Straits Trading's big bet on Butterworth

Leveraging OCBC’s financial muscle and his vision, Tan moved decisively to acquire several multinational corporations (MNCs), including diversified group Straits Trading Company (STC), Raffles Hotel, retailer Robinson & Co, property conglomerate United Engineers (UEL), as well as beverage giant Fraser and Neave (F&N), which eventually became some of Singapore’s best-known companies.

STC, in particular, boasts a 138-year history, beginning as a tin smelting powerhouse before evolving into a conglomerate-investment company with operations and financial interests in resources, property, hospitality and financial investments.

Tan’s acquisitions were not merely about ownership but strategic positioning within Singapore’s business ecosystem. OCBC’s approach was to acquire stakes in companies it could also finance, creating business opportunities while mitigating risk by maintaining greater oversight of its borrowers.

His intervention had a lasting impact — safeguarding jobs during a critical period for Singapore’s economy, ensuring the long-term success of these companies and reinforcing OCBC’s role in driving economic stability through strategic investments. Many of these businesses flourished, contributing significantly to the island republic’s growth.

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By 2000, however, Singapore’s financial landscape was undergoing a major transformation. The Monetary Authority of Singapore (MAS) — then chaired by Lee Hsien Loong before his tenure as prime minister — introduced new regulations requiring banks to separate their financial and non-financial activities.

This restructuring mandate forced banks to divest their non-financial assets — either by selling them to third parties or transferring them directly to their principal shareholders — ensuring these businesses were no longer held under the financial arm of banking groups.

In 2008, three years after Tan passed away, his family’s investment group — Tecity Group, led by his handpicked successor and granddaughter Chew Gek Khim — wrested control of STC from the Lee family of OCBC Bank in a hard-fought corporate battle (see “Preserving Tan Chin Tuan’s legacy while steering Straits Trading forward”).

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Chew is executive chairman of Tecity, which she joined in 1987 — the year STC celebrated its centennial anniversary. Tan is her maternal grandfather.

Fate would have it that about two decades later, Chew, then 46 years old, would spearhead Tecity in a blockbuster deal that would see it take over STC in 2008.

Since then, she has led STC’s transformation from a traditional tin smelting and trading house into a diversified investment conglomerate.

One of STC’s most ambitious undertakings is Straits City in Butterworth, Penang — its largest property development project in Malaysia (and elsewhere) to date, with a gross development value (GDV) of RM4.6 billion ($1.4 billion). The 16-year integrated mixed-use development master plan, initiated in 2022, is expected to be fully completed by 2038.

Dressed in her trademark cheongsam, the 63-year-old Chew, in an exclusive interview with The Edge Malaysia at the Crowne Plaza Penang Straits City’s Wellesley Lounge overlooking the Penang Strait in Butterworth, acknowledges that the project is a major milestone even for a storied conglomerate like STC.

“Straits City is quite an ambitious property project for us. Our Crowne Plaza hotel, which is the first of 10 phases of our larger development project, was completed in September last year and officially opened in February this year.

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“It’s been 17 years since we acquired STC. Like everything in life, the journey has been interesting, much like a roller-coaster ride. We had our good years and we had our bad years,” says Chew, who has been chairman of STC since April 2008, first as non-executive chairman and then as executive chairman since November 2009.

She is recognised as one of Asia’s top business personalities, renowned for her ability to reinvigorate heritage companies and create long-term value for stakeholders.

According to her, Straits City is envisioned as a smart city, integrating cutting-edge infrastructure and Internet of Things (IoT) technology.

“That’s why our tagline for this master development is Straits City, Future City. This land is essentially a white sheet — we’re not constrained by outdated infrastructure, which can be challenging to work around. Starting from scratch allows us to seamlessly incorporate modern smart city elements into our project,” she says.

When Tecity took control of STC in 2008, the group had already owned the Butterworth land for some time. However, the parcel remained largely vacant and underutilised.

“In that sense, we inherited it. I wouldn’t say the land wasn’t well managed, but I think we didn’t manage it optimally. Of course, we always knew this land had potential, but it’s a very long-term game,” says Chew, a lawyer by training.

