Robert Kuok has been known for many decades as Malaysia’s richest man. He got his start in sugar trading, and expanded his empire through joint ventures with many other businesspeople. This is another story of a joint venture — the story of how the Kuok Group got into shipping.
In 1967, Kuok heard rumours that the Blue Funnel Group was coming to set up the national shipping line of Malaysia. Blue Funnel was likely the largest shipping conglomerate based out of the United Kingdom at the time. It owned multiple shipping lines: Blue Funnel, Glen Line, the Straits Steamship Co in Singapore, amongst others. It was going to be a formidable bid from a serious competitor.
Kuok was immediately interested in submitting a competitive bid. In his memoirs, published decades later, Kuok writes:
My interest was partly patriotism — a desire to help Malaysia to launch its own independent shipping line and not be tied to the apron strings of the ex-colonial government of Britain through Blue Funnel.
But of course, as with everything Kuok did, there was some sound financial reasoning for the move:
I had become interested in shipping from about 1964, due to our large-scale buying of sugar for our refinery, wheat for our flourmill and our international commodities-trading activities. For example, we bought free-on-board sugar from India and delivered it to the Government of Indonesia on a cost-and-freight basis (sellers only wanted to sell on the basis of delivery at their own ports; buyers wanted the sugar delivered to their ports. Thus, covering the span of the ocean was my risk). In those days, shipping was quite volatile and freight rates could sometimes shoot up 25-30 percent. Since margins on sugar trading were small, you could easily make money on your trade, but lose on the freight.
There was one major problem with submitting a bid, however: Kuok knew nothing about shipping. And so, as was his practice over the course of his career, he sought a more experienced partner.
A few years earlier, Kuok had been introduced to a man named Frank WK Tsao in Hong Kong, the Chairman of International Marine Carriers (IMC). Tsao was a shipping man, and had turned a single, coal-burning steamship — bought from a Singaporean businessman in 194 ...
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