Douglas Clague built Hutchison into one of the largest trading houses in Hong Kong.
Establishment of John D Hutchison
John Duflon Hutchison (1855 – 1920) established John D Hutchison & Co, a Hong Kong trading house, in 1877.
Thomas Ernest Pearce (1883 – 1941) joined the firm in 1903, and acquired a controlling stake in 1917.
Philip Stanley Cassidy (1889 – 1971) entered into partnership with Pearce, his brother in law, from 1922.
Pearce was killed in action during the Battle of Hong Kong in 1941, and Cassidy became the chairman of the firm.
John Douglas “Duggie” Clague (1917 – 1981) was born in Bulawayo, Rhodesia (now Zimbabwe) and raised on the Isle of Man. He originally worked as a bank clerk.
Clague joined the British Army and was stationed in Hong Kong during the Second World War. He was captured when the Japanese invaded, and held in a prisoner of war camp. With three others, including John Pearce (1918 – 2017), the son of Thomas Pearce, he made a daring escape into China. There he joined, with Pearce, the British Army Aid Group, a MI9 unit assisting POWs to flee Japanese internment camps.
By the end of the war Clague was a Colonel honoured with a Military Cross and a CBE. He returned to Hong Kong in 1947 with a sterling reputation and an excellent network of acquaintances.
Presumably aided by an introduction from John Pearce, Clague was appointed deputy to P S Cassidy. At the time John D Hutchison & Co focused on importing and exporting, and was dwarfed by the Hong Kong trading houses of Jardine Matheson and Wheelock Marden.
Cassidy retired in 1952, and Clague became chairman of John D Hutchison. He would develop the company into a business with international scope.
Clague bought out a 50 percent stake in J D Hutchison owned by Wheelock Marden in 1963. He renamed the company Hutchison International, and embarked upon the acquisition trail.
A S Watson, with interests in soft drinks, was acquired in 1965. Other acquisitions included Davie Boag, a specialised trader, and Oriental Pacific Mills, a textiles business.
Hutchinson gained control of Hong Kong & Whampoa Dock Company, one of the largest companies in Hong Kong, in 1969. Clague found that amidst the cultural revolution in China and riots in Hong Kong, assets could be acquired at a relative discount.
Following the takeovers Clague confidently proclaimed in 1969 that Hutchison was now the largest trading house in Hong Kong. The Financial Times described Clague as “one of Hong Kong’s most remarkable entrepreneurs” in 1974. Clague boasted, “I am Hong Kong’s Rock of Gibraltar”.
The downfall of Clague, and the rise of Li Ka-shing
Hutchison encountered cash flow problems in 1975 due to heavy losses at an Indonesian subsidiary, high-risk financial speculations and overpayment of directors. It was rescued by the Hongkong and Shanghai Bank (HSBC), who acquired a one third stake in the company for £15 million. The bank lent the money on the condition that Clague would relinquish his executive responsibilities.
HSBC sold its stake to Li Ka-shing (born 1928) in 1979.
Clague died in 1981 following a battle with cancer.
Ka-shing brought professional management principles to Hutchinson, and expanded its operations into overseas markets.
Hutchison remains one of the largest companies in Hong Kong, and Clague deserves credit for having had faith in the Hong Kong economy and for establishing the strong foundations for Hutchinson which Ka-shing subsequently built upon.