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Richard Eu Eu Yan Sang International Ltd. (EYSIL)

Before they became the businesses we know so well today, many famous companies had to go through serious diffculties and major transformations. One business that had to go through many struggles before achieving its current global success is traditional Chinese medicine group Eu Yan Sang. After a number of diffcult decades, which saw much of the Eu “Do whatever you can family businesses sold off, a revival began under the stewardship of the fourth generation, led by to build the name current CEO Richard Eu. His inspiration was to and keep it for your take the company back to where it all started — children and their traditional Chinese medicine — and to consolidate children.” everything around this. His success in doing so provides an inspirational tale of family business Richard Eu, renewal and success. Group CEO, EYSIL

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One of the best-known retail businesses in Singapore, Hong some members of the next generation, a few years ago, as they Kong and Malaysia is a Chinese traditional medicine group called joined the business. “The name of the company inspires trust,” Eu Yan Sang. With more than 300 shops and clinics covering he said. “We want to maintain the name of Eu Yan Sang. Do much of Asia and Australia, including 71 in Singapore alone, the whatever you can to build the name and keep it for your children group has established itself as one of the fastest-growing retail and their children. We are dispensable as individuals, and we businesses in the region. It is also one of Asia’s most dynamic cannot last long. But the name of the company can grow forever.” family businesses. Belief in the best practices of family businesses Now managed by the fourth generation, Eu Yan Sang’s roots go back to the 1870s. Current CEO Richard Eu is the great- The history of Eu Yan Sang starts with Richard’s great- grandson of the man who started the business. grandfather Eu Kong, who left China for Malaya in the 1870s. Determined to counter the problem of opium addiction, which The group’s core operations include retail outlets, clinics, afficted many of the tin miners at the time, Eu Kong set up a manufacturing facilities and a wholesale distribution network — Chinese medical hall in a small town called Gopeng, in the north all focused on traditional Chinese medicine and natural health of the country. It was named Yan Sang, which literally means and wellness products. Eu Yan Sang’s products include its “caring for mankind.” With more than 1,000 different types of Chinese herbs in a retail store, Eu Yan Sang is one of the best-stocked retailers of Traditional Chinese Medicine (TCM).

offering Chinese medicine and health products, Eu Yan Sang next 10 years, his investment banking experience in particular xx xx xx shops have also evolved to offer postal and remittance services. was to prove important.

Eu Tong Sen’s business empire suffered under the Japanese Over the next fve years, Richard developed a new business occupation of Singapore during the Second World War and, strategy. During the next eight years, the various businesses afterward, under a rigid tax structure set up by the colonial were consolidated under a common holding company, and a British authorities. single family-controlled entity was created. But achieving this was not easy. “Some family members from the third generation The family business soon encountered another big problem: too weren’t too keen on the process,” says Richard. “And it was many heirs. Eu Tong Sen had 24 children from 11 wives. But only after [completing] management buy-outs and buying the one bright spot was the Chinese medicine business, which out competing groups [that] we eventually moved to a more remained proftable through the 1960s, 1970s and 1980s. coherent share structure.” An old store of the family business. Eu Yan Sang Retail Store in Raffes City, Singapore. Consolidation in the late 1980s In 1994, working with other members of the fourth generation, famous Bak Foong Pills for women’s health, Bo Ying Compound Through his traditional pharmacy, Eu Kong made a fortune Richard and his cousin Clifford Eu managed to put together for children’s health, dietary supplements, health foods and and eventually became a mine owner himself. His son and By the late 1980s, most of his companies had been sold, except a leveraged buyout of the old Eu Yan Sang. Two years later, beverages, packaged tonic soups and personal care products. heir Eu Tong Sen expanded the tin mining business in Malaya for two: Eu Yan Sang Holdings in Singapore and Eu Yan Sang in issues around the business were resolved and unity It all adds up to a big business. The Eu Yan Sang group had and ventured into other sectors, including rubber plantations, Hong Kong, both of which had grown from the medical shop Eu was achieved. “All the cousins had to work together to make revenues of US$257m in its 2015 fnancial year. And in the last banking, remittance and property development. In keeping with Kong had started 100 years earlier. In 1989, at the age of 42, this happen,” Richard says. “And having just the one company 15 years, the group has achieved an annual growth rate of 11%. his father’s legacy to take care of workers and the communities Richard became the frst member of the fourth generation to brought the whole family together under one unifying factor.” around the family business, Eu Tong Sen opened more shops join the business. And it was under his guidance that the revival Eu Yan Sang has always had a strong belief in the best practices with the brand “Eu Yan Sang”, as his business network spanned of Eu Yan Sang began. Before joining, Richard had worked in Richard says that working with just the one company allowed of family businesses. This was illustrated by what Richard told Malaya, Singapore, Hong Kong and southern China. Apart from banking and computers. And given how events unfolded over the for the introduction of more professional governance. And

166 | EY Family Business Yearbook 2016 EY Family Business Yearbook 2016 | 167 Award winners Asia-Pacifc Singapore “The appointment of independent non-executive directors helped to maintain a focus on business rather than family needs.” Richard Eu

he explains that it was as part of these efforts to improve governance that, at the beginning of the new millennium, EYSIL was listed on the Singapore Stock Exchange. “The appointment of independent non-executive directors helped to maintain a focus on business rather than family needs,” he says. “We had to separate ownership issues and management to be effective.”

According to Richard, family disputes relating to the business are now rare. But he adds that, due to being a publicly listed company, efforts always have to be made to ensure that this remains the case.

Currently, there are two members of the ffth generation working at the business, including Richard’s eldest son Richie. They and future members of the family will no doubt take their One of Eu Yan Sang’s state-of-the-art production plants. Eu Yan Sang operates more than 30 TCM clinics in Singapore, Hong Kong and Malaysia. cue from Richard’s inspirational revival of the group and its extraordinary Chinese medicine heritage.

Eu Yan Sang is committed to providing products of the highest possible quality.

Richard Eu Group CEO

Company name: Eu Yan Sang International Ltd. (EYSIL)

Generation(s): Fourth and ffth

Founded: 1879 in Gopeng, Malaysia

Industry: Health care

Employees (2015): 1,600 (group, full time)

Revenue (2015): Approx. US$257m The Eu family.

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