Meanwhile, she acknowledges the need for new technology at MSC’s Butterworth smelting plant, which has been in operation for over a century. The opportunity to acquire a distressed smelter in Klang provided a practical solution.

“It made sense for us to buy it [the Klang smelter]. At the same time, this area [Butterworth] is up and coming, so shutting down the old plant and redeveloping the site is the logical step forward,” says Chew, who is also chairman of MSC.

The decommissioning process is already in motion.

“Our Butterworth smelter will be demolished by the end of this year, if not May. We will be carrying out decontamination works over the next two to three years. After that, we’ll need to rehabilitate the land. So, the redevelopment of the MSC site will start no earlier than three years from now,” she explains.

Chew reiterates that the group will focus on developing STC’s land first before moving on to the MSC site. While the master plan spans 16 years, the actual timeline remains flexible and will be adjusted based on market demand.

“We need a time frame, and it’s set at 16 years. Whether we accelerate it or not will depend on market conditions, but we can always fine-tune it along the way,” she says.

Unlike developers racing against loan repayments, STC is in no rush to push out projects, given that the land is freehold and fully paid off.

“We’re not obsessed with the timeline because we already own the land. It’s not like we’re paying bank interest and worrying about rushing it. We have the luxury to manage it properly and launch our projects only when the time is right,” says Chew.

However, she acknowledges the risk of mistiming the market.

“If we launch too early, we may have to wait for demand to catch up. If we overspend or overbuild, it could go wrong too. But otherwise, we don’t see any major risk factors.”

The ongoing transformation of Butterworth and Seberang Perai suggests that demand may not be far behind. That’s partly due to the fact that the mainland is home to more than half of Penang’s labour force — many of whom travel to the island to work — while making up over two-thirds of Penang’s land mass.

Sunway Carnival Mall, which opened in 2007 in the town centre of Seberang Jaya, has already established itself as a major retail hub with a net lettable area (NLA) of about one million sq ft, housing 350 shops and 3,200 parking bays. Nearby, Sunway Medical Centre Penang adds to the area’s growing appeal as a commercial and healthcare destination.

Meanwhile, Belleview Group is developing GEM Residences, a four-tower residential project in Seberang Perai, alongside GEM Mall, which is touted to be the largest shopping mall in the northern region. With Sogo department store as its anchor tenant, the six-level mall will span 1.2 million sq ft of NLA, offering about 450 shops and over 3,800 parking bays.

For STC, the newly opened Crowne Plaza Penang Straits City — managed by multinational hospitality giant InterContinental Hotels Group — marks the first completed phase of its prime waterfront master development in Butterworth. The opening of the 23-storey, five-star hotel also signals the transformation of the Singaporean firm’s legacy assets and land bank on Penang’s mainland, setting the stage for Straits City’s growth.

Capturing spillover effect
Chew highlights Straits City as a landmark project designed to integrate commercial, retail and residential components, positioning it as a key business and lifestyle hub in the northern region. Crowne Plaza Penang Straits City, for instance, is already catering to rising business travel and foreign investment activity in the northern states.

“As luck would have it, with the US-China trade war, more businesses are coming into Penang and Kedah. There is a spillover effect from Batu Kawan and Kulim. Essentially, we see Butterworth as a hub. With what is happening here, we think it is timely for us to develop this part of Malaysia,” she remarks.

Chew points out that Penang Sentral — a one-stop northern transport hub for trains, buses, ferries and taxis — plays a crucial role in Straits City’s development, given its proximity to the first Penang Bridge.

She also believes it is only natural for spillover growth from Penang Island to extend into Butterworth, especially considering the price gap between the island and mainland.
With more affordable property prices, Butterworth is an attractive alternative for businesses and residents alike. In contrast, Chew notes that Batu Kawan and Kulim have fewer commercial developments, making Butterworth a more strategic hub for growth.

“We want to offer this element in Butterworth, and we want to complement Batu Kawan and Kulim. That’s why we are not making Straits City an industrial area and we are not building factories here. It doesn’t make sense,” she says.

