This family diaspora also serves an important business function. For with members settled in so many countries, speaking the local language and maintaining strong local contacts, the Chungs enjoy an access to critical market information and new business opportunities usually reserved for only the largest multinational corporations. As a result, the family has been able to diversify its product line intelligently, expand its markets, and prevent overreliance on any one business, customer, or supplier.
"There is a safety in being in so many countries," K.S. explains as he stands to end a lengthy interview. "Our assets are not our expertise or money, but the family members themselves. By keeping them in different places, we maintain maximum flexibility to do our trading, no matter what happens in any one place."
When he first arrived in Thailand, K. S. Chung was very much the entrepreneur on the run -- albeit one with a brood of 13 children to support back in Hong Kong. A picture-postcard nation of rice paddies, water lilies, and gold-domed temples, Thailand offered Chinese natives such as Chung a haven after World War II. Today, the Chinese account for roughly 10% of Thailand's nearly 50 million people, and as much as one-third of the population of Bangkok.
Although the political conditions in Thailand proved unthreatening, the business opportunities K.S. found there were meager. He had come hoping to replace China with Thailand as a source of foodstuffs and raw materials for his Japanese customers, but even with the addition of a small sideline operation importing American tobacco, K.S. could barely eke out a living. So desperate were things in those early days that he set up a little cookie shop downtown -- and to this day, his offspring refer to him jokingly as a cookie merchant.
Patience, however, is a traditional Confucian virtue, and one well suited to business. And after several years, K.S. saw an opportunity for expansion in his tobacco-importing sideline.
It seemed that for generations, the farmers of northeast Thailand had lived in grinding poverty. Depending almost totally on subsistence rice production, their incomes were only a fraction of those enjoyed by residents of the more prosperous cities, or even agricultural areas like the "golden triangle" that includes northwest Thailand, with its ideal conditions for growing opium. In the northeast, once the rice harvest was over, rural families would often pack up and trek to Bangkok, where the men would toil in odd jobs and women would sell themselves at the city's many brothels.
By the mid-1960s, economic despair in the high plateau had spawned political unrest. Poor farmers, backed by local Communists, had taken up arms and begun to challenge the military-controlled central government, in much the same way they had in neighboring Laos, Cambodia, and Vietnam. In response, officials in Bangkok looked for ways to improve the region's economy by heping farmers to diversify their crops. And the crop they focused on was tobacco -- an "Oriental" tobacco traditionally produced in Greece and Turkey that, when blended with American tobacco, produced a cigarette with a particularly pungent aroma.
K.S. got wind of the project through the government contacts he had carefully cultivated over the years, and when the first Thai tobacco became available, he found willing buyers in Taiwan. His success led him to suspect that there was a large potential market for the Thai leaf, if only enough of it could be grown. But the northeastern farmers were suspicious and rather set in their ways and, given the political situation in the region, government officials were reluctant to press their program much past the suggestion stage. K.S. spent years pleading with and cajoling the generals to be more aggressive about the tobacco initiative, lavishly entertaining them and their cronies. Still, nothing happened.
"Everyone thought he was crazy," recalls Karl Kunz, then a Peace Corps world-development worker in Thailand and now a top executive in the Chungs' Thailand operations. "Everyone rejected him. The word was that you'd never get large numbers of Thai farmers, who are very independent, to cooperate on anything like this."
But in 1969, persistence finally paid off. That year, K.S. convinced a tobacco processor from Oxford, N.C., one W.A. Adams Inc., to enter a joint venture, Adams International, to promote the growth of Oriental tobacco. Adams offered tremendous technical knowledge and the potential of large markets around the world. And with this American commitment, K.S. began to find that government officials were suddenly more interested in his project. When, in 1974, the giant Phillip Morris concern started buying the Thai Oriental leaf, business picked up even more, and in one year exports from Adams International jumped from 70 to 580 tons. Today, those exports stand at more than 3,000 tons, with revenues topping $8 million.
K.S.'s patience with officials was complemented by the patience with which he dealt with the northeastern farmers. Rather than simply buy their cooperation with cash, he insisted on developing a tobacco-growing culture in the region, providing education and on-site technical assistance along with seed, manuals, and tools. He realized his challenge was not simply to produce an annual crop, but to change agricultural habits developed over centuries.
"What K.S. did was think long term," says Kunz, who now heads up Chung's burgeoning computer operations in Bangkok. "He thought from the farmer's point of view, and in his time frame, and he was willing to put in the resources."
Today, there are more than 23,000 Thai farmers enrolled in Adams International's tobacco program. Where the seasonal rice crop might bring in a mere 3,000 Thai baht, an off-season tobacco crop can earn a small farmer nearly three times as much. Once improverished, many farmers in the northeast now enjoy unprecedented prosperity. And the success of the program has helped to reduce the specter of a peasant insurrection.
