The Sugar King: Robert Kuok's Century, Part I

Wind history back to the Malay Peninsula at mid-century — colonial empire in its twilight, the air thick with rubber and spice. There, a young man’s fate wound itself around a stalk of sugarcane: press it and you get sweetness, the fortune to come; what remains is fiber, tough and coarse, what the summit would cost. That is Robert Kuok in miniature — a boy left cold in a big family; an intruder who charged the entrenched British trading houses and pried open the world sugar trade; an overseas Chinese whose choices quietly redrew the commercial map of Asia.

A Boy at the Bottom of the Table

His father, Kuok Keng Kang — born in Fuzhou, orphaned early, youngest of six brothers and bullied by the eldest — sailed for Malaya in the summer of 1909, at fifteen or sixteen, landing in Singapore under a fourth brother’s wing. Around the First World War the archipelago’s spices soared, and five years of trading them brought the brothers nearly half a million silver dollars. Established, he married Zheng Geru, a fellow Fuzhou native from a scholarly family — educated, principled, by the day’s standards a new woman. Three sons followed: Philip Kuok Hock Khee, later a distinguished Malaysian diplomat; William Kuok Hock Ling, who joined the Malayan Communist Party and was killed by British forces in 1952; and Robert Kuok Hock Nien, born October 6, 1923.

Prosperity did not mean warmth: the father indifferent, the household neglectful, the brothers aloof — only his mother’s affection anchored the youngest son. Out of the imbalance came two vows: to make something of himself, and, once he had the power, to treat people fairly — to “hold the bowl of water level” — so no one under him would ever feel what he had felt.

Then the Depression thinned the fortune, and the rich man’s son wore underclothes sewn from flour sacks — the miller’s mark printed across the seat, the coarse cloth rasping his skin in the heat. School taught a matching lesson: in good years, an English colonial school where the Chinese boy never quite belonged; in lean ones, a Chinese school whose plainly dressed teachers taught with their whole hearts. “A person’s real worth,” he concluded, “has almost nothing to do with money.” In 1941, at eighteen, he entered Raffles College in Singapore — Lee Kuan Yew, the island’s future first prime minister, was a fellow student — and got half a year before the Pacific War erupted. Kuala Lumpur fell in January 1942, then within two months the peninsula and Singapore; at nineteen, his education was over.

Banana Money

To keep his family safe under the Japanese occupation — young men who stood aloof risked being branded Communist sympathizers and killed — he took a job in the rice department of Mitsubishi’s Malayan office, rising to junior manager, paid like everyone in “banana money,” the military scrip named for the banana trees on its face. A gray market grew around his desk, and Kuok did not play the saint — but kept his cut deliberately small: seed money, never enough to hang him.

The fortune evaporated anyway: Japan surrendered in August 1945, and three years of banana notes became wastepaper overnight. What he did next mattered more. With the war plainly lost, he kept showing up and dispatching grain meticulously, until his superior told him to go home. He refused: “The work in my hands isn’t finished. If I don’t see it through, my conscience won’t rest. Never mind the pay — I’ll finish the job.” Startled, then moved, the boss offered a parting favor: “We still have two or three hundred bales of cigarette paper in the warehouse. I’ll sell them to you — pay me in your banana money.” Kuok converted his own and his father’s doomed scrip into cigarette paper — scarce, and good as money after the war. Integrity had smuggled his savings across the wreck of one currency.

The Widow’s Company

Postwar Malaya was short of everything, and the British made the Kuok firm agent for rice, sugar, and flour, with supply rights to the central hospital and the army — monopoly agencies in a hungry market. The business roared back, with Robert, newly brought in by his father, at its center.

The father’s second act curdled at home: he took an unofficial second wife — a union the law did not recognize — and set up a second household. Zheng Geru withdrew for a time to China; when she pressed him to help her impoverished relatives, he stalled. His last filial illusions collapsed; his convictions hardened — fairness first, family before money. Keng Kang soon died worn out, leaving little: after debts, a million-odd Malayan dollars split between two households, barely a hundred-odd thousand per child.

On the edge of the classic fracture, the mother held the line: Zheng Geru convened the clan’s core — her sons and two kinsmen of her husband’s line, five shareholders in all, herself among them — and merged what remained into Kuok Brothers Ltd., founded in 1949 with the eldest brother as chairman, a cousin as managing director, and Robert, twenty-five, as executive director and company secretary — third in line on paper, the firm’s engine in fact.

