Li & Fung

Well served by a change of game

PUBLISHED : Saturday, 25 June, 2011, 12:00am
UPDATED : Saturday, 25 June, 2011, 12:00am


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He may have been born in Canada and raised in Boston, but after 32 years here Bruce Rockowitz sees himself as a Hong Kong native.

Last month he was tapped to be president and chief executive officer of Li & Fung, the global trading concern. In hindsight, quips the 52-year-old, his purchase of an US$800 air ticket from Boston to Hong Kong in 1979 was the best investment he has ever made, his ticket to a career in supply-chain management. He also owns a 20-strong fitness and restaurant chain called Pure Group, which has outlets in Hong Kong, Singapore, Taiwan and New York.

Rockowitz got into the business in the early 1980s after meeting Allan Zeman, the businessman best-known as the father of entertainment precinct Lan Kwai Fong in Central. Zeman owned Colby International, a company that procured consumer goods such as apparel and accessories in low-cost markets in Asia and exported them mainly to the US.

Rockowitz became a co-owner of Colby, which by the time it merged with Li & Fung in 2000 had 1,000 staff. Controlled by the Fung family, and led by chairman Victor Fung Kwok-king and his brother and executive deputy chairman William Fung Kwok-lun, Hong Kong-listed Li & Fung is one of the city's biggest companies and last year earned revenue of HK$124.11 billion.

How did you get your start?

I came to Hong Kong in 1979 after the Hong Kong Country Club hired me to be a tennis pro ... So, I took a semester off for six months from college. When I came to Hong Kong, I had no money. But I quickly earned enough money to pay for food and rent, and a little luxury - an air-conditioner - for the hot and humid summer. At the club, I came across many successful people. And I wanted to build something and had a lot of ambition.

Is that where you met Allan Zeman?

I met Allan by chance in an ice-cream place in Repulse Bay. We had an ice-cream, and he said he was looking for somebody without any kind of experience, who was smart and willing to work hard. After thinking for a while, I said I was interested. At the time, I knