The Straits Trading Company Limited



The Straits Trading Company Limited (STC) was incorporated as a tin-smelting company on 8 November 1887.1 Its smelter on Pulau Brani was famed for its production of “Straits Tin”, which by the 1900s had become internationally recognised as the purest quality of tin in the world. By 1912, the company was producing two-thirds of Malaya’s tin output.2

History and establishment
In 1885, German businessman Herman Muhlinghaus visited the Malay peninsula and noticed the wasteful and expensive smelting process used by the Chinese. Muhlinghaus recognised that huge profits could be made from a more efficient coal-fired, centralised smelter. He approached Scotsman James Sword from the Singapore merchant house Gilfillan, Wood & Co. to be his business partner in a venture to establish such a smelter in Malaya. In 1886, Sword agreed to enter into a partnership with Muhlinghaus, thus forming Sword & Muhlinghaus.3 That year, Sword & Muhlinghaus established a smelter at Teluk Anson, near the mouth of the Perak River in the Malay peninsula.4 The smelter, however, was unable to efficiently extract tin out of the ore.5

In 1887, Sword and Muhlinghaus began searching for a more suitable smelting site. They eventually decided on an unused dry dock on Pulau Brani, a small offshore island of Singapore, near what is known today as Keppel Harbour. One of the reasons the site was chosen was because of the presence of buildings nearby that could be easily adapted for smelting purposes. A lease on the Pulau Brani property was signed with the Tanjong Pagar Dock Company on 8 July 1887.6

On 8 November 1887, with an initial capital of 150,000 Straits dollars, the Sword & Muhlinghaus partnership was incorporated as a public company called The Straits Trading Company, Limited.7 The newly formed STC was not confined to the business of tin-smelting, but was also involved in activities such as the mining and smelting of “ore, metal and mineral substance of all kinds”, as well as the trade and manufacture of machinery and implements for metallurgical operations.8


Pulau Brani smelter
Construction of the Pulau Brani smelter began as soon as the company was incorporated. However, construction took more than two years to complete and the smelter’s first furnace only began smelting in 1890; by this point the smelter at Teluk Anson had closed. The Pulau Brani smelter expanded quickly: By 1895 it had 12 furnaces operating within its compound, capable of producing 14,000 tons of tin annually. In 1902, the smelter was modernised, replacing its coal-firing furnaces with 15 larger regenerative gas-fired ones.9

Straits Tin
By the 1900s, the Pulau Brani smelter had earned a reputation for producing tin that was internationally recognised as the purest-quality tin in the world. Tin produced by the smelter was shipped and sold on the open market in the form of ingots weighing 100 lbs (approximately 45 kg), each branded with the words “The Straits Trading Co., Ltd”.10 The fame of Straits Tin allowed the STC to secure a licence to purchase ore from Siam (present-day Thailand), as well as to attract companies from Australia, Alaska and South Africa to send their ore to Pulau Brani for smelting.11

The success convinced Sword and Muhlinghaus that it was necessary for the STC to establish another smelter.12 In 1901, the STC established the world’s largest tin smelter at Bagan Luar in the town of Butterworth in Penang, Malaysia (then Malaya).13

Japanese Occupation (1942–1945)
The first half of the 20th century was a difficult period for the STC due to the two world wars, the Great Depression of the 1930s and severe changes in the demand for tin.14 When the Japanese invaded Malaya in 1941, the smelter’s European technicians conducted an “informed demolition” of the smelter on Pulau Brani, probably to ensure that it could not be used by the Japanese. The smelter in Penang was abandoned at the onset of the war and later destroyed by the Japanese.15

When World War II ended, STC chairman John Bagnall came back to Singapore and plans were made to rebuild the company. Upon the return of STC’s staff to Singapore in December 1945, they found that what had remained of the smelter had been heavily abused by the Japanese: It had been used to smelt almost everything but tin. In spite of this, the smelter was back in operation with five furnaces on 2 July 1946.16

Chairmanship of Tan Chin Tuan
Before the war, STC shares were mostly held by British residents and expatriates; however, when the war ended, many British shareholders felt it prudent to dispose of their holdings because of the unstable political and economic environment in Southeast Asia, the colonies’ growing aspirations for independence and the decreasing colonial influence of the British Empire. Ownership of STC shares were subsequently devolved from London-based British shareholders to local Malayan Chinese investors. As a result, Tan Chin Tuan, then managing director of the Oversea-Chinese Banking Corporation (OCBC), eventually became the STC’s major shareholder.17

