Richard Eu | Eu Yan Sang International Ltd

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Award winners Asia-Pacific Singapore
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 difficulties 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 difficult decades, which saw much of the Eu
family businesses sold off, a revival began under
the stewardship of the fourth generation, led by
current CEO Richard Eu. His inspiration was to
take the company back to where it all started —
traditional Chinese medicine — and to consolidate
everything around this. His success in doing so
provides an inspirational tale of family business
renewal and success.
164 | EY Family Business Yearbook 2016
“Do whatever you can
to build the name
and keep it for your
children and their
children.”
Richard Eu,
Group CEO, EYSIL
EY Family Business Yearbook 2016 | 165
Award winners Asia-Pacific Singapore
One of the best-known retail businesses in Singapore, Hong
Kong and Malaysia is a Chinese traditional medicine group called
Eu Yan Sang. With more than 300 shops and clinics covering
much of Asia and Australia, including 71 in Singapore alone, the
group has established itself as one of the fastest-growing retail
businesses in the region. It is also one of Asia’s most dynamic
family businesses.
some members of the next generation, a few years ago, as they
joined the business. “The name of the company inspires trust,”
he said. “We want to maintain the name of Eu Yan Sang. Do
whatever you can to build the name and keep it for your children
and their children. We are dispensable as individuals, and we
cannot last long. But the name of the company can grow forever.”
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 greatgrandson of the man who started the business.
The group’s core operations include retail outlets, clinics,
manufacturing facilities and a wholesale distribution network —
all focused on traditional Chinese medicine and natural health
and wellness products. Eu Yan Sang’s products include its
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The history of Eu Yan Sang starts with Richard’s greatgrandfather Eu Kong, who left China for Malaya in the 1870s.
Determined to counter the problem of opium addiction, which
afflicted many of the tin miners at the time, Eu Kong set up a
Chinese medical hall in a small town called Gopeng, in the north
of the country. It was named Yan Sang, which literally means
“caring for mankind.”
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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
shops have also evolved to offer postal and remittance services.
next 10 years, his investment banking experience in particular
was to prove important.
Eu Tong Sen’s business empire suffered under the Japanese
occupation of Singapore during the Second World War and,
afterward, under a rigid tax structure set up by the colonial
British authorities.
Over the next five years, Richard developed a new business
strategy. During the next eight years, the various businesses
were consolidated under a common holding company, and a
single family-controlled entity was created. But achieving this
was not easy. “Some family members from the third generation
weren’t too keen on the process,” says Richard. “And it was
only after [completing] management buy-outs and buying
out competing groups [that] we eventually moved to a more
coherent share structure.”
The family business soon encountered another big problem: too
many heirs. Eu Tong Sen had 24 children from 11 wives. But
the one bright spot was the Chinese medicine business, which
remained profitable through the 1960s, 1970s and 1980s.
An old store of the family business.
Eu Yan Sang Retail Store in Raffles City, Singapore.
Consolidation in the late 1980s
famous Bak Foong Pills for women’s health, Bo Ying Compound
for children’s health, dietary supplements, health foods and
beverages, packaged tonic soups and personal care products.
It all adds up to a big business. The Eu Yan Sang group had
revenues of US$257m in its 2015 financial year. And in the last
15 years, the group has achieved an annual growth rate of 11%.
Eu Yan Sang has always had a strong belief in the best practices
of family businesses. This was illustrated by what Richard told
166 | EY Family Business Yearbook 2016
Through his traditional pharmacy, Eu Kong made a fortune
and eventually became a mine owner himself. His son and
heir Eu Tong Sen expanded the tin mining business in Malaya
and ventured into other sectors, including rubber plantations,
banking, remittance and property development. In keeping with
his father’s legacy to take care of workers and the communities
around the family business, Eu Tong Sen opened more shops
with the brand “Eu Yan Sang”, as his business network spanned
Malaya, Singapore, Hong Kong and southern China. Apart from
By the late 1980s, most of his companies had been sold, except
for two: Eu Yan Sang Holdings in Singapore and Eu Yan Sang in
Hong Kong, both of which had grown from the medical shop Eu
Kong had started 100 years earlier. In 1989, at the age of 42,
Richard became the first member of the fourth generation to
join the business. And it was under his guidance that the revival
of Eu Yan Sang began. Before joining, Richard had worked in
banking and computers. And given how events unfolded over the
In 1994, working with other members of the fourth generation,
Richard and his cousin Clifford Eu managed to put together
a leveraged buyout of the old Eu Yan Sang. Two years later,
issues around the Hong Kong business were resolved and unity
was achieved. “All the cousins had to work together to make
this happen,” Richard says. “And having just the one company
brought the whole family together under one unifying factor.”
Richard says that working with just the one company allowed
for the introduction of more professional governance. And
EY Family Business Yearbook 2016 | 167
“The appointment of independent non-executive
directors helped to maintain a focus on business
rather than family needs.”
Award winners Asia-Pacific Singapore
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 fifth generation
working at the business, including Richard’s eldest son Richie.
They and future members of the family will no doubt take their
cue from Richard’s inspirational revival of the group and its
extraordinary Chinese medicine heritage.
Eu Yan Sang operates more than 30 TCM clinics in Singapore, Hong Kong and Malaysia.
One of Eu Yan Sang’s state-of-the-art production plants.
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)
Fourth and fifth
Generation(s):
Founded:
1879 in Gopeng, Malaysia
Industry:
Health care
Employees (2015):
The Eu family.
168 | EY Family Business Yearbook 2016
Revenue (2015):
1,600 (group, full time)
Approx. US$257m
EY Family Business Yearbook 2016 | 169