Hainanese are not always disunited

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Translation:

Lianshang: Business Cooperation within Hainanese Coffee Industry in the Early Days

Hainanese has been long considered a group which lacks cohesion and is unable to unite. In fact, this conclusion is not quite right as since 64 years ago, the Hainanese already knew how to combine strength and put into practice business collaboration.

In the business world, making large purchases is the mode of operation to achieve cost savings. Hainanese coffee shop owners at that time already knew of unified procurement. And in order to achieve the objective of cost control, they even manufactured the raw materials needed by their own coffee shops.

Lianshang Limited Corporation was established for this purpose six months prior to the surrender of the Japanese and it existed for a long 57 years.

The Establishment of a Condensed Milk Company to Break Through Price Manipulation

During the Japanese occupation in Singapore, foreign supply of condensed milk ceased. Ordinary coffee shops were using local made condensed milk but the price of which was often raised and there were problems relating to the disruption of supply. Hainanese came to the South from China to look for a new life mainly by opening coffee shops and this had been a social trend since around the Second World War. Their coffee shop business was nagged by the price fluctuation of the raw materials.

At the Hainanese Coffee Association (formerly known as the Hainanese Coffee Restaurant & Bar Merchant Association) members' dinner gathering held in March 1945, Chew Seng Soon suggested preparing own utensils to form a small scale condensed milk manufacturing company. On one hand, it would enable them to be self-sufficient and self-contained; on the other hand, it could facilitate other counterparts in the industry while avoiding the price manipulation by other condensed milk businessmen. At the time, all attendees were in favour of this proposal, some suggested for Hainanese Coffee Association to be the main force, and to form a condensed milk manufacturing company according to Chew Seng Soon's recommendations.

However, there was also this other saying that Chew Seng Soon's condensed milk manufacturing company had in fact already been organised and was ready, the attendees urged him to expand his company and allow others in the industry the opportunity to join. As this was a company affair which could not be decided by him alone, he did not accept the suggestion hastily. At that time, all attendees came to an agreement to allow those present to join by subscribing the shares. The total shares subscribed by 49 people amounted to 98,000 Japanese Military Bills, and 98 shares were allocated at 1000 (Japanese Military Bills) per share.

In early April of the same year, all the stakeholders held a meeting to decide on the company name, names suggested include Datong, Huichang, Jicheng, Lianshang, Heyi, Mingsheng, etc. The attendees each held fast to their own view and could not come to a decision. Eventually the decision was left to a fellow villager Feng Heqing to make. "Lianshang" was used as the company name initially and matters relating to the company's registration were being handled. The Hainanese Coffee Association was temporary used as the company address of the condensed milk manufacturing company.

The number of subscribers increased subsequently and the capital had also increased to 400,000 Japanese Military Bills. The company commenced business on 1 May 1945 after a month of preparations. With the shareholders and directors making concerted efforts, the staff did not draw any salary in the beginning, except for 200 to 300 banana notes as allowance. However the initial business was unsatisfactory; the quality of condensed milk was not good and the price was relatively high. Bus as the counterparts in the coffee industry were happy to purchase, the existing stock was thus kept low and the business was able to go on.

Lianshang's business gradually went onto the right track a month later and the number of employees increased to 10. However, in the face of the increase in price of raw materials such as milk, charcoal, sugar, etc., the profit was meager, and the future appeared bleak to the shareholders. On 10 July of the same year, it was resolved during the fourth meeting of the director and staff to expand the business operations to enter into the wholesale business of sugar, coffee beans, tea powder, biscuits, etc. However as there were insufficient funds, the registrants were called upon immediately to raise additional 200,000 Japanese Military Bills, which increased to 330,000 unexpectedly within 10 days, resulting in the increased of the company capital to 730,000 Japanese Military Bills.

Business Grew to a New Height after the War

The Japanese surrendered on 15 August 1945 and Singapore was lifted out of three years and eight months' of misery. Following which the Government declared the Japanese banana notes invalid and Lianshang's business came to a standstill. The sixth meeting of the directors was held on 15 September, and it was resolved to recalculate the stocks and company assets in Straits dollar. The result was a mere 6,079 Straits dollars which made it impossible for the business to be carried on.

Lianshang held its first post war Shareholder Meeting on 10 October to raise share capital in Straits dollar; each share were fixed at 50 Straits dollar, while the old shares (banana notes) were converted at the rate of 1000 (Japanese Military Bills) to 35 Straits dollars. Those with less than one share were to approach the shareholders to top it up to 50 Straits dollars per share. The old-new shares conversion and the making of the capital brought about a total of 44,000 Straits dollars. Following the amendment of the Articles and the election of new director subsequently in 1947, Lianshang's business grew to a new height.

However the market had changed after the war. With Australian goods coming in to Singapore, the market was flooded with condensed milk and milk products which the residents rushed to purchase. Local condensed milk manufacturing business was greatly affected. Lianshang's condensed milk department ceased production on 2 October and went into selling of sundry goods. Nevertheless, the market change did not affect Lianshang's development which gradually entered a pleasant stage in its second year of operations, making a net profit of 50,000 Straits dollars and more within 10 months.

Walking into History Officially in 2002

Lianshang's subsequent development was not a bed of roses; however its revenue and profit continued to be stable. One of the reasons was that Lianshang was the sales agent for a cigarette importer from the 80s to the 90s; profit from the sale of cigarettes was very high. However the cigarette importer regained the authority of agency later on and gone was the money making business. In addition to the existing fierce market competition then, the number of suppliers also increased while the number of members dropped. Lianshang's business started to go downhill.

In year 2000, Lianshang put up a newspaper advertisement to look for company shareholders, their families and descendants, notifying them that the company was about to cease operation and the capital was to be returned to them based on the capital shares apportionment, and the accumulated interest and dividends made over the years to be distributed.

By year 2001, the exact number of Lianshang shareholders was ascertained to be 190. As many of the shareholders had changed their address and returned to Hainan and many of the descendants had no idea if their father or grandfather ever invested in Lianshang, there remained 55 people who eventually did not take back their share capital, interests and dividends totaling $170,000.

Lianshang officially ceased business and became a history during the economic downturn in 2003. After the audit by the accounting firm, any balance amount left unclaimed was handed over to the care of the Government's Charity Trust.

Lianshang's organisational operations witnessed the cooperation and experiences of the Hainanese coffee shop business. This is also an important record in the history of the Singapore Chinese business.