“We want to offer some useful residential and commercial services to the people who work in those industrial areas. We hope they will come to live in Butterworth. These are the people who will come here to use our hotels, our residences, our malls.

“If you work in an industrial area, and you want to host a company event, you won’t have it there, you would have it here. Location-wise, we are strategically located in between Penang Island, Batu Kawan and Kulim. You could drive up or you could drive down from Butterworth.”

Straits City’s proximity to Penang Sentral underscores its strategic location. Chew notes that while STC always recognised the potential of its Butterworth land bank, the question was always about timing.

“We always thought this was a good piece of land, but the question was: When would it take off? We weren’t so sure. We had our master plan, but we were slow to push the development. Now, it looks like the timing is right,” she observes.

“Our sites are very near the Port of Penang and Penang Sentral. We haven’t really explored air connectivity yet, but there’s potential. Many Indonesians fly into Penang from Medan for medical tourism. As demand grows, connecting the island to the mainland is a logical extension. We are right next to Penang Island and close to the North-South Expressway.”

Following the completion of the Crowne Plaza hotel, STC will move on to Phase 2, for which the group plans to build serviced apartments.

“We plan to launch the project within a year and complete it within three years. The details are still being worked out as we are determining the right mix of units for own stay and independent living,” says Chew.

STC is positioning its serviced apartment project to cater primarily to professionals and workers from nearby industrial zones.

“Let’s say if they are working in the mainland, will they be interested in staying in our serviced apartments? As for independent living, we are hoping to attract people from Kuala Lumpur and Penang Island.

“Will the Singaporeans be interested? I don’t know. Perhaps they do not want to own a house anymore. Maybe they don’t want to do all the house work anymore. If they are interested in independent living, that’s something we could offer them,” she says.

Chew notes that as Penangites age, they may find it less necessary to live on the island, especially with more affordable options on the mainland. Similarly, KL residents looking to downsize could be another key demographic.

“Many of them have big houses, but their children have grown up and moved out. They may want to move into our fully serviced apartment. That’s the kind of market that I am looking at,” she says.

As for Phase 3, STC will be looking at commercial projects, such as offices and shopping malls.

“Will people be working from home? Will the offices of the future be kind of different from the stereotypical offices that we have in mind? We have to study further. As for malls, we want to offer convenience to our residents in Straits City,” says Chew.

Evolving with the times
In the early years of Singapore’s colonial history, STC was established to serve the region’s booming tin smelting industry. Incorporated on Nov 8, 1887, by Scottish businessman James Sword and German entrepreneur Herman Muhlinghaus, the company started with an initial capital commitment of 150,000 Straits Dollars.

By the 1900s, STC had built a strong reputation in tin smelting, with its Pulau Brani smelter gaining international recognition for producing some of the purest tin in the world. In 1912, “Straits Tin” accounted for two-thirds of Malaya’s tin output, with operations later carried out under MSC.

Over the decades, STC’s business evolved alongside the region’s economic landscape. In the 1960s, the company diversified beyond resources into property, equity investments and hospitality. This expansion set the foundation for its current structure as a conglomerate-investment company with a focus on real estate and resources.

One of its key real estate ventures is Straits Real Estate (SRE), which focuses on acquiring completed properties, enhancing their value and then selling them for profit. This differs from STC’s long-term property developments. At the same time, the company is exploring innovative approaches in real estate ownership, including fractionalisation. Chew explains, “We also have a real estate investment company called SRE, which we use to acquire completed buildings, add value and flip them.

Besides, we are also doing a small experiment, trying to fractionalise the real estate in Singapore. It is still at an early stage as we still need to go through governmental approvals. We intend to offer people a chance to own a part of real estate.”

She explains that fractionalisation differs from a real estate investment trust (REIT).

“People think fractionalisation is the same as a REIT, but they are not the same. In the REIT, you actually own a unit of a whole pool of properties. However, if you want to own a shophouse, because you really like that particular shophouse, but you cannot afford to buy the whole shophouse, fractionalisation allows you to own a part of it. That’s the idea,” says Chew.

