Unsung Kingmakers – the low-key Song Brothers who conquered the Shanghai Bund and Victoria Harbor and backed the development of several key industries in post-War Hong Kong

York Lo: Unsung Kingmakers – the low-key Song Brothers who conquered the Shanghai Bund and Victoria Harbor and backed the development of several key industries in post-War Hong Kong

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Obituary of V.K. Song (Source: Wah Kiu Yat Po, 1960-10-31)

York adds: Wendy Song, VJ Song’s granddaughter has kindly given permission to include two photographs of VK Song in this updated version of the original article.

Before the emergence of Chinese tycoons such as Li Ka-shing and Sir Y.K. Pao in the 1970s, two brothers who were the co-founders of the Wheelock Marden group in Shanghai – Vung-Kwe Song (宋文魁, 1888-1960, hereafter referred to as “V.K. Song”) and Vung-Ji Song (宋文傑 , 1894-1968, hereafter refer to as “V. J. Song”) – had quietly assembled a business empire in post-war Hong Kong through the acquisition of a significant stake in Kowloon Wharf (now Wharf Holdings) and had become leading pioneers in several key industries such as textiles (Textile Corporation of HK),  toys (HK Industrial, acquired by Mattel), flashlights (V.K. Song & Co, renamed Sonca after its acquisition by Eveready) and steel and shipbreaking (HK Rolling Mills, Metal Industries and Fuji-Marden).

With the exception of Wharf and V.K. Song & Co, the Song brothers made most of these investments in conjunction with their longtime business partners from Shanghai – the Marden family and except for Textile Corporation where V.J. Song served as managing director, the brothers largely stayed behind the scene and left the management of the firms to others. As a result, their critical roles especially in the formation of many of these enterprises and their contributions to the development of HK industries has largely been overlooked.

This article attempts to retrace the stories of these unsung kingmakers.

Rising to the Top in Shanghai (Wheelock Marden)

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VK Song and George Marden in Shanghai, c1930s Courtesy: Wendy Song

 V.K. Song was a native of Shanghai and during World War I, he served as an interpreter in France for the Chinese Labor Corps, the over 140,000 Chinese contract workers working for the British and French forces in Europe. After the end of the War in 1918, he returned to Shanghai to join the British controlled Chinese Maritime Customs in Shanghai where he befriended George Ernest Marden (1892-1966), an English colleague of German descent who also served in Europe during WWI as a fighter pilot.

The entrepreneurial Song did not stay a bureaucrat for long and sensing an opportunity to provide ferries in the burgeoning metropolis, he started the Whangpoo Ferry Service (黄浦轮渡局) in the early 1920s.[i]

In 1925, Marden also took the entrepreneurial plunge and Song not only provided the financial backing to help his ex-colleague start the customs and shipping brokerage firm of G.E. Marden & Co (茂泰洋行) but also injected Whangpoo Ferry Service into the firm to provide the young firm with assets and steady income stream.

As Shanghai and other coastal ports in China were controlled by Western nations at the time, having an Englishman at the helm of the firm had many advantages. For Marden who spoke some Cantonese but no Shanghainese or Mandarin, Song was the perfect partner to deal with the Chinese workers, customers and government officials. Marden also proved to be an astute businessman and was the first in a series of successful entrepreneurs whom the Songs would back over time.

From the start, the Songs were business partners with the Mardens as equals on the boards of various affiliated corporate entities and not compradors, a rather unique relationship at the time. In fact V.K. Song initially drew the same monthly salary of 150 taels as George Marden and most of the transportation related businesses in Shanghai were run by V.J. Song who had joined the business to assist his older brother. And when 2 workers were killed as violence broke out during a strike in 1934 and the KMT authorities tried to bring V.K. to court, Marden stepped in claiming all responsibility to protect his old partner.

The Whangpoo Ferry grew to operate a dozen launches and ferry boats and in 1928, they expanded into the moving business by launching Shanghai Household Removing Co (上海搬场公司) in Hankow Road, which over time grew to a fleet of 20 lorries, some of which were converted to hearses for funerals when not utilized for moving furniture.

