How Eu Yan Sang Came To Be

The story of Eu Yan Sang (SGX: E02) can be traced back to more than 130 years ago.

Eu Yan Sang, in its first incarnation, was started by Eu Kong back in 1879 as a healthcare business to attend to opium-addicted tin miners in Malaysia. He then diversified into tin mining at a later age. Unfortunately, Eu Kong died when his elder son, Eu Tong Sen, was only 13 years old. Eu Tong Sen eventually took over the family businesses at the age of 21.

He expanded the tin mining business and diversified into other areas such as plantations, banking, real estate and trading. In the 1900’s, he expanded Eu Yan Sang’s geographical footprint into other parts of Malaya, Singapore and Hong Kong. It was then when Eu Tong Sen adopted the name “Eu Yan Sang” for the business.

Eu Tong Seng eventually became one of the leading businessmen in Malaya, Singapore and Hong Kong and was wealthy enough to even donate tanks and warplanes to the British army during the First World War.

Succession planning is the key

But even though Eu Tong Sen had an excellent record in building businesses, he wasn’t adept at all in his succession planning. He had divided all his businesses equally amongst his 13 sons as he got older (he had a huge family with 11 wives and 24 children) but that proved to be problematic after his death. As all the sons owned an equal share, it was hard to agree on anything. In the end, the most logical decision was to sell off everything.

Eu Yan Sang’s revival

By the 1970’s, the family had sold off most of what Eu Tong Seng had built, leaving only Eu Yan Sang under their control. In 1989, the current CEO, Richard Eu (a 4th generation family member), joined Eu Yan Sang. Unfortunately, it was a struggling entity at that time and a large stake had been sold off by some 3rd generation family members to Lum Chang Holdings (SGX: L19). Eventually, the Eu family lost control of the Eu Yan Sang business to Lum Chang.

Eu Yan Sang remained outside the family’s control for a number of years before Richard worked together with his cousins, Robert and Clifford Eu, to buy back the company’s shares from Lum Chang.  All three cousins then revamped the business, got it listed on Singapore’s stock exchange in 2000, and aggressively transformed it into what we see today.

Eu Yan Sang is now a leading traditional Chinese medicine group in Asia with more than 300 stores in Hong Kong, Malaysia, China, Singapore and Australia. More importantly, the family controlled-Eu Yan Sang is still charting its growth for the future

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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 Stanley Lim doesn’t own shares in any companies mentioned.