She points out that since taking over STC, the group has remained in its core areas of expertise but has continuously adapted to market shifts.

“After we did the takeover, we have been trying to stay in the same areas. But at the same time, we have kept making changes. To give you an analogy, if you are in the food business, you would keep making foods, but the types of foods might change over time because your customers’ tastes change,” she says.

While STC remains committed to its long-standing businesses, Chew acknowledges that the transformation is necessary.

“Again, it’s been an interesting journey as we have done quite a few transformations along the way. But we still stick to our main businesses. It’s just that we have been making minor changes to remain relevant,” she says.

“For example, in our resources division, we have our tin smelting and tin mining operations. These business activities do not change. But we find new ways or new methods of smelting and mining. And now, we are even looking at financing. So, we are expanding into related areas.”

STC is 66.97%-controlled by Tecity. Over the past 12 months, its share price had declined 6.62% to settle at $1.41 on March 26, giving the company a market capitalisation of $640.7 million.

For the financial year ended Dec 31, 2022 (FY2022), STC posted a record profit of $551.26 million — the highest since Tecity’s takeover. The group, however, slipped into the red with net losses of $28.6 million in FY2023 and $7.2 million in FY2024. This was partly due to fair value loss from the derivative component of exchangeable bonds, as well as weaker performance in its tin smelting segment.

MSC’s tin smelting division reported a lower profit of RM23.4 million in FY2024, a year-on-year decline of 35% from RM36 million in FY2023. The lower profitability and reduced sales of refined tin derived from processed tin intermediates were mainly due to lower incoming feed as a result of China’s accumulation and stockpiling of tin ore, as well as foreign exchange fluctuations, given the strengthening of the ringgit against the US dollar.

Nevertheless, STC continued to pay dividends of eight Singapore cents per share in FY2023 and FY2024. Cumulatively, it has paid dividends totalling $4.30 per share since Tecity took over the company in 2008.

STC has invested in a diverse portfolio of real assets around the world for customers across industries. Its Malaysian properties include 1 Mont Kiara Mall in KL, AEON Bandaraya in Melaka, Ipoh Parade Mall in Perak, as well as Klang Parade Mall and Citta Mall in Selangor.

Meanwhile, its overseas properties include business parks and retail parks in the UK, offices and logistics properties in Australia, shopping malls in China, as well as state-of-the-art modern logistics facilities in South Korea.

As at Dec 31 last year, SRE’s cumulative assets under management amounted to $2.047 billion. Its portfolio occupancy rate was maintained at 88.9% through proactive leasing.

Preserving Tan Chin Tuan’s legacy while steering Straits Trading forward

Singapore-listed The Straits Trading Co (STC), a member of the Tecity Group, was founded by the late Tan Sri Dr Tan Chin Tuan, the man credited with shaping Oversea-Chinese Banking Corp (OCBC) into one of the world’s soundest banks in the 1980s.

Beyond his influence in banking, Tan was a firm believer in lifelong learning — a principle he upheld throughout his life. Born in 1908, he passed away in 2005, leaving behind not just a financial empire but also a deeply rooted value system.

In an exclusive interview with The Edge Malaysia, STC executive chairman Chew Gek Khim, his granddaughter, reflects on her time with him and the lessons imparted that continue to guide her leadership.

“I lived with him. We were in the same house, a multigenerational home. I learnt from him … simply by spending time with him. I listened, I absorbed and I picked things up,” she recalls.

According to Forbes magazine, Chew and her family were the 35th richest in Singapore with a net worth of S$1.39 billion in 2024.

At STC’s helm since 2008, she remains steadfast in upholding the principles instilled by Tan, who was not just her grandfather but also her mentor.

“Our company’s mission is to create value for all stakeholders and to learn in the process. Whatever we do must be valuable to our customers, shareholders and partners. That is the underlying philosophy,” she says.

“We must do things properly, with integrity, and treat people fairly. We keep learning. We don’t just repeat the same thing every day. We grow, we gain experience and we don’t make the same mistakes twice.”

