Heritage

Trade has been a prominent feature of Oei Tiong Ham (OTH), a Chinese born Indonesian tycoon. His family came from China and his father, a Chinese -born migrant, Oei Tjie Sien (OTS) saw trading opportunities which lured the Dutch to the Eastern hemisphere as well. OTS established a trading house, KIAN GWAN in 1863. The foresight has driven the KIAN GWAN for more than 90 years to be the largest trading company in the world.

Seeing private entrepreneurial activity was initially brokering between different segments of colonial’s society during the Dutch era. OTS saw that the Chinese played important role in the economic sphere, acting as a broker between the Javanese peasant, the colonial sector, and the world market. OTS created a multinational trading company, KIAN GWAN. Its orientation toward business as well their access to intra-and extra -archipelago trade networks was vital after the post war boom of 1918-1920, the worldwide demand for sugar in Java was high then. His son, Oei Tiong Ham (OTH) significance relates to his role in expanding his father’s trading house and changed KIAN GWAN into Oei Tiong Ham Concern (OTHC) in 1893 to become the largest conglomerate in Southeast Asia at the beginning of the twentieth century. He was the first conglomerate of the twentieth century at the Far East to originate his involvement in sugar industry and largely his wealth came from sugar.

OTH took over the company from his father, he was focused on rubber, kapok, gambir, tapioca and coffee. He diversified business portfolio into one of the largest firms in Southeast Asia.

OTH’s initial strategy was gradually to build up dominance in the highly lucrative opium market, its exports included agricultural and forestry products towards the end of the nineteenth century He relied on contract with collateral for loans he extended. During the 1880, there was a sugar crisis and he acquired five sugar factories. Sugar now became the backbone of the company and would remain so for the next generations.

OTHC gradually integrated its plantations, mills, shipping lines, banks, and complementary enterprises. OTHC was also groundbreaking in employing professional personnel, instead of relying completely on family members in the old Chinese way. OTH helped create a company culture where new ideas had a chance to grow and flourish. Only ownership of OTHC rested with the family.

The OTHC grew and diversified rapidly in the period around 1920’s. It started branches in London, Amsterdam, Singapore, Bangkok, and New York, created a bank, a steamship business and had a large wholesale business. Of all the ethnic Chinese business conglomerates in pre-war Asia, the OTHC was by far the largest. The company was even larger than the well-known “Big Five” Dutch trading companies that supposedly dominated the foreign trade of the Indies. The OTHC was strong in foreign trade, particularly in China. The basic strategy of the company was to take advantage of the opportunities on the world market for commodities produced in Indonesia.

During the post-war boom of 1918-1920, OTH ingenuity and determination set OTHC followed a cautious policy during these boom years. He did not speculate too heavily and took steps to improve its financial administration. OTH recruited talented accountants to set up a modern accounting system for the sugar factories. Due to the cautious and independent strategy, the company survived the subsequent sugar crisis while many other Chinese firms perished.