The engine wanted a bigger machine. As controls loosened and rice margins thinned, grain would never yield the “big things” he had vowed; what separated the successful, he believed, was appetite for risk. Sugar caught his eye — reportedly at the canteen sugar jar, watching what price swings did to the cost of filling it. Malaya imported most of its supply, an Indian cargo took five or six weeks at sea, and world exports sat with a few countries — India, Thailand, Brazil, Cuba — so weather or politics anywhere moved prices everywhere; doublings, even twentyfold spikes, were on record. To the housewife a staple; to a trader, the cheapest of luxuries.

From about 1953 he quietly imported Indian sugar — and learned what he would not do. Rivals splashed seawater on sugar sacks, filed inflated insurance claims, and dumped below cost on the proceeds. Kuok forbade such games and competed on reliability. “Hearts are made of flesh,” he liked to say. “Give it time, and people see you for what you are.” Within a few years the fraudsters had vanished; his business was still there. By 1955 he had swung the company wholesale from rice to sugar.

Thirty Thousand Tons

In 1956 the Suez Crisis snarled world shipping and sugar more than doubled. It should have been his moment; it became his humiliation: still a small dealer buying through a British house, he watched the supplier tear up their verbal agreement, plead “tight supply,” and cut his quota — take it or leave it. The lesson seared in — the weak live at the mercy of the strong — and he swore to build a business so large no one could squeeze him again. His method acquired a signature: kick the door open, boldly but never blindly. “Before you kick a door in,” he said, “you’d better know what’s behind it.”

A door appeared in 1958: Mitsui was exporting fertilizer to India; Delhi, short of foreign exchange, offered 30,000 tons of white sugar in payment; Japan, protecting its refiners, took only raw sugar, so Mitsui needed a third party. Kuok all but leapt from his chair: “Thirty thousand tons — I’ll take it all.” Nothing like it had been done — locals bought a few hundred tons at a time, a few thousand at most, through British brokers — and he was staking the whole company on one trade.

It worked, and opened three doors. He never again needed the British houses, buying straight from producing countries. He collided with China — desperate for hard currency, it had just unloaded 3,000 tons into Malaya — and with a price war looming, the state trader COFCO proposed cooperation instead: Kuok took over selling China’s sugar in Malaya, the start of his long trust with Chinese official capital. And Mitsui, impressed, proposed a joint refinery in Malaya; the 1959 deal gave Mitsui and partners 40 percent, Kuok Brothers 26, local investors the rest — Malayan Sugar Manufacturing.

Building it nearly broke the family’s nerve: cash was tight, the board balked, the accountant said there was no money. When a relative-turned-finance-chief repeated it, Kuok slammed the table and roared: “Don’t be a fool! What we do now is find a way to raise that money!” The room went silent — then the family fell in behind him, scraping capital together while he sold profitable trading lines to fund it.

In 1964 the refinery went into production — the first modern refinery in Southeast Asia built by local private capital, Kuok as chairman. In 1968 he pushed upstream, founding Perlis Plantations Berhad to plant cane across northern Malaysia and close the chain from field to refinery. History paid the early mover: independence in 1957, federation in 1963, and, after tariff hearings in 1962, protection for domestic refining, then a ban on imported refined sugar. For years his plant was very nearly the country’s sole source, and the press crowned him the Sugar King of Asia; over four decades it earned a cumulative three billion ringgit before, early in this century, he sold the business to a Malaysian state enterprise.

Ten Balls in the Air

Success conscripted him. In 1968, out of patriotic duty, he chaired the new Malaysian International Shipping Corporation, the country’s first national line — and discovered the price of public enterprise: bureaucracy, entrenched interests, principle colliding with politics. Once it found its feet he eased out, later founding a private shipping line of his own. Harder still was Malaysia-Singapore Airlines, joint carrier of two freshly parted countries, taken on after Singapore’s deputy prime minister, Goh Keng Swee, pressed him: “If you won’t help, Singapore and Malaysia may truly have no bond left at all.” Four directors a side, each with a veto; meetings from half past nine until past seven at night; eight directors, eight noes — until 1972, when the governments split it into Malaysian Airline System and Singapore Airlines. The verdict: without trust and a common goal, politics and business grind an enterprise to powder.