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Left: A Whangpoo Ferry Service ticket office in old Shanghai (Source: Harrison Forman Collection) Centre: George Marden (Source: The Rotarian, 1954) Right: a Whangpoo Ferry Service receipt

In 1930, Marden and Song successfully listed G.E. Marden & Co on the Shanghai exchange with the heads of two large Jewish merchant houses, H.E. Arnhold (also chairman of the Shanghai Municipal Council at the time) and R.S. Sassoon joining their board. The listing was arranged by the Jewish stockbroker Ellis Hayim (1886-1976), who had also helped the firm enter the storage business by arranging a debenture to finance the construction of a five-storey godown in which they managed to secure the tobacco giant BAT as a key tenant.

The ambitious duo soon set their sights on acquisitions of larger firms to further grow their business empire and found Wheelock & Co (會德豐洋行), a firm founded by a Canadian American by the name of Thomas Reed Wheelock in 1861 which controlled Shanghai Tug & Lighter Co, the largest independent operator of tugboats in Shanghai. With the help of Hayim, a merger between GE Marden and Wheelock was completed in August 1932 with Bernard Firth (who bought Wheelock from the Wheelock family in 1920) as chairman of the combined entity, Marden as vice chairman and Song, Hayim and Arnhold as directors. However, Firth died suddenly within months at the age of 53, leaving Marden and Song in full control of Wheelock & Co. [ii]

It did not take long for Marden and Song to expand into yet another line of business. Attracted by the profit margin in the scrap metal business, they set up China Ship Breakers Ltd in 1933 with 50,000 silver taels and acquired 40 mows (7 acres) of land beside the upper Huangpu river as the shipbreaking site and purchased the SS Hanyang from Butterfield & Swire as the first ship to break.

At first business was difficult as they were overcharged by contractors but soon China Ship Breakers was doing well thanks to salvage work and in 1938 a rolling steel mill was launched under the name of Metal Industries of China with $10 million in authorized capital with both of these operations being managed by Song.[iii]

By this time, Marden was not only buying ships locally but also internationally from the US and UK governments and also obtaining ships not just for breaking but for operations (under Eastern Asia Navigation Co or Wheelock as a fleet of vessels with “lock” in its names) or for resale to foreign parties such as Miyachi KK of Kobe Japan which became a major business partner. A number of these vessels were registered in V.K. Song’s name such as a vessel in Tsingtao by the name of Fung Ho (subsequently seized by the Japanese and renamed Hizan Maru before it was sunk in 1943).

By the end of 1941 when the Pacific War broke out, Wheelock was making $20 million in profits annually with $15 million in the bank and subsidiaries including the firms mentioned above plus Yangtze Finance (扬子银公司, founded in 1930), James Magill & Co which operated the Whangpoo Tug & Lighter Co (founded in 1928), HK Realty & Trust, Cornes & Co and Oriental Mortgage & Finance (JV with HSBC and China Engineers).

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Left: Ellis Hayim (centre) with Sir Victor Sassoon (right) in Shanghai – two Jewish tycoons critical to the emergence of Wheelock Marden. (Source: JDC) Right: Scottish soldiers waiting for their baggage to be loaded onto Shanghai Household Removing lorries (Source: Luce Instituto)

When the Japanese occupied Shanghai, Marden and Hayim were interned along with other foreigners but fortunately both were sent back to the UK as part of a prisoner exchange program. In Marden’s absence, the Wheelock operations were managed by the Songs under the watch of the Japanese military and the brothers successfully preserved the firm’s assets for four years until the Mardens’ return.

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VK Song c1950’s Courtesy: Wendy Song

Unfortunately the war took its toll on V.K. Song, who suffered a nervous breakdown in 1946 and although he recovered his health would never be the same.

While Marden had underestimated the Japanese situation, he was quick to transfer his assets and base to Hong Kong before the Communist takeover in the mainland and the Songs moved to Hong Kong along with them. According to his obituary, the 60 year old V.K. was convinced by his wife to retire from Wheelock upon arrival in Hong Kong although Robin Hutcheon’s biography of George Marden – Shanghai Customs attributed V.K.’s departure from Wheelock to a fallout with Marden, stating that V.K. “disagreed with the management policy” of Marden and resigned from the board citing that “there was no further place for him at the company”. V.K. challenged the initial offer of $400,000 in retirement gratuity from Marden citing back wages owed during the war and after arbitration by the company’s auditor from Peat Marwick, he received an additional $250,000.

