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Eu Yan Sang CEO to step down, hand over to outsider
HAVING concluded a 10-year search for a successor, Eu Yan Sang International's chief executive Richard Eu will be handing over the reins to group chief operating officer Aaron Boey from October.
But retirement's not a word to be found in Mr Eu's vocabulary. The 70-year-old, who once described himself as "chief dreamer" of the traditional Chinese medicine giant, will remain involved in the business as non-executive chairman.
His cousin, Robert Eu, who was appointed executive director and chairman in 2011, will step down from the role of chairman and remain a board director. The group will also have a new chief financial officer come September, replacing Lam Chee Weng who left in end-May.
The shuffling at the top of Eu Yan Sang comes as the 138-year-old group, delisted from Singapore Exchange last year, embarks on its next phase of growth.
"The company's been able to grow to a certain size and it's time to pass on so that we can take the next leap as well," Mr Richard Eu, who represents the fourth generation of the family in the business, said in an interview with The Business Times.
With the firm now in a different phase, new skillsets are needed, he added. "Someone who comes from a bigger scale business and more of a multinational company background is more relevant for the next phase of growth."
Succession has been an issue on his mind for about 10 years, and now that the group has been privatised, with new shareholders in the form of UOB-backed fund Tower Capital and Temasek Holdings unit Blanca Investments, it has finally come to fruition.
It's the right time for him too, he said, having spent 28 years with the firm.
In the past decade, while Eu Yan Sang has expanded in size, growth has also slowed due to a lacklustre global economic climate. Still, the business has shown itself to be resilient, having survived various crises in the past two decades from the Asian financial crisis to Sars and the global financial crisis.
"Now it's a general period of uncertainty, slow growth and (volatile) geopolitics, but I think we can overcome (them)," said Mr Eu.
The group's topline in the financial year that just ended has been stable, though there was no huge growth, and the bottomline, without the impairment charges that the group took in the previous financial year, has been "commensurate", he added. Eu Yan Sang reported a net loss of S$13.5 million on revenue of S$338.2 million for the year ended June 30, 2016.
Asked to evaluate his time with the company, Mr Eu said the business has grown beyond his expectations; initially he had only a "modest goal" of achieving S$100 million in turnover.
The next target the group is aiming for is the S$500 million revenue mark. There are still many opportunities in the sector, he said. Besides an ageing population, millenials are also more concerned about health. The group needs to convert consumers to traditional Chinese medicine, as opposed to mainstream healthcare practices, and using Eu Yan Sang's products and services, he said.
As for its retail strategy, Eu Yan Sang plans to strengthen its "fledgling online presence". The demographics of its customers buying online versus offline are different, said Mr Eu, observing that there has been no cannibalisation effect between both channels.
He was, however, tight-lipped about the group's online strategy. "I think the beauty about online is that people are always for searching for information, so nowadays anything you want to know is at your fingertips. This is where the connection can be made. I won't go beyond that."
Reflecting on his time at the helm of the group, he conceded that it also made mistakes. Some ideas, such as a retail-cum-food and beverage store it launched in 2006, did not take off because they were ahead of their time.
Most crucially, ideas are only a minor factor of determining success, said Mr Eu. "Getting the right people is the major factor."
Looking for a successor has been tough, he said. The group tried different candidates but they did not work out for various reasons. But with the company of a bigger size now, it is easier to attract the right kind of candidates.
"If you're a S$100 million business, you may not attract talent of the same calibre as people who have been running billion-dollar businesses. But if you're a mid-sized company and you have a chance of getting to that size, then you can attract that kind of talent."
His successor, Mr Boey, joined Eu Yan Sang in March this year as chief operating officer. Before that, he was president of Asia Pacific for Levi Strauss & Co, and had also held senior marketing and general management roles in Asia Pacific Breweries and Philips Consumer Electronics.
Besides having a keen intellect, Mr Boey has been able to get on well with everyone in the company, said Mr Eu. While the next generation of the family is already in the business - Mr Eu's 32-year-old son takes care of the Hong Kong retail business and a 31-year-old niece is a product category manager - they are too young for the role.
Asked whether they will eventually take over the business, Mr Eu said: "Let's see how it works out. You can't guarantee (that). You want to make sure that they can do the job and it's not just because of their surname."
Meanwhile, he expects to remain "very involved" in the company, especially in providing "corporate memory", as well as his network of contacts.
"There's a lot of thought and discussion that went on in the past that led us to where we are today. Because of my length of time here, I carry that memory with me. Ideally I'd like to transmit it to the next CEO."
He also plans to be more active in the Eu Yan Sang Foundation and in new businesses and ideas.
Asked whether he plans to retire one day, he said: "I hate gardening . . . I've always had quite good work-life balance so I don't see myself doing a lot less in terms of the work side."