While many successors of Asian family businesses struggle with the weight of expectations, Chew insists she does not feel pressured.

“Not really. Pressure is something we impose on ourselves. A legacy is essentially a value system — it’s something we continue. If we believe in it, there’s no real pressure. You either live by the values, or you don’t. To me, it’s straightforward: We create value, and we learn. That’s it. How much pressure is that?”

She credits her grandfather with shaping her perspective on success and failure, recalling a particularly impactful lesson.

“He once told me, ‘You know, Khim, it’s okay to fail. You just have to pick yourself up and carry on.’ That was one of the most important pieces of advice he ever gave me. Since then, I’ve learnt to accept that there will be good times and bad times, and that has made me feel less pressure.”

At the core of it all, she believes one must have conviction in one’s work. While pressure is inevitable in business — after all, no one starts a venture with the intention of losing money — what truly matters is navigating challenges with resilience. There will always be frustrations when things do not go as planned, but that is simply part of the journey, she says.

Traditional wisdom in modern business
Contrary to the belief that family businesses are outdated, Chew argues that many traditional principles remain relevant today.

“I don’t see much difference. You can’t say family business is old-fashioned. Many modern business practices are just rebranded versions of what was done in the past,” she points out.

“Today, people talk about diversity, inclusion and equality. But actually, this is just common sense. If you want different perspectives, you hire people from different backgrounds. Without diversity, everyone will think the same way, and the outcome will either be very right or very wrong.”

Chew believes that a company will operate more prudently with a range of viewpoints.

“If I say, ‘Hey everyone, I think we should do it this way’, and someone else challenges me, ‘Khim, have you thought about this?’ — that’s the kind of diversity that helps us make more calibrated decisions.”

She also sees parallels between modern corporate principles and fundamental business ethics that have existed for generations, particularly in environmental, social and governance (ESG) practices.

“Many think ESG is a modern idea, but it’s not. Old-fashioned companies already understood these principles. They were looking after the environment long before it became part of the corporate agenda. In the past, people recycled like nobody’s business, simply because they couldn’t afford to waste.”

Chew points out that in the past, wealthy families and clans in Singapore and Malaysia naturally gave back to society, understanding that social harmony depended on it.
“When you make money, naturally you want to help people. Otherwise, you will have violence and unhappiness in society,” she says.

Likewise, good governance is just common sense, she argues. “You don’t take company money to go shopping and gambling. That’s not good business. If you run a business, you can’t take money from your shop for personal use.”

At STC, whose roots lie in colonial-era Singapore, Chew’s focus is on ensuring the 138-year-old company remains adaptable and forward-looking.

“My main job is to make sure STC stays relevant. Take real estate — can I make it more relevant? That’s why we’re exploring fractional ownership. Will people like it? We don’t know yet. Similarly, we’re looking into independent living for seniors.

“As for our subsidiary Malaysia Smelting Corp Bhd (KL:MSC), the company is in mining and smelting — we don’t want to use technology that’s 100 years old. If there are new, more efficient and environmentally friendly methods, why stick to outdated ones?”

Rather than setting a rigid end goal for STC, Chew prioritises sustainability and succession planning. “I don’t have an ultimate goal for STC. But if it can be sustainable and continue creating value, that will be ideal. A succession plan must always be in place, but it depends on where we are at that point.

“Right now, we have many professionals running the business, and that’s perfectly fine. Whether family members take over in the future depends on competence. We have to groom people, whether they are from the family or not.”

She acknowledges that while shareholders must safeguard their interests, that does not mean interfering unnecessarily. She goes on to say that effective leadership should be given the space to operate, but if performance falters, intervention becomes necessary. The priority is ensuring the company remains in capable hands.

Despite being born in an era of traditional values, Tan was ahead of his time, says Chew. “He was a very modern person for his era. You have to understand, he was born in 1908, when it was common for men to have multiple wives and to believe women didn’t need education.

“But my grandfather had only one wife, and he ensured all his children — boys and girls — were educated. My mother became a doctor and an eye surgeon. He was very progressive.”