While the Songs were not directly involved in Wheelock & Co in Hong Kong (its acquisitions of Shewan Tomes, Lane Crawford, HK Gas etc), they remained close business partners of the Mardens with V.J. being hands on with a number of industrial ventures in partnership with them and V.K. as an investor in a number of companies despite having retired from day to day management.

Textiles (Textile Corporation of HK)

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Label of the Lyemun Brand spindle produced by Textile Corporation of Hong Kong; Factory site of Textile Corp (Source: HK Cotton Spinners Association)

There are no records of the Song brothers being directly involved in textiles in Shanghai but their business partner George Marden was involved with at least two textile concerns in pre-1949 Shanghai – New China Textile and Shanghai Worsted Mill, both in conjunction with China Engineers which was founded in 1928 by William Charles Gomersall, E.S. Elliston and James Hsiung Lee with backing from Marden.[iv]

In 1951, Marden invested in textile concerns in the UK affiliated with K.O. Boardman, formerly managing director of textile importer Harry Walton & Sons Ltd.

In 1953, one of the pioneering cotton spinning mills in Hong Kong, Shanghai Textiles Ltd (上海紗廠) was in financial stress. The firm was incorporated in 1949 by S.D. Kiang (江上達 1893-1966), a prominent textile industrialist from Changchow in Kiangsu province who had been living in Hong Kong since the end of the War. While many Shanghainese industrialists fled to HK as a result of the Communist takeover (or for CC Lee, the first Shanghainese to set up a spinning mill in HK, the inability to import machinery to the mainland due to the Civil War), Kiang had a different reason – as an active collaborator with the Japanese during WWII, he was wanted by the authorities in the mainland.

Ever the masters of M&A, Marden and Song seized the opportunity  and established The Textile Corporation of Hongkong Limited (會德豐紡織, which means “Wheelock Textile” in Chinese as the Chinese name of “HK Textile” was already taken by HK Spinners) with registered capital of HK$25 million on March 31, 1953 to take over the assets and operations of Shanghai Textiles which included its mill at 9 ½ mile Castle Peak Road for HK$3.5 million. George Marden served as the first chairman (after his retirement he was succeeded by Hutchison taipan Sir Douglas Clague) and Song its managing director. It also secured a loan of HK$2 million from HSBC after projecting net profits of HK$1 million after the re-organization. [v]

By the end of 1954, Textile Corp had 550 workers, 13,528 spindles and capacity of 408,000 which placed them 7th biggest out of the 13 mills. While it might not be one of the largest spinning mills in HK, it was the first one to go public as it became a publicly listed company on April 30, 1953 at 5 dollars a share. It also had one of the most prestigious boards, which included four of the top Cantonese business and political elites at the time – Sir Kenneth Fung Ping-fan of Bank of East Asia, Sir Chau Sik-nin, R. C. Lee of Lee Hysan Estate (now Hysan Development) and Kwok Lam-po of Wing On and two taipans of British hongs – Cedric Blaker of Gilman & Co and W.A. Stewart of Davie Boag. In 1955, the firm was one of the 13 founding members of the HK Cotton Spinners Association, and V.J. Song as representative of the firm on the board of the association was elected vice chairman in 1958, a position he held until his death a decade later.

As Song had little direct experience in textiles, he was assisted in the management of Textile Corp by K.F. Fan (范桂馥, 1902-1976), a long time veteran of the textile industry who founded Sheng Ho & Co, one of the largest cotton brokers in Republican era China in 1926. Other Chinese executives involved included James Lee from China Engineers who served as vice chairman of the firm at one point and also V.J.’s son in law C.K. Yuan.

