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Focusing On The Future
Hong Kong Enterprise 40th Anniversary
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A trade magazine launched four decades ago that helped pave the way for a hong kong business boom will continue to support local enterprises in meeting upcoming challenges
Ten frequent advertisers in Hong Kong Enterprise have markedly different strategies to meet the challenges of an increasingly competitive global environment.
For clear-packaging leader Hip Lik Packaging Products Fty Ltd, a key strategy is to advise, inform and even educate customers on how to distinguish between inferior and quality materials and products.
"Our competitors adopt a low-price, low-quality approach," says General Manager William Suen. "Buyers using cheap and inferior packaging may jeopardize their own marketing efforts with serious consequences for sales."
Hip Lik uses superior materials such as box-grade PVC - characterised by high clarity, strong impact resistance and anti-static and anti-scratch properties - as well as top-of-the-line PP and PET. "We are probably the only factory in Hong Kong and China that can achieve quality up to US and European standards," Mr Suen notes.
He stresses that the focus on quality has seen the company grow from a small factory with several workers at its 1969 establishment, to a 1,000-employee industry leader today.
"We are number one in the clear packaging league in Asia Pacific in terms of quantity," Mr Suen claims. "We have a first-class reputation in the US and Europe, and we fully intend to maintain our leadership position by moving with the times."
A HK$100m, 60,000-square-metre factory in Shenzhen on the Chinese mainland will boost production capacity. "It's five times bigger than our existing facility, and will be fully operational by year-end," Mr Suen reveals.
"A new, HK$20m, eight-colour Roland printing machine tailor-made for plastic box printing is in place," he adds, noting that trading up to the latest technology enables the firm to achieve such desirable effects as soft creases on boxes. "We have also invested HK$5m to set up a world-class ERP system for enhanced efficiency, and this system will go online by year-end."
Developing New Products
In the face of toughening competition and fluctuating material costs, Sunnex Products Ltd is putting a premium on product development, automation, market expansion and cost reduction.
"We are speeding up product development to keep pace with market trends," says Michael Yu, Director for the manufacturer of stainless steel catering and household items and plastic pallets.
To enrich its product mix, Sunnex has recently developed a wide range of porcelain tableware for the catering industry. "We believe this category will become one of our most important ranges in terms of turnover and profit," Mr Yu notes.
He adds the company is building an online ordering system. "It will enable customers to place orders and check their order status on our website, which will be a big help to them.
"Besides we are going to develop some new markets like India, Korea, Turkey and some Eastern European countries, and expand our Chinese mainland market," Mr Yu adds.
The company also plans to relocate some production processes currently performed at its higher-cost factory in Shenzhen to its lower-cost facility in Taishan.
He attributes Sunnex's success to a strong R&D team, high productivity, offering the right products at competitive prices, value-added services, solid relationships with customers and suppliers, aggressive marketing and constant market updates from its UK-based sister company.
Employing New Technology
Since 1998, lighting manufacturer Neo-Neon Holdings Ltd has pioneered LED technology to capitalise on this bright spot of the industry.
"We will continue to increase our LED packaging capacity, and have also commenced R&D on LED chip production by ourselves," Group Financial Controller Samuel Tong remarks. He adds that vertical integration has always been the company's strategy, enabling the group to be more efficient and competitive.
The world's number-one decorative lighting company is seeking to expand its product portfolio, including lighting products for illumination purposes.
"Our R&D department has achieved a breakthrough in high-brightness LEDs, enabling us to become the first Hong Kong company to launch LED i-panels as substitutes for fluorescent tubes," Mr Tong claims.
The company places great emphasis on R&D. "We have more than 250 R&D engineers, including many PhDs, one of them from Cambridge University," Mr Tong says.
Engaging in ODM as well as manufacturing under its Neo-Neon brand, Neo-Neon also runs retail outlets in Hong Kong and Zhongshan on the mainland. "Our retail operations aim to educate the general public about LEDs, and they also help to promote the company's image," Mr Tong explains.
Diversifying & Relocating
Kitchenware manufacturer Kinox Enterprises Ltd is combating copyright infringement through legal channels, considering moving its factory from expensive Guangdong Province, and looking at diversification into trading.
"We have to consider relocation of our manufacturing base to a more factory-friendly province, maybe somewhere in the west or further north, like Henan, Hebei and Sichuan," says Sales and Marketing Director Andy Sun.
He adds the company may also start trading kitchenware other than the pots and pans in which Kinox is strong. "We may add new products under our name that are manufactured by others."
