Adaptability ensures garment maker prospers in face of crisis
Henry Tan, chief executive of Luen Thai Holdings - this year's International Award winner - is relatively upbeat about his company's prospects.
Though the United States market is still the group's key export destination for garments, and he concedes that North America and Europe are not in the best shape, he thinks Luen Thai will be able to navigate such economic turbulence for the same reason it won the award - through the efforts of colleagues.
Luen Thai Holdings is a world-renowned apparel producer and international supply-chain-services provider having partnerships with global brands and retailers such as adidas, Esprit, Ralph Lauren and Targus. It manufactures its goods in China, Indonesia and the Philippines.
The company is listed on the Hong Kong Stock Exchange and last year, its sales revenue and overall gross profits were US$775 million and US$143.02 million, respectively.
Tan said Luen Thai weathered the global financial crisis through 'lean engineering' strategies, cost controls and downsizing through elimination of non-profitable accounts and non-performing facilities.
He believed the award gave both the company and its staff a 'deep sense of recognition from the community'. He applauded the hard work of his colleagues and said it was a reward for a job well done.
Tan has seen many changes over the years and he recalled the old days, when Hong Kong was an entry port for manufacturing and noted how many mainland manufacturing companies now seemed to be listed in Hong Kong. 'It's a sign of Hong Kong's ever-changing role in the supply chain and what it can offer the world,' he said.
He advised budding young entrepreneurs to seize all opportunities that came their way. 'The key is to identify opportunities and grab them,' he said. 'You don't get many breaks in life and when you do see a window open don't hesitate, go for it and work at it. Hong Kong's market economy is free for all to succeed and make use of their talents.'
Though he acknowledged the world was changing fast and that many locally based textile and garment manufacturers had closed, he was steadfast about Luen Thai's ability to compete and prosper owing to its adaptability.
'We are lucky because of our flexibility,' he said.
While lamenting that the World Trade Organisation quotas Hong Kong once enjoyed elapsed in 2004, Tan believes that 'any business able to continually improve itself and change operations and strategy based on market needs' will thrive.
He also thinks Chinese companies need to 'adapt faster than ever before' because labour costs on the mainland have risen quickly. Higher cotton prices and an appreciating yuan have also complicated textile and garment exports.
Reflecting on his own attributes as a leader and businessman, Tan said he thought his best quality was his honesty and openness with colleagues and business partners.
'Being open and honest in dealings with customers and suppliers is the single most important thing in conducting business,' he said.