By 1962, the firm remained a mid-size player, ranking 12th out of the 28 spinning mills in HK with 19,928 spindles, monthly production of 700,000 lbs and 688 workers. To put it into perspective, the big five firms (Nanfung, Textile Alliance, HK Spinners, South Sea and Wyler) all had over 40,000 spindles, produced 1.5 million pounds and had over 1,000 workers. At the time Textile Corp also had a weaving operation with 440 looms installed employing 276 workers and capacity of 1.45 million yards per month. [vi]

In 1965, Song formed Spartan Knitters (茂源織造) as a subsidiary of Textile Corp and installed his third son F.T. Song as manager. Business continued to prosper during the turbulent decade of the 1960s as profits of Textile Corp jumped from HK$578,381 in 1966 to HK$1,130,375 in 1967 and HK$2,124,488 in 1968, the year of V.J.’s death. [vii]

Flashlights (V.K. Song & Co, later Sonca)

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1963 Advert Courtesy: IDJ

In 1953, around the same time V.J. Song became involved with the formation of Textile Corporation, he was also looking to start an industrial venture. He came into contact with Sze-Yuen Chung (鍾士元,1917-), who had just started an engineering consulting business to help investors start factories. Having returned to HK after earning his doctorate in engineering from the University of Sheffield in the UK two years before, Chung had recently been the Chief Engineer and Deputy General Manager of World Light Manufactory (光宇製造廠), a maker of hurricane lamps owned by the Lai family. Chung had developed some process for making battery operated electric flashlights (or as the British call them – “torches”) that piqued the interest of V.K. Some of these processes were patented under VK and Chung’s names in 1954 and 1955.

In December 1953, V.K. incorporated V.K. Song & Co (宋氏公司, hereafter refer to as VKSC) to manufacture flashlights in a new factory in To Kwa Wan using Chung’s process and modern, semi-automated machinery and Chung was given a minority stake as the manager and technical consultant. VKSC was by no means the first flashlight manufacturer in Hong Kong (that honor would go to Ling Nam Hardware founded by Chan Ting Yu as mentioned in another article in the group) but it very quickly became the biggest through its relationship with Eveready, the well-known American flashlight and batteries manufacturer, although VKSC also manufactured a lower end line of flashlight under its own Veekay brand.

Eveready was founded by Conrad Hubert, an American entrepreneur of Russian descent who acquired the patents of David Misell, the British inventor who invented the flashlight in 1897, ten years after the invention of the dry battery. The firm became part of National Carbon in 1914 which in turn was acquired by Union Carbide in 1917. VKSC was not the first HK firm to supply to Eveready as Nam Jam Factory (南針製造廠), which was founded in Sham Shui Po by F.S. Chiu (招福申) in 1928 had been making flashlights for Eveready since the 1930s. After the War, demand for many goods including flashlighst in the US soared and VKSC’s were popular thanks to its low cost, reliability and high style.

In 1956, Eveready offered to invest in VKSC. According to Chung, Song “had his doubts, afraid the Americans would eventually take over his beloved enterprise” but “eventually relented and sold his entire stake in the firm to the Americans”. One of the terms of the acquisition was Chung staying on as general manager and also discontinuing his consulting business which was involved in three other factories at the time.

Under Chung’s management and Eveready’s ownership, the business continued to grow and by September 1958 when Governor Robert Black and the Commerce Secretary visited VKSC, its monthly production was 400,000 flashlights and 700,000 flashlight bulbs manufactured by 150 male workers and 300 female workers. [viii]

The same year, Eveready ended its decades-long relationship with Nam Jam and since Eveready represented a significant portion of Nam Jam’s business, Nam Jam had no choice but to shut down its factory in Sham Shui Po, which was re-developed into the Golden Theatre and later Golden Building, home of the famous Golden Computer Arcade.

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Left: Governor Sir Robert Black visiting the V.K. Song & Co factory in 1958 and greeted by Chung Sze-yuan (Source: Wah Kiu Yat Po, 1958-9-18)  Right: the Sonca complex in Sun Po Kong  

In 1963, the firm was re-named Sonca Industries (崇佳實業) and opened up a new 10 storey factory/office complex on a 30000 square feet site in Sun Po Kong. Chung became the Executive Chairman of the Board whilst a returned engineer who received his chemical engineering degree from the University of Michigan in the U.S. in 1951, Chan Tou-suen (陳道宣, son of Siemssen & Co comprador Chan Haupo and father in law of former Justice Secretary Wong Yan-lung), succeeded him as the Managing Director.