Kinox will continue to draw on its long-established advantages and qualities to ensure continued success. "We will continue to innovate and have a sense of urgency," Mr Sun says. "We aim to design houseware products that would have both an Eastern and a Western appeal - products that are pleasant to look at, easy to use and practical."
He says Kinox will continue to capitalise on its image as a premium houseware maker and its brand awareness. "It is only with brand awareness and recognition that we can fetch better prices, which in turn enables us to maintain better quality by using more expensive materials."
Mr Sun identifies three leadership qualities as essential to success.
"First, the ability to develop trust between not just me and my customers, but also between me and my colleagues," he opines.
"Second, to treat others the way you would treat yourself and third to be in touch with the market and your customers so that your statements come across as convincing to the audience."
Offering A Broad Approach
For diamond manufacturer Wing Hang Diamond Co Ltd, the winning formula is a combination of new technology, strong management, expansion of supply sources and the ability to attract talent.
"We will continue to update our technology to achieve even faster, more accurate and efficient operations and higher yields," Sales and Production Director Alfred Pong insists.
"We are designing computer programs to speed up and enhance our operations, including pay roll and stock control operations."
Wing Hang is aware of a shortage of rough diamonds and professional staff in the market to cope with the increasing demand, fuelled by the rise of new markets such as the mainland and India, as well as growing markets like the Middle East and the US.
The company received a strong boost in 1994 when it was appointed one of The Diamond Trading Co Ltd's (DTC) Sightholders, which has enabled Wing Hang to get a stable supply of rough diamonds at source, hence greatly reducing production costs. "Apart from the DTC, we also buy diamond roughs from various countries in order to meet the ever-growing and diversified demands of clients," Mr Pong reveals.
"We run various incentive schemes to attract good staff, and our new factory will also provide a greener environment and even better recreational facilities," he adds.
Introducing Creative Solutions
Apparel supplier Kinway Garments Ltd believes creativity, reliability, and knowledge are among the keys to success in market competition.
"Creativity enables a company to catch up with trends, and a reliable company delivers goods on time," Managing Director M.Y. Ko explains. "A company should also possess knowledge, including knowledge of the market, its customers, trade and abilities."
Kinway Garments is tackling competition by paying attention to the kind of products sold. "Our major challenge is price competition from the Yangtze River Delta area and Southeast Asia," he says.
"We are developing more fashionable lingerie and swimwear lines that are more difficult for our competitors to make, and will also develop more quota-free items such as swimwear, jackets and seamless underwear."
Kinway Garments was founded by Mr Ko in 1956 to produce woven babywear, and the collection subsequently expanded to other categories including denimwear, jackets, knitwear, woven children's wear and footwear. In 2000, it switched gears and became a trading concern.
Facing competition from low-cost mainland manufacturers, rising operating costs in Guangdong Province and a potentially smaller customer base, electrical appliance manufacturer Motor Electric Mfg Co Ltd is turning to automation, product diversification and possible factory relocation.
"We invest a lot in automation to improve quality and reduce costs," says General Manager Philip Au, noting that investment in technology and equipment accounts for 5%-10% of turnover every year.
"We are also conducting a feasibility study on whether to move our factory from Guangdong to another province where labour is more abundant and less costly, with Guangxi Province being one option."
Mr Au acknowledges Motor Electric's customer base may shrink because of consolidation and merging of client companies, but a solution has been worked out. "We are trying to develop new product categories to expand our customer base," he reveals.
The company produces small electrical appliances and power transformers, as well as engaging in custom moulding and assembly, all on an OEM basis.
Mr Au stresses the firm aims to satisfy customers' needs at the lowest prices. "We achieve this through vertical integration - we produce the main components and handle the engineering work ourselves."
He believes the secret to success is to be open-minded: "It's only when you're not confined to the status quo that you can break through," Mr Au maintains.
"The most important thing is to inject new ideas into the company by bringing in new employees and encouraging staff to think independently."
Thinking Out Of The Box
Co-Rich Enterprises Ltd, a manufacturer of jewellery and cosmetics packaging items, is thinking "out of the box" to address the latest industry issues.
"Running a factory is a big challenge today," Director Michael Pan concedes, citing smaller orders, keen competition, customers' low-price expectations, labour shortages and rising wages in the Pearl River Delta (PRD).
The company has devised a new way of retaining workers while improving efficiency. "We have just introduced an incentive scheme: if there's no complaint about a batch of products three months after delivery, workers will receive cash rewards," he explains. "We hope this will improve quality and ensure products meet customer requirements."
