The Property Man Who Paid a Foreign Government Board in Shares

A property man going into milk gave equity to the statutory board that controlled Australia's dairy exports, then bought it back before the decade was out — and sixty years later the company still buys Australian milk. He paid in shares for a way in, at the one moment shares are cheap, and stopped paying the moment he was in.

There's a five-bottle pack of Vitagen in the chiller of almost every supermarket I walk into. Grape, apple, orange, plain.

Here's what I didn't know until recently:

The company that makes it began as a joint venture. With an Australian statutory board.

And the Singaporean who set it up was in property.

His name is Thio Keng Poon. Born 1931. In 1960 he incorporated United Realty, a property investment holding company.

Then, in 1963, he entered a joint venture with the Australian Dairy Produce Board. To manufacture and market sweetened condensed milk in Singapore and Malaysia.

The company they formed was Malaysia Dairy Industries — MDI — incorporated in Singapore.

A Singapore judgment later called that joint venture "the root of the family fortune."

Think about the trade he made.

He knew property. He was getting into milk. So he started the company with a partner: the statutory board that controlled Australia's dairy exports.

Then, before the decade was out, the Australians had been bought out. MDI was owned wholly by members of his family.

The company's own history gives the next stretch.

1970: first in Singapore to manufacture evaporated milk. 1974: pasteurised products.

1977: Vitagen. On the company's telling, the first cultured milk drink in Malaysia. A factory in Petaling Jaya opened on 22 June that year to make cultured milk.

Condensed milk goes in a can. Vitagen goes in the chiller.

The joint venture had been for condensed milk. Vitagen came after the Australians had gone.

Then, on 19 April 1979, MDI went after Yakult.

An injunction, filed over the shape of the bottle.

Not what was inside it. The bottle.

He lost. The judge found the advertising was selling the name, not the shape. Yakult had registered that bottle in Japan in 1965.

He kept going anyway. The two sides carved the bottle up between them in 1993, and MDI was still arguing it in a European court in 2013.

A trade report in January 2019 called MDI by far Singapore's biggest dairy manufacturer. Marigold is MDI's. More than a reported 1.3 million litres of milk a month. Over 20 product lines. The milk sourced from Australia.

Here's what keeps coming back to me:

Most founders treat equity as the last thing to give up.

Thio gave it away first. And he did it at the one moment it costs almost nothing — before the company had made or sold a single tin.

Then he took it back before the decade was out.

MDI's milk comes from Australia.

The shareholding was temporary. The supply line wasn't. He paid in equity for a way in, and stopped paying the moment he was in.

What would you give a slice of your company to get into a room you can't otherwise enter?