By 1964, FEER described Sonca as not only “the largest torch manufacturer in Hong Kong accounting for 25-30% of the HK’s torch output” but operating the largest torch factory in the world. At its peak in the 1970s, Sonca employed over 5000 workers and exported its products to over 100 countries around the world. As the success of Sonca caught the government’s attention, Chung became more and more involved in politics and today he is better known as the grand doyen of Hong Kong politics rather than a pioneering industrialist. [ix]

 

Metals and Shipbreaking (Metal Industries Corp, HK Rolling Mills and Fuji Marden)

As mentioned in the first section, the Songs were involved in metals and shipbreaking in pre-war Shanghai with the Mardens via China Ship-Breakers and Metal Industries of China. In post-War Hong Kong, this business opportunity arose again as many naval forces across the globe were disposing of their excess fleet after the War while global reconstruction created a huge demand for scrap metals.

The two firms changed their registration to HK in 1946 and in 1954, they changed the name of Metal Industries of China Ltd to Metal Industries Corporation Ltd (鋼業有限公司). The next year (1955), they set up Hong Kong Rolling Mills (會德豐鋼鐵, “Wheelock Metals” in Chinese) as an affiliate of Metal Industries and started buying vessels from around the globe to break them up for scrap metal. Joining them in running this operation was another old partner from Shanghai – the Chuang family.

As the Song brothers and Marden operated a decent number of vessels in Shanghai, they had a high level of demand for ship repairs and through this they came across Hung Ziang Shing Shipyard (鴻翔興機器船廠), a small operation founded in 1924 by a former carpenter from Fenghua (a prefecture of Ningbo, the ancestral home of Chiang Kai-shek) named Chuang Tao-chueh (莊道覺) in Pudong. Initially Hung Ziang Shing primarily focused on servicing the vessels owned by the British American Tobacco Company but after the Songs and Mardens invested in his firm, they became exclusive to Wheelock Marden and the Shanghai Customs.

When the Japanese attacked Shanghai in August 1937, they occupied and badly damaged the shipyard and after they retreated, the Chuangs employed a British engineer by the name of J.E. Harvey to build a bigger shipyard in Lujiazhu in Pudong with 5 slips and 20 machines. [x] T.C. Chuang’s two sons Tze-Yuen Chuang (莊志宸, 1893-1981) and Tze-Kong Chuang (莊志剛, 1897-1979) who studied engineering and marine carpentry were involved with the business early on and by 1949 they were running the show with TY moving down to HK and TK staying in Shanghai. In Shanghai, Hung Ziang Shing was forced to merge with 28 smaller shipyards in 1955 and became the state-owned Lixin Shipyard (立新船廠)in 1966 while in Hong Kong, TY and his sons Quincy K.L. Chuang (莊貴侖) and David M.L. Chuang (莊文侖) worked closely with V.J. Song and the Mardens to build a bigger fortune with Metal Industries and HK Rolling Mills.

Their first purchases were from the Royal Australian Navy – HMAS Latrobe and HMAS Bowen in 1956 and HMAS Katoomba and HMAS Parkes in 1957. In 1959, they broke a number of local commercial vessels –  the 1919 steamer “Rowena” and 1935 cargo ship “Eleanor”, both of which were owned by Wheelock Marden and Shenking, which was owned by Hui Oi-Chow. Their highest profile purchase came in 1960 when it bought cargo ship Serpens from the US Navy, it also bought seven WWII aircraft carriers together with Dah Chong Hong and Shun Fung Iron Works for US$200,000 apiece. As these vessels had cost $20-25 million to build apiece, this caused quite a controversy in the US. In the 1960s, they bought Blue Star Line’s Seattle Star in 1961, the oil tanker Esso Singapore (formerly Stanvac Singapore) from Standard Oil in 1965 and also acquired HMNZS Rotoiti in 1966 and HMNZS Hawea in 1965 from the Royal New Zealand Navy.

