'We are pleased to see many Hong Kong companies striving to raise the quality of products and develop international markets, which thus helps increase Hong Kong's exports,' he said.

The scheme received a record 317 submissions from companies competing for prizes in seven categories, compared with 262 entries last year. Consumer Product Design was the most popular category, attracting 157 entries.

The judging panel granted six companies Grand Awards, the top prize in the scheme, in different categories.

There was no Grand Award winner in the Technological Achievement category.

Professor Poon, president of Hong Kong Polytechnic University, said it was not the first time a Grand Award in a specific category had not been granted.

There was no Grand Award winner in the Environmental Performance category in 1996.

'That means we still have room for improvement. Although we have seven categories, it does not mean we are obliged to grant [a] Grand Award in all of them,' he said.

The judging panel was very careful and serious in its assessments, and found that the entries in the Technological Achievement category narrowly missed the Grand Award requirements, he said.

WowWee won the Consumer Product Design Grand Award for its Robosapien. KML Engineering pocketed the Grand Award in the Machinery and Equipment Design category, while ATAL Engineering was Productivity Grand Award winner.

The Quality Grand Award went to Automatic Manufacturing and the top prize in Environmental Performance was granted to Hong Kong and China Gas (Towngas). Knitted fabrics manufacturer Fountain Set (Holdings) received the Export Marketing Grand Award.

There were another 27 award winners, and 45 companies received Certificates of Merit in the seven categories.

Professor Poon said this was a satisfactory result, demonstrating Hong Kong companies' achievements particularly in innovation.

'As everybody knows, local companies have located their production facilities on the mainland. Hong Kong just plays a role mainly [in] design as well as research and development.'

Companies were committed to applying total quality management and many of them had already attached certifications that recognised high levels of management and operation process, such as ISO 9000, ISO 14000, QS 9000 and SA8000, he said.

The annual award scheme is designed to recognise and encourage operating excellence and to promote successful practices and strategies of industrial performance.

When the scheme was launched in 1989, awards were granted in only two categories.

This year there were seven categories.

Professor Poon said the scheme provided an incentive to local companies, securing winners industry recognition and good publicity.

To stay competitive in the global market, Hong Kong manufacturing companies are increasingly shifting their operations from original equipment manufacturing (OEM) to original design manufacturing (ODM).

OEM companies make products according to customers' requirements, while ODM manufacturers take a step further to offer designs to clients in order to increase market competitiveness.

'In the past, companies just took orders and produced. This is changing gradually, and local companies have been shifting toward ODM fairly quickly,' said Professor Poon.

'That's why Hong Kong products now are improving in various aspects.'

He said the shifting process involved additional efforts in research and development, innovation and marketing to satisfy market needs.

Seven companies and organisations won two prizes or more in this year's award scheme.

Ka Shui Manufactory secured an Environmental Performance Award and a Technological Achie-vement Award. Swissebauches walked away with a Productivity Award, a Quality Award and an Environmental Performance Certificate of Merit.

The other companies that won multiple honours were Daka Development, Hing Luen Hats Manufactory, the Hong Kong Productivity Council, Neonlite Electronic & Lighting (HK) and Philips Electronics Hong Kong.