For continued success, the company is counting on sincerity, quality and innovation. "Innovation can set us apart - we hope to achieve a breakthrough through innovation," Mr Pan says.
Co-Rich is also trying to create an atmosphere to encourage staff to come up with more new ideas. "We've added manpower to quality control to improve quality and we educate workers on quality every day," Mr Pan reveals. "Every month, we run a training session for sales staff on English and on how to answer enquiries."
Watchstrap manufacturer Hing Yip Watchstraps Mfg Ltd is wasting no time in moving upmarket in order to ride out continuing challenges, including labour shortages and rising wages in the PRD as well as increasing materials costs and competition.
"Looking ahead, we are moving towards the high-end - the use of high-end materials, higher-cost leather, new styles," says Director Yip Hug Mo.
He believes Hing Yip has to introduce novelty and variety, both in the kinds of leather used and styles. "For example, we try to buy cowhide that is special," Mr Yip says. "Therefore, we buy mostly from Italy where the leather has a better finish and colours."
Such upgrading needs to be supported by advanced technology, which will help reduce the rejection rate and thus wastage. "Our technological capabilities have been improving continuously," Mr Yip claims. "Watchstraps have short life cycles - we have to keep innovating."
The company puts a premium on team spirit. "Our salespeople hold regular meetings to discuss customer feedback and how best we can improve," Mr Yip explains, adding that the sales team also visits the factory for meetings and social gatherings. "These activities are conducive to team building."
Hing Yip also realises the importance of customer service. "We guarantee that if there is any problem with the products we deliver, we will solve the problem for them," Mr Yip insists. "We also visit our customers regularly to keep abreast of their needs."
Controlling Quality
Paper product manufacturer Advance Label Ltd is seeking constant enhancement in quality control and customer service to meet the new exigencies of the changing market.
"Customers have ever-higher requirements of a product, such as quality, results of lab tests and the ink used," Manager Marjorie Ng observes.
"So we are careful in choosing raw materials suppliers and pay attention to their in-house quality assurance, ensuring all materials we use meet the required standards," she claims, adding that Advance Label has increased resources allocated to quality control and quality assurance by 30% from 2006 to 2007. "We listen to our customers, and give them advice on how best to meet their needs."
Sophisticated printing facilities and skilful professionals have ensured high productivity for the 40-year-old company, which continues to invest in R&D and human resources. Advance Label also operates an ERP system, which is being continuously improved.
"We endeavour to retain our leading position through sustained investment in R&D," Ms Ng says. "We believe every professional is a valuable asset and regular training is conducted to upgrade their skills."
Looking Ahead
These various successful enterprises represent the spirit of Hong Kong, which has grown from small beginnings into international entities that are recognised as global leaders in their respective fields.
Like countless other Hong Kong small- and medium-sized enterprises, they have benefited immensely from the Hong Kong Trade Development Council's (TDC) ongoing commitment to trade development via its integrated blend of trade magazines, trade fairs and online sourcing portals.
The TDC has evolved with the times over the past 40 years, with Hong Kong Enterprise spearheading the launch of an extensive range of TDC tools that have proved invaluable for buyers and suppliers alike.
These include some 14 trade publications, the www.tdctrade.com sourcing website and a slew of trade fairs with a customized on-site sourcing service - known collectively as the Integrated Marketplace - that support local enterprises and overseas buyers.
The TDC and Hong Kong Enterprise are proud to have helped Hong Kong grow and develop over the past 40 years, and will continue to focus on the future by developing equally successful trade development initiatives in the exciting and challenging decades to come.
MAJOR MILESTONES
The ongoing success of Hong Kong Enterprise has led to the equally successful introduction of a number of publications and services that have proved essential business and sourcing tools for suppliers and buyers.
| Hong Kong Enterprise | 1967 |
| Hong Kong Toys | 1969 |
| Hong Kong Apparel | 1969 |
| Hong Kong Watches & Clocks | 1983 |
| Hong Kong Household | 1983 |
| Hong Kong Electronics | 1985 |
| Hong Kong Jewellery Collection | 1985 |
| Hong Kong Gifts, Premiums & Stationery | 1988 |
| Hong Kong Optical | 1992 |
| Hong Kong Leather Goods & Bags | 1993 |
| Hong Kong Fabrics & Accessories | 1995 |
| Hong Kong Electronic Components & Parts | 1996 |
| Hong Kong Packaging | 1996 |
| Hong Kong Footwear | 1997 |
| World Enterprise | 2007 |
| TDC's online sourcing platform | 1996 |
| TDC's customised on-site tdctrade.com sourcing service | 2007 |
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