In 1954, Tan become the first Asian to sit on the company’s board of directors, at the invitation of then STC chairman Ewen M. F. Fergusson.18 On 10 June 1965, Tan was installed as the company’s first Asian chairman, a position he held for 27 years until his retirement in 1992.19 Under his chairmanship, the value of STC shareholders’ funds grew by 1,502 percent. When he retired, Tan was appointed honorary life president of the company in recognition of his significant contributions.20

Closure of Pulau Brani smelter
By 1965, tin-smelting operations on Pulau Brani had been largely discontinued.21 However, the facility continued to be engaged in recovering and treating tin residue, which sold for less than the high-grade tin previously produced.22

In 1971, the Singapore government took over the site of the STC’s Pulau Brani smelter to build a naval base, following the handover of the island from the British military to the Singapore government.23

STC today
Diversification
From its early beginnings as a tin-smelting company, the STC is now a Singapore-based investment company involved in real estate, hospitality, resources and investments in Asia-Pacific.24 The decline of the tin-smelting industry in the late 1980s and early 1990s led the company to diversify into other businesses.25 The STC now owns and manages various hotels, shopping centres and office complexes in the Asia-Pacific region.26

Tecity Group
In January 2008, Tecity Group, an investment company founded by Tan, made a conditional offer to gain a majority in STC’s shares. Prior to making the offer, Tecity, whose chief executive is Tan’s granddaughter, Chew Gek Khim, had been the STC’s second-largest shareholder after OCBC.27 The offer resulted in a bidding war between Tecity and OCBC, with both companies trying to outbid the other for effective control of the company. The bidding war ended in March 2008 when OCBC finally agreed to sell its shares to Tecity, which became the majority STC shareholder.28 In August 2009, Chew was appointed executive chairman of the STC.29

Timeline
1886: Herman Muhlinghaus and James Sword enter into partnership, forming Sword & Muhlinghaus.30
8 Nov 1887: Incorporation of STC.
1890: Smelting plant on Pulau Brani opens.31

Jan 1902: STC’s tin smelter at Butterworth in Penang, Malaysia – one of the largest in the world – begins operations.32
1941: Pulau Brani smelter undergoes planned demolition in anticipation of the Japanese invasion of Singapore.33
Dec 1945: STC workers return to Singapore.
Jul 1946: Pulau Brani smelter resumes operations.34
1954: Tan Chin Tuan becomes the first Asian on STC’s board of directors.35
1965: Tan becomes the first Asian chairman of STC.36
1971: Site of Pulau Brani smelter taken over by the government after the British military hands over the island to the Singapore government.37
1990s: STC begins diversification of its businesses.38
May 1992: Tan Chin Tuan retires and is appointed STC’s honorary life president.39
Mar 2008: Tecity Group, led by Chew Gek Khim, takes control of STC as majority shareholder.40
August 2009: Chew is appointed STC’s executive chairman.41



Author

Fairoz Shariff



References
1. The Straits Trading Company Limited. Corporate profile. Retrieved from Straits Trading website: http://www.stc.com.sg/abt_profile.html
2. The Straits Trading Company Limited. (2013). The Straits Trading Company Limited: 125 & beyond. Singapore: The Straits Trading Company Limited, p. 20. (Call no.: RSING 338.76095957 STR)
3. Tregonning, K. C. (1963, May). Straits Tin: A brief account of the first seventy-five years of The Straits Trading Company, Limited. Journal of the Malayan Branch of the Royal Asiatic Society, 36(1)(201), 86–88. Retrieved from JSTOR via NLB’s eResources website: http://eresources.nlb.gov.sg/ 
4. Tregonning, K. C. (1963, May). Straits Tin: A brief account of the first seventy-five years of The Straits Trading Company, Limited. Journal of the Malayan Branch of the Royal Asiatic Society, 36(1)(201), 88. Retrieved from JSTOR via NLB’s eResources website: http://eresources.nlb.gov.sg/; Makepeace, W., Brooke, G. E., & Braddell, R. S. J. (1991). One hundred years of Singapore (Vol. 2). Singapore: Oxford University Press, p. 219. (Call no.: RSING 959.57 ONE-[HIS])
5. Makepeace, W., Brooke, G. E., & Braddell, R. S. J. (1991). One hundred years of Singapore (Vol. 2). Singapore: Oxford University Press, p. 219. (Call no.: RSING 959.57 ONE-[HIS])
6. Tregonning, K. C. (1963, May). Straits Tin: A brief account of the first seventy-five years of The Straits Trading Company, Limited. Journal of the Malayan Branch of the Royal Asiatic Society, 36(1)(201), 91. Retrieved from JSTOR via NLB’s eResources website: http://eresources.nlb.gov.sg/
7. Straits Trading Company Limited. (n.d.). Corporate profile. Retrieved from Straits Trading website: http://www.stc.com.sg/abt_profile.html
8. Tregonning, K. C. (1963, May). Straits Tin: A brief account of the first seventy-five years of The Straits Trading Company, Limited. Journal of the Malayan Branch of the Royal Asiatic Society, 36(1)(201), 92. Retrieved from JSTOR via NLB’s eResources website: http://eresources.nlb.gov.sg/
9. Tregonning, K. C. (1963, May). Straits Tin: A brief account of the first seventy-five years of The Straits Trading Company, Limited. Journal of the Malayan Branch of the Royal Asiatic Society, 36(1)(201), 93–95, 101. Retrieved from JSTOR via NLB’s eResources website: http://eresources.nlb.gov.sg/
10. The Straits Trading Company Limited. (2013). The Straits Trading Company Limited: 125 & beyond. Singapore: The Straits Trading Company Limited, p. 20. (Call no.: RSING 338.76095957 STR); Finest tin in the world. (1935, October 8). The Singapore Free Press and Mercantile Advertiser (1884–1942), p. 6. Retrieved from NewspaperSG.
11. Tregonning, K. C. (1963, May). Straits Tin: A brief account of the first seventy-five years of The Straits Trading Company, Limited. Journal of the Malayan Branch of the Royal Asiatic Society, 36(1)(201), 99. Retrieved from JSTOR via NLB’s eResources website: http://eresources.nlb.gov.sg/
12. Tregonning, K. C. (1963, May). Straits Tin: A brief account of the first seventy-five years of The Straits Trading Company, Limited. Journal of the Malayan Branch of the Royal Asiatic Society, 36(1)(201), 100. Retrieved from JSTOR via NLB’s eResources website: http://eresources.nlb.gov.sg/
13. The Straits Trading Company Limited. (2013). The Straits Trading Company Limited: 125 & beyond. Singapore: The Straits Trading Company Limited, p. 18. (Call no.: RSING 338.76095957 STR)
14. The Straits Trading Company Limited. (2013). The Straits Trading Company Limited: 125 & beyond. Singapore: The Straits Trading Company Limited, p. 24. (Call no.: RSING 338.76095957 STR)
15. Tregonning, K. C. (1963, May). Straits Tin: A brief account of the first seventy-five years of The Straits Trading Company, Limited. Journal of the Malayan Branch of the Royal Asiatic Society, 36(1)(201), 127. Retrieved from JSTOR via NLB’s eResources website: http://eresources.nlb.gov.sg/
16. The Straits Trading Company Limited. (2013). The Straits Trading Company Limited: 125 & beyond. Singapore: The Straits Trading Company Limited, pp. 25–26. (Call no.: RSING 338.76095957 STR)
17. The Straits Trading Company Limited. (2013). The Straits Trading Company Limited: 125 & beyond. Singapore: The Straits Trading Company Limited, p. 28. (Call no.: RSING 338.76095957 STR)
18. Macbeth, M. (2003). Quiet achiever: The life and times of Tan Sri Dr Tan Chin Tuan. Singapore: Times Editions, p. 165. (Call no.: RSING 332.12092 MAC)
19. The Straits Trading Company Limited. (2013). The Straits Trading Company Limited: 125 & beyond. Singapore: The Straits Trading Company Limited, p. 29. (Call no.: RSING 338.76095957 STR); Quak, H. W. (1992, May 12). Tan Chin Tuan to retire as chairman of Straits Trading. The Business Times, p. 4. Retrieved from NewspaperSG.
20. Macbeth, Mike. (2003). Quiet achiever: The life and times of Tan Sri Dr Tan Chin Tuan. Singapore: Times Editions, p. 205. (Call no.: RSING 332.12092 MAC); Quak H. W. (1992, May 12). Tan Chin Tuan to retire as chairman of Straits Trading. The Business Times, p. 4. Retrieved from NewspaperSG.