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Article about the Fuji Marden reception at the Mandarin Hotel in 1964 with almost 600 guests. Right to left: John Marden (George’s son who took over in 1959), CEO of Fuji Iron Works, John’s wife Anne and wife of Fuji CEO. (Source: Wah Kiu Yat Po, 1964-9-9)

The post war emergence of industrial Japan created high demand for scrap metal in Japan and not only did Marden resume his business with its pre-war trading partner Miyachi KK, in 1960, it formed Fuji Marden (富茂有限公司) with Fuji Iron Works which by 1963 was the largest producer of iron bars in HK with 25,000 tons per year of production. It also operated a shipbreaking yard where majority of its scrap output went to the local mill for production but also shipped some to Japan.  Some of the US naval vessels acquired by Fuji Marden included USNS Coastal Sentry (1968), USNS Short Splice (1973) and USS Suamico (1975). By the 1970s, shipping was more lucrative than shipbreaking and the families shifted their focus accordingly. In 1972, Metal Industries Corp (which by then was a listed company) was renamed Wheelock Maritime International Ltd. The next year, the Chuang family listed Goodwin Marine & Industries (保榮航企) on the stock exchange. HK Rolling Mills was dissolved in 1992 and eventually the Fuji Marden partnership also dissolved with the Chuang family taking over the firm, keeping its Chinese name but changing its English name to Fu Mow & Co Ltd in 1985.

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Quincy Chuang (Source: Fenghua Government website)

In 1981, T.Y. Chuang passed away [xi] and his son Quincy Chuang, who had served as the president of the exclusive HK art collectors organization Min Chiu Society and director of the Tung Wah Group of Hospitals in 1971, is best known today as an art collector and benefactor. In 1996, the Chuang family purchased 79 pieces of Ming and Ching Dynasty furniture from the renowned collector Wang Shixiang for US$1 million (one tenth of market value) and donated them to the Shanghai Museum which formed the core of the museum’s antique Chinese furniture collection today. [xii]

 

Toys (HK Industrial)

V.K Song was well connected in the Shanghainese business community in Hong Kong and within this small circle, he became acquainted with Te-Sing Loh (陸德馨, hereafter refer to as “T.S. Loh”), a charismatic executive who as managing director of H.C. Ting’s Kader Industrial (開達實業) was a well-respected pioneer in the HK toy industry.  As Ting was grooming his own sons to take over Kader, Loh decided to strike out on his own and with the backing of the Song brothers, he took over an existing factory located on Smithfield Street in Western district owned by an Indonesian Chinese and formed Hong Kong Industrial (HKI).

One of HKI’s first products was a plastic water gun, and the success of the gun enabled HKI to expand rapidly within a few years. By 1959, it had six plants scattered across different locations in Queen’s Road West, West Point and Aberdeen and the Songs also invited the Mardens into HKI as investors and as a result, Metal Industries which both Marden and Song had an interest in became 70 percent owner of HKI while Loh kept the remaining 30 percent.

In 1962, all 6 plants were consolidated and moved to 41A Smithfield Road with the firm employing around 2,000 people at this time. With fresh capital, Loh upgraded HKI’s machinery and capabilities and this investment in new technology enabled the firm to move beyond its early focus on making unbranded generic toys for the open market into the more profitable business of making more sophisticated toys under contract to overseas toy companies. Amongst his key foreign clients at the time were two British firms – Lines Bros, once the world’s largest toy maker and Meccano Ltd, known for its Dinky Toys die-cast miniature model cars and trucks. But it was the Americans whose emergence as the dominant force in the global toy industry that propelled HKI to new heights. In 1963, Metal Industries formed a joint venture with American toy maker Knickerbocker Toys (ran by Leo White at the time) called Knickerbocker Industrial to manufacture toys exclusively for Knickerbocker. Metal Industries and Knickerbocker each owned 45 percent of the venture while Loh controlled the remaining 10 percent.[xiii]

Then even bigger American clients came in the form of Hasbro, who launched the highly successful GI Joe in 1964 (US$23 million in sales by the second year) and Mattel, which rode the success of its Barbie dolls to US$100 million in sales and a place in the Fortune 500 in 1965, within 6 years of the doll’s launch. By 1966, HKI was churning out 250,000 GI Joe action figures and the next year more than ten times that figure at 3 million pieces.