According to her, Tan also embraced societal shifts, particularly women’s participation in the workforce.

“He told me that before World War II, women didn’t work. But after the war, when many men had died, women entered the workforce — and he found them to be excellent employees.

“He hired his first female secretary after the war. As the world evolved, so did his mindset, and that’s something I learnt from him.”

The STC takeover — fulfilling a promise
One of Chew’s most defining business moves — taking over STC in 2008 — was deeply influenced by her grandfather’s vision.

By the early 2000s, Singapore’s banking regulations forced financial institutions to separate their banking and non-banking assets, leading OCBC to divest its stakes in companies Tan had strategically acquired for the bank.

This dismantling of a carefully crafted business empire, to him, was more than just regulatory compliance — it meant losing control over businesses that had been integral to Singapore’s economic growth. Seeing these assets sold off to third parties was not just frustrating, but also painful.

Against this backdrop, Tan urged Chew to “buy at least one of my companies”. While he did not specify which company, the takeover of STC in 2008 was an opportunity to preserve at least part of what he had built.

“He told me, ‘Keep something’. That’s part of the reason we bought STC,” she says.

Chew reveals that her earlier attempts to acquire other companies were not successful. “I tried to buy Robinson & Co [in 2006], but I failed. I tried to buy United Engineers, but I failed. I tried to buy Raffles Hotel [in 2005], but I failed. But when the opportunity to acquire STC arose, I succeeded — it was opportunistic, and there was a bidding war.”

Through her family’s investment vehicle Tecity, she made an offer to acquire STC in early 2008, triggering a high-profile bidding war with the wealthy Lee family, the founders of OCBC.

The Lee family’s patriarch, the late Tan Sri Lee Kong Chian, is today known as the founding father of OCBC. He was the son-in-law of Chinese community leader and philanthropist Tan Kah Kee, who introduced him to the rubber industry. Lee subsequently founded Lee Rubber Co, which became the biggest rubber planter in Southeast Asia.

Likewise, Chew’s grandfather Tan, nicknamed “Mr OCBC”, was a towering figure in banking, having played a pivotal role in shaping OCBC’s growth and Singapore’s financial landscape. He was also the paternal uncle of Tony Tan Keng Yam, another OCBC banker and politician who served as the seventh president of Singapore from 2011 to 2017.

The fight for STC began on Jan 6, 2008, when Tecity made an initial offer of S5.70 per share, valuing the commodity and property firm at $1.86 billion. In response, the Lee family countered with a higher bid of $5.76 apiece before raising it to $6.55 per share, escalating the battle for control over one of Singapore’s oldest trading houses, whose assets spanned metals trading, hotels, properties and one of the world’s largest tin smelters.

Over the next two months, Singapore watched as two of its most prominent banking families — both closely linked to OCBC — went head-to-head over STC. The bidding war culminated when Tecity raised its offer to $6.70 per share, an 18% premium over its initial bid, pushing STC’s valuation to $2.18 billion.

In March 2008, citing market volatility, the Lee family finally withdrew its bid and decided to accept Tecity’s rival offer. OCBC’s insurance arm Great Eastern subsequently sold its 19% stake in STC to Tecity.

With the Lee family conceding defeat, Chew secured an 89% stake in STC, cementing her control over the company.

Although Tan passed away in 2005 at the age of 96, three years before the STC takeover, his words stayed with Chew.

“When you build something and see it being dismantled, it’s painful. It’s like building an entire Lego city, only to watch it taken apart — you’d naturally want to keep something,” she says.

When asked whether her grandfather would have been proud of her efforts, Chew remains pragmatic.

“I don’t know about that,” she laughs. “But at least I did what he asked me to do. I am still managing it. Maybe that’s my legacy. Perhaps it’s not such a heavyweight [compared with his legacy]. Is [the takeover of STC] really that great? Maybe not. But I did what he asked.”

For Chew, preserving a legacy is not about nostalgia or pressure — it’s about principles, adaptability and creating lasting value. And as long as STC continues to evolve while staying true to its core values, she believes her grandfather’s legacy will remain very much alive.