The Lee Rubber

Company:
A Case Study of
A Singapore-Based Chinese-Owned
Transnational Corporation

March 2014

Case Contents

I.

Case Facts

II.

Time Context

III.

Viewpoint

IV.

Major Policy Statement

V.

Current Operational Plans

VI.

Statement of the Problem

VII.

Statement of Objectives

VIII. SWOT Analysis

IX.

Alternative Courses of Action

X.

Analysis of Alternatives

XI.

Decision Statement

XII.

Implementation Program

XIII. Proposed Operational Plans

XIV. Other Problems and Recommendations
XV.

Management Lessons Learned

A transnational corporation is a huge company that does business in

several countries. Many TNCs are much richer than entire countries in the
less developed world.
Examples of TNCs include:
- Nestl
- Unilever
- Cadbury-Schweppes
- BP-Amoco
I.

Case Facts
Lee Rubber Company (Pte) Ltd. is one of the few large rubber
companies incorporated in Asia.
The Lee Rubber Company Ltd was first incorporated in the
Straits Settlement on 9th December 1931 under the Ordinance No.
155. Singapore was part of the Straits Settlement at this time of
incorporation.
Lee Rubber Company started its operations in 1928. Its
activities were stated in the Articles of Incorporation as rubber
planters and manufacturers, brokers, agents, merchants, importers,
exporters, and dealers in rubber and rubber goods and related
goods.
Nominal capital of the company was $500,000 consisting of
5,000 shares each worth $100 at the time of incorporation.
In 1932, the largest shareholder was Mr. Lee Kong Chian with
3,123 shares which represented 62% of the 5,000 shares taken up.
The nominal capital was further increase in 1953 to $10.1m
and in 1957, the nominal capital doubled.
Since its incorporation, the Company has expanded its nominal
capital by more than one hundred times while issued capital has
increased almost by eighty-one times.
Subsidiaries has been established namely: Lee Latex, Tropical
Produce, Lee Plantations, Kota Trading, Lian Hin Rubber, United Gee
Seng and Kallang Rubber which was established between 1947 and
1951. Lee Rubber (Selangor) was incorporated in 1962 in Malaysia.
Lee Plantations is primarily an estate management company.

All subsidiaries except for Lee Plantations are engaged in

rubber processing activities.

II.

Time Context
April 1977

III.

Viewpoint
Mr. Lee Kong Chian, director of Lee Rubber Company Ltd.

IV.

Major Policy Statement

Lee Rubber Company Ltd. is one of the few large rubber
companies incorporated in Asia which engaged in rubber
manufacturing and trading business. It aims to be one of
the leading rubber providers in the world.

V.

Current Operational Plans

Marketing
The sales department purchases processed rubber from the
factories at quoted prices or prevailing f.o:b. market prices
and sells it mainly to manufacturers in the automobile
industries.
The major markets are in the United States and Western
Europe.
Management

VI.

Statement of the Problem

How

VII.

Statement of Objectives
Long-Range Objectives
To

Short-Range Objectives
To

VIII. SWOT Analysis

STRENGTHS
WEAKNESSES
1. Known to be one of the
1. Dual channel between the
largest companies in the
manager and the directors of
rubber industry
the parent company and the
2. Largest exporter of rubber
headquarters
3. Loyal customers
2. One of the air polluters in the
4. Brand identity
world
OPPORTUNITIES
THREATS
1. Acquisitions
1. Potential entrants
2. Emerging
market
and
2. Stiff competition
3. Fluctuation of exchange rate
expansion abroad
4. Lower prices of substitutes
3. Innovation
5. Natural
calamities
and
4. More tie-ups into automobile
disasters
industry
IX.

Alternative Courses of Actions