“I can keep ten balls in the air,” he said of those years. “As long as six don’t drop, I’m far ahead of the fellow who can’t manage two.” Congenitally restless, he handed back the government hats by the early 1970s and turned to a bigger question: where to grow.

The China Gambit

Malaysia, he had concluded, was too small a pond — “In a market this small, whatever you do, you hit the ceiling fast” — and its pro-Bumiputra policies were narrowing the field for Chinese businessmen. Indonesia was volatile and unfriendly to Chinese capital; Hong Kong — free port, sound law, the hinge to a vast China — was the obvious base. From the late sixties he shifted his center of gravity there, incorporating Kerry Holdings in 1974 — the name a play on the family surname — as his beachhead. A second signature had appeared in 1971: a Singapore luxury hotel named Shangri-La, for the paradise of Lost Horizon, over partners’ doubts about a name from fiction — “That’s the one.” It became the region’s star, cloned in Malaysia, Thailand, and Fiji — and then, as China’s door cracked open, on Hangzhou’s West Lake and in Beijing, among the earliest foreign hotel investments there.

His largest opportunity came from the country his family had left. Around 1973 China was critically short of sugar — 300,000 tons — and nearly bare of foreign exchange; through COFCO, Beijing quietly asked Kuok for help. A leaked order of that size would have driven world prices up 20 or 30 percent — a fortune for anyone positioned ahead of it. He took no position. He agreed on the spot and ran the buy like a coup: orders scattered in small lots through his network, then a flight to Brazil, the largest exporter, to lock in supply when rumors stirred. The 300,000 tons arrived on schedule at prices barely above normal — and hedging in the futures market actually earned China some six million U.S. dollars, when its entire reserves ran to a few tens of millions: the first successful commodity-futures operation in the People’s Republic’s history.

Beijing did not forget. When reform opened China after 1978, Kuok moved in early and at scale: Shangri-La hotels; the venture behind Arawana, the cooking oil in seemingly every Chinese kitchen; and the China World Trade Center in Beijing — the first large commercial property of the 1980s opened to foreign bidders, slated for Chase Manhattan until ideological qualms shelved it. Relaunched a year later without Western banks, it found Kuok waiting with 90 million U.S. dollars parked in two Hong Kong banks; against every warning, he bid, and won.

Mid-construction came the insult: whispers that he was “stealing state assets, taking advantage of China.” His temper — aides had been scolded to the brink of resignation — went off like a charge, and he marched into the foreign-trade minister’s office: “Someone accuses me of stealing state property. Let me ask you, Minister — is your country poor, or rich? I came to help, sparing no pains, and you talk behind my back. Fine — I’m out. Take my shares back at cost; count the principal and interest however you like. I don’t need to make one cent.” A vice-premier came to make peace — officials are a mixed lot, bear with us; your blood and sweat are plain to all; the fruit is nearly ripe, don’t walk away — on, as it happened, the day the tower topped out. The fury subsided; Kuok stayed.

Staying was right. The center became the defining landmark of Beijing’s business district — still the country’s largest Sino-foreign joint-venture property project — and a lighthouse besides: when Li Ka-shing developed Oriental Plaza in the 1990s, he walked a road Kuok had cut ten years earlier. The gambit honored his ancestral country and backed his cold conviction that China’s rise was coming.

What carried him was a braid: a neglected boy’s stubbornness; an eye that saw around corners, from sugar’s volatility to China’s rise; a name for keeping his word, which brought his first stake from a Japanese manager and a nation’s sugar supply from Beijing; and the level bowl of water — quiet philanthropy, devotion to his mother, fairness in his firms. He was no saint — the temper real, the standards merciless, the tongue a blade — but the harshness aimed only at sloppiness and unfairness, never at the weak; his people mostly stayed for decades.

He has passed his hundredth year now, fond of one proverb: plant good causes, reap good fruit. But founding an empire is only the overture — harder than making a fortune is keeping one. As his light recedes, the questions turn: can the values still guide, are the heirs equal to the load, will blood and trust across four generations hold, will the networks protect and the structures outlive his hand, can the fortune keep compounding in new hands? The old curse says wealth never survives three generations; how the House of Kuok answers it is the story of Part II.