993, the Chew family sold its controlling share of Khong Guan Holdings, Malaysia to businessman Lim Geok Chan.

But did you know…

  1. Mr Chew actually arrived on our shores as Chew Zhu Keng – but changed his name to Chew Choo Keng at the behest of his boss, Tan Kah Kee.
  2. During the war, the Communists regarded Chew as a traitor as he was able to drive his cars freely with a permit from the Japanese military. He was      interrogated in the jungle by a communist who later turned out to be one of his old classmates – and instead of charging him, she solicited a      contribution of $10,000 to the Communist cause as well as soap, salt and oil. Upon release, Chew was then interrogated on the events that took      place in the jungle by the Japanese military.
  3. Chew’s decision to leave Malaya and move back to Singapore was largely due to the Communists revealing its belief that it was Malaya’s intention to fight for its independence from the British.
  4. Chew’s first attempt at automation involved using bicycle chains to convey plates of biscuits into his ovens. However, his brother Choo Han had a talent for mechanical engineering and together they had soon set up a machine shop to design and build their own machines for use in the factory.
  5. Chew Choo Keng was a busy man and not just because of his businesses – he had five wives, 23 children, 34 grandchildren and four great-grandchildren.

Today, Khong Guan’s biscuits are just as popular – indeed, you’d be hard-pressed to find a Singaporean who didn’t grow up munching at least one of the company’s Cream Crackers, Chocolate Wafers or Custard Creams.

Khong Guan Flour Milling Limited still trades in wheat flour and other edible products primarily in Singapore and Malaysia. The company also engages in the wholesale of wheat flour, general goods, biscuits and consumer goods.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Alison Hunt doesn’t own shares in any companies mentioned.