Kian-Gwan Kongsi

Founded in 1863 by the self-made businessman Oei Tjie Sien, Kian Gwan began life as a small trading concern in Semarang, capital of Central Java, then in the Dutch East Indies. Oei's son and heir, the tycoon Oei Tiong Ham, took over the management of the company in 1893, and promptly incorporated it as Handel Maatschappij Kian Gwan.

Oei's strategy was gradually to build up dominance in the highly lucrative opium market towards the end of the nineteenth century. This feat was all the more remarkable given the virtual control of the opium monopoly by more established, older concerns with close ties to the 'Cabang Atas', or the old Chinese upper class of colonial Indonesia. The bankruptcy of one of the older concerns in 1889 prompted the colonial government to host an auction to select new opium farmers.

This auction has gone down as one of the most competitive in history, described by the poet Boen Sing Hoo in his Boekoe Sair Binatang ("On Animals", published in 1895) as a real "peperangan diantara raja-raja" ("battle of kings"). It gave the young Oei and Kian Gwan an opportunity to establish themselves as a significant player. Boen's poem describes how the parvenu Oei, whom he calls Anak Sapi (the "Young Ox"), outbid the established Batavia partnership led by Kapitein Loa Tiang Hoei (Boen's Boeaja Emas or "Gold Crocodile") and Kapitein Oey Hok Tjiang.

Having gained control over the opium market of central Java, Kian Gwan went on to corner the sugar market. The company gradually integrated its plantations, mills, shipping lines, banks and complementary enterprises. A fleet of merchant ships was registered in Singapore (as Heap Eng Moh Steamship Co.). One of the employees in Singapore was Lee Hoon Leong, grandfather of the first Prime Minister of Singapore Lee Kuan Yew. This fully integrated chain, as James R. Rush points out, differed from the earlier opium empires and older Chinese concerns, for Oei's main competitors were not other Chinese, but the large European trading companies. Oei's company was also groundbreaking in employing professional personnel, instead of relying completely on family members in the old Chinese way. Only ownership of Kian Gwan rested with the family.