In the meantime, Mattel also could not keep up with demand and in an effort to secure production capacity from HKI, Mattel founder Ruth Handler (1916-2002) came to HK and offered to buy HKI from the Mardens and Lohin 1966. A deal was struck where a new company by the name of Mattel Marden was formed to acquire HKI and Precision Moulds Ltd for US$3.5 mil with Mattel holding 70 percent, the Mardens 27 percent and Loh holding the remaining 3 percent and continued to run the show as managing director.[xiv] The new firm focused exclusively on making toys for Mattel so the GI Joe business was transferred to Perfekta and Cheung Kong. Mattel sent over Bob Modini and Karl Wojahn to oversee engineering and quality control.[xv]

In 1968, Mattel launched the highly successful Hot Wheels to target the boys market and compete with Matchbox. By 1970, the Smithfield plant was producing 370,000 units of Hot Wheels per day and required a Wheelock property in Quarry Bay to be converted into a new plant which could house 1200 staff to make 16 million Hot Wheels per month.

Unfortunately within 3 months of operations at the new plant, the sales of Hot Wheels suddenly slipped in late 1970 and monthly production at HKI dropped to 1 million units. Loh decided to leave and sell his stake to Mattel and under new management in 1972, the Quarry Bay plant was closed.

Mattel was also struggling at the parent company level as it had expanded too rapidly (e.g. the acquisition of Ringling Brothers circus) and struggled with skyrocketing material costs during the Oil Crisis, intense competition and an accounting scandal (which resulted in the exit of Ruth Handler).

In May 1980, Mattel acquired Wheelock’s remaining stake at HKI and HKI became a wholly owned subsidiary of Mattel. In May 1982, the Smithfield site was re-developed and operations was relocated to a 160,000 feet, 5 storey tall new factory in Shaukiwan with the firm renamed Mattel Toys (HK) Limited.

After HKI, TS Loh started another toy venture called Marigold with the Mardens. Although this failed, his contributions to the HK toy industry remained significant and many of his former employees went on to build or run large companies in the industry. [xvi]

Kowloon Wharf and the End

In the mid-1950s, one specific firm in a familiar industry, the British controlled Kowloon Wharf, caught the attention of the Song brothers.

The firm was losing money in the early 1950s due to the Korean War embargo but as the Songs were investors in various industrial enterprises that were growing quickly thanks to exports, they realized first hand that shipping was due to recover and passenger traffic was also poised to skyrocket as American ocean liners such as American President Lines were already demanding larger wharf facilities from the HK government and the Wharf Company.

He also realized that the firm was sitting on very valuable waterfront properties that could be worth many times more if re-developed. By 1957, V.K. had accumulated enough shares in Kowloon Wharf, to a point where his share ownership reached 16.7 percent, which exceeded the explicit rule written in the firm’s articles of incorporation that stipulated that no single shareholder should control over 10 percent of its outstanding shares. This led to an intense behind the scene negotiation between Song and the firm’s board led by its chairman Hugh Barton (Jardine taipan) and a compromise was reached with V.K. joining the board of Kowloon Wharf on 1957 and in return he promised not to further increase his holdings in Kowloon Wharf shares. [xvii]   Song’s obituary had a different version of the story, saying that Kowloon Wharf invited him to join its board due to his reputation as a savvy businessman.

Sadly V.K.’s tenure on the Kowloon Wharf board did not last long as he soon fell ill and on October 25, 1960, he died of a heart attack at St Teresa’s Hospital in Kowloon at the age of 72. Both of his sons – Peter (Pei-te, ) and C.T. (宋仲德, 1931-) – were in the United States at the time of his death and flew back for his funeral at the Kowloon Funeral Parlor, which was well attended by the Chinese and Western elites in the colony at the time.

V.J. had taken over V.K.’s spot on the Kowloon Wharf board several months before he died and continued to push for further development of its properties. When the parcel (KML 91) next to Star House became available in 1963, V.J. led a group of investors which included Q.W. Lee, Paul Y. Tso and his nephew’s father in law S.S. Wong to bid for it but ultimately the company decided to develop the site into the Hong Kong Hotel through Harbor Centre Development, a joint venture with HK Land, Hui Sai-fun and Chung Ming-fai. One of the major property projects that came to fruition was the Ocean Terminal which opened in 1966.

V.K.’s son CT who graduated from MIT and worked at American Engineering Corporation (Carrier’s agent in HK) where he worked on Queen Elizabeth Hospital before joining Kowloon Wharf served on the building committee of the landmark building.[xviii]

Tragedy struck in February 16, 1968 when V.J. Song was in Taiwan for leisure with two of his friends, shipping broker Yao Shu-min (姚書敏) and chemical magnate Yu Shao-sing (虞兆興) and their CAT flight crashed. V.J. died alongside Nancy Kwok of Wing On and others but his two friends miraculously survived.