21. The Straits Trading Company Limited. (2013). The Straits Trading Company Limited: 125 & beyond. Singapore: The Straits Trading Company Limited, p. 16. (Call no.: RSING 338.76095957 STR)
22. Stable price vital to tin industry. (1967, May 18). The Straits Times, p. 7; Boland, G. (1967, September 3). Indons to revive Pulau Brani smelter? The Straits Times, p. 3. Retrieved from NewspaperSG.
23. The Straits Trading Company Limited. (2013). The Straits Trading Company Limited: 125 & beyond. Singapore: The Straits Trading Company Limited, p. 16. (Call no.: RSING 338.76095957 STR); Singapore navy likely to take over Pulau Brani. (1971, January 25). The Straits Times, p. 7. Retrieved from NewspaperSG.
24. Straits Trading Company Limited. (n.d.). Corporate profile. Retrieved from Straits Trading website: http://www.stc.com.sg/abt_profile.html
25. Poh, F., & Teo, D. (1998, June 5). Good management key to longevity, say S’pore firms. The Straits Times, p. 79. Retrieved from NewspaperSG.
26. Soh, T. K. (1999, October 18). Straits Trading: From tin to hotels and advertising. The Business Times, p. 4; Wong, W. K. (2012, December 3). Transformation of STC under way. The Business Times. Retrieved from Factiva via NLB’s eResources website: http://eresources.nlb.gov.sg/
27. Chan, D. (2008, January 7). Investment firm makes offer for Straits Trading. The Straits Times, p. 42. Retrieved from NewspaperSG.
28. Chan, F. (2008, March 5). OCBC accepts offer for Straits Trading. The Straits Times, p. 64. Retrieved from NewspaperSG.
29. New exec chairman for Straits Trading. (2009, August 17). The Straits Times, p. 40. Retrieved from NewspaperSG.
30. Tregonning, K. C. (1963, May). Straits Tin: A brief account of the first seventy-five years of The Straits Trading Company, Limited. Journal of the Malayan Branch of the Royal Asiatic Society, 36(1)(201), 86–88. Retrieved from JSTOR via NLB’s eResources website: http://eresources.nlb.gov.sg/
31. Soh, T. K. (1999, October 18). Straits Trading: From tin to hotels and advertising. The Business Times, p. 4. Retrieved from NewspaperSG.
32. Tregonning, K. C. (1963, May). Straits Tin: A brief account of the first seventy-five years of The Straits Trading Company, Limited. Journal of the Malayan Branch of the Royal Asiatic Society, 36(1)(201), 100, 150, 152. Retrieved from JSTOR via NLB’s eResources website: http://eresources.nlb.gov.sg/
33. Tregonning, K. C. (1963, May). Straits Tin: A brief account of the first seventy-five years of The Straits Trading Company, Limited. Journal of the Malayan Branch of the Royal Asiatic Society, 36(1)(201), 127. Retrieved from JSTOR via NLB’s eResources website: http://eresources.nlb.gov.sg/
34. The Straits Trading Company Limited. (2013). The Straits Trading Company Limited: 125 & beyond. Singapore: The Straits Trading Company Limited, pp. 25–26. (Call no.: RSING 338.76095957 STR)
35. Macbeth, M. (2003). Quiet achiever: The life and times of Tan Sri Dr Tan Chin Tuan. Singapore: Times Editions, p. 165. (Call no.: RSING 332.12092 MAC)
36. The Straits Trading Company Limited. (2013). The Straits Trading Company Limited: 125 & beyond. Singapore: The Straits Trading Company Limited, p. 29. (Call no.: RSING 338.76095957 STR)
37. Singapore navy likely to take over Pulau Brani. (1971, January 25). The Straits Times, p. 7. Retrieved from NewspaperSG.
38. Poh, F., & Teo, D. (1998, June 5). Good management key to longevity, say S’pore firms. The Straits Times, p. 79. Retrieved from NewspaperSG.
39. Quak H. W. (1992, May 12). Tan Chin Tuan to retire as chairman of Straits Trading. The Business Times, p. 4. Retrieved from NewspaperSG.
40. Chan, F. (2008, March 5). OCBC accepts offer for Straits Trading. The Straits Times, p. 64. Retrieved from NewspaperSG.
41. New exec chairman for Straits Trading. (2009, August 17). The Straits Times, p. 40. Retrieved from NewspaperSG.



Further resources
Chan, D. (2014, September 6). Straits Trading to sell flagship building. The Straits Times, p. 14. Retrieved from NewspaperSG.


Lim, S. B. (1992, May 24). A conservative who beat the tide. The Straits Times, p. 24. Retrieved from NewspaperSG.

Straits Traders closely linked to tin’s ups and downs. (1971, October 30). New Nation, p. 13. Retrieved from NewspaperSG.

Straits Trading diversifies into property and hospitality services. (2011, December 12). Channel NewsAsia. Retrieved from Factiva via NLB’s eResources website: http://eresources.nlb.gov.sg/ 

Wong, W. K. (2011, September 11). Architect of change. The Business Times. Retrieved from Factiva via NLB’s eResources website: http://eresources.nlb.gov.sg/


The information in this article is valid as at 31 August 2015 and correct as far as we can ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.

 

Subject
Tin industry--Malaysia--Malaya
Tin industry--Singapore
Trading companies--Malaysia--Malaya
Trading companies--Singapore
Business, finance and industry>>Business organization>>Business enterprises
Organisations
Commerce and Industry>>Trade
The Straits Trading Company Limited
Trade and industry
Economy