KUALA LUMPUR: Family businesses are prone to feuds between family members that are often destructive, leading to businesses being broken up and strained relationships. With this in mind, the third and fourth generations of Royal Selangor’s founding family, who are still involved in the business, have been guided by a family charter since 2003.

The family charter formalises the succession process and governs the way members interact with the business and vice versa, Royal Selangor International Sdn Bhd general manager Yong Yoon Li said.

Yong is a fourth generation member of the family involved in the business.

“The transition from one generation to another — especially from my great-grandfather to his children — can be quite painful,” said Yong.

The second generation of Yongs experienced first-hand family disputes that led to the creation of three pewter companies, of which only Selangor Pewter, later renamed Royal Selangor, survived.

Furthermore, with all of founder Yong Koon’s grandchildren now sitting on the Royal Selangor board, the family is sensitive to the potential for feuds.

“The family charter is a form of good practice for family businesses. Family feuds are common. The fact that we went through one a couple of generations ago, the family is quite conscious of the way the family handles business,” said Chen Tien Yue, general manager of Royal Selangor Marketing Sdn Bhd.

Chen is also a fourth generation member in the family business, making him and Yong cousins.

Royal Selangor has certainly come a long way from the days when Yong Koon first came to Malaya in 1885, shortly after the British made Kuala Lumpur — then a thriving mining town — the Selangor state’s seat of administration.

As Kuala Lumpur grew and prospered so did Yong Koon and his brother’s tinsmith business located at Cross Street, the present day Jalan Silang. The business was known in Hakka as Ngeok Foh or in Mandarin, Yu He, which means Jade Peace.

In the bustling tin mining town, the Yong brothers not only made basic household items but also prayer wares such as pewter incense burners, joss stick holders and candle stands for the Chinese prospectors.

Through two world wars, numerous recessions and family squabbles, Yong Koon’s pewter business evolved and constantly adapted in order to survive. It not only survived, but continues to thrive as Royal Selangor today, with the business remaining very much within the family, managed by Yong Koon’s grand and great-grandchildren.

“Royal Selangor grew up with Malaysia. Back in the 1800s, when my great-grandfather came to Malaya, he came with a great wave of migrants. They came to mine tin but my great-grandfather decided to give a bit more value-add. He worked with the material rather than mine the material,” said Yong.

Malaya under British rule also meant catering for a Western clientele, making products such as tea sets, trinket boxes, tobacco boxes and tankards. When the Japanese came, Yong Koon made flasks, sake sets and cigarette cases for the servicemen.

“He had to move with the times. As the country grew and progressed through its various phases, Royal Selangor moved with it,” he said.

After Merdeka, the tourism boom in the 1970s brought with it a new group of customers enchanted with the sunny beaches of the tropics, and Selangor Pewter, as it was known then, made souvenirs for them.

“We realised that these foreigners liked our products, vases and picture frames, and we thought we could export these products and this laid the foundation for the export market,” Yong said.

His grandfather Yong Peng Kai, who by then was the only one among his siblings remaining in the pewter trade, took it to the international stage in the 1970s to diversify away from a reliance on tourists.

The move coincided with Malaysia’s policy of import substitution and export promotion undertaken in the 1970s.

Selangor Pewter’s first foreign venture was Singapore, where it set up a factory in 1968 (which was closed eventually due to high production costs). This was followed by Australia where it set up a sales subsidiary in Melbourne in 1977, making the country Selangor Pewter’s first Western market.

Today, Royal Selangor’s products can be found in over 20 countries. Its biggest markets are Singapore, the UK, Australia, China, North America, Hong Kong and Japan.

(In 1992, the company changed its name to Royal Selangor in recognition of the royal warrant conferred by the late Selangor ruler Sultan Salahuddin Abdul Aziz Shah.)

When asked what were the critical steps taken over the last 126 years which set the foundation for Royal Selangor, Chen said the first would be the modernisation of the factory floor, which made it possible for his grandfather to scale up production.

“In the old days it was a cottage industry. He did everything himself and you can’t scale up. Grandfather (Yong Peng Kai) in the 1960s told workers to specialise and he trained people in different areas and had some form of production process. This was one trigger point which allowed the business to expand,” he said.

Yong said his grandfather was a “real tinkerer” who liked to experiment with new machines and technology.

“A lot of processes in the factory were developed by him in the early 1960s. As it grew bigger and bigger, a lot of the craftsmanship processes were formalised — a lot of the craftsmen were more skilled rather than multi-skilled. That’s his creation,” he said.

Another important milestone was Selangor Pewter’s international expansion where it had to cater to different demands and tastes.

The third important phase was the last five years, when Royal Selangor again had to evolve to capture the younger generation of consumers. That meant going into different product categories such as personal accessories, making cuff links and pendants as opposed to the traditional range of homewares.

For the future, Chen said there is ample room for growth abroad as half of Royal Selangor’s business is derived from Malaysia. As for product offerings, he said Royal Selangor will have to keep evolving with the times.

“We like the heritage we have. We like the fact that today we are still designing and making things in pewter as our great-grandfather was doing over 120 years ago. That’s a nice heritage to continue and preserve,” he said.

Through the years as the company continues to evolve, one thing remains the same at Royal Selangor, its philosophy revolving around sound craftsmanship, quality design and innovative products, said Yong.

With 126 years of experience coupled with the family’s foresight, Royal Selangor looks set to continue prospering for many more years to come.

This article appeared in The Edge Financial Daily, September 12, 2011.