At the time of his death, V.J. was director of six Marden-related entities including HK Realty, HK Rope Manufacturing, HK Rolling Mills, Textile Corp, Metal Industries Corp and Sparta in addition to Wharf.[xix] He was survived by three sons and three daughters. His eldest son W.T. Song (宋惠德) had his own stock brokerage on the then very exclusive HK Stock Exchange and succeeded his father as director of HK Rolling Mills. His second son stayed in the US while his youngest son F.T. ran Sparta Knitters which eventually became part of Winsor Industrial. V.J.’s son in law Yuan Chung-kai (袁忠愷), who was assistant manager of Textile Corp succeeded him as manager of textile concern. By the late 1960s, rising wages had become an issue in Hong Kong. After two years of discussion, Yuan and Chen convinced the management to invest in new machines which targeted the higher end market.

Business was challenging in the 1970s and in 1978, the firm’s managing director Eric Liang-chun Chen (陳良絅) led a management buyout and on New Year’s Day 1980, the Textile Corp mill on Castle Peak was shut down for re-development, following the same fate as many of its spinning mill peers. [xx]

As for VK’s branch of the family, CT remained on the Kowloon Wharf board after his uncle’s death. In 1974, CT, whose wife is the niece of the shipping magnate CY Tung, decided to leave HK for North America and resigned from the board of Kowloon Wharf. In recent years he has returned to Hong Kong where he founded Aquaponic Association of Asia Pacific to promote aquaponics in the region. His brother Peter who graduated from HKU, London U and UC Berkeley with engineering degrees married the daughter of Dah Sing Bank chairman S.S. Wong in 1959 and was involved in real estate development in Hawaii. [xxi]

As for Wheelock and Wharf, both companies ended up in the hands of Y.K. Pao in the 1980s, who earlier in his career in Shanghai had been snubbed by George Marden.

This article was first posted on 14th November 2016.

References:

[i] Universal Dictionary of Foreign Business in Modern China, 1995, Szechuan People’s Press
[ii] Hutcheon, Robin, Shanghai Customs, Galisea Publication, 2000
[iii] The Far Eastern Review: Engineering, Finance, Commerce, Volume 34, 1938
[iv] Nishida, Judith Mary (1990): The Japanese influence on the Shanghainese textile industry and implications for Hong Kong. Non Published Doctoral Thesis in Hong Kong University. URL: http://hub.hku.hk/handle/10722/32354
[v] Kung Sheung Evening News, 1953-5-4
[vi] HK Cotton Spinners Association, 1962
[vii] HK Stock Exchange Yearbook 1968
[viii] Kung Sheung Daily News and Wah Kiu Yat Po, 1958-9-18
[ix]香港回歸歷程: 鍾士元回憶錄, Chinese University Press, 2001
[x] http://www.shtong.gov.cn/node2/node2245/node67421/node67431/node67464/userobject1ai64437.html; 前鴻翔兴机器船厂資本家 65 岁庄志訪問記录, 1961 年 11 月 22 ; Chuang family bequest of fine Ming and Qing furniture in the Shanghai Museum,  雨木出版社, 1998
[xi]華僑日報, 1981-02-26
[xii] http://www.fh.gov.cn/smpd/sm_bxgs/201502/t20150216_147053.html
[xiii] “Toys Concerns Get Hong Kong Branch” NEW YORK TIMES, 1963-3-14
[xiv]華僑日報, 1966-08-23
[xv] Monks,Sarah,Toy Town: How a Hong Kong Industry Played a Global Game (Hong Kong:Toys Manufacturers’Association of Hong Kong,2010)
[xvi]華僑日報, 1982-05-16
[xvii] Robin Hutcheon, Wharf: the First Hundred Years.  Wharf Holdings, 1986
[xviii] http://www.betterhongkong.com/member.php?pid=110
[xix] Wah Kiu Yat Po, 1968-2-23
[xx] 大公報, 1980-01-06
[xxi]華僑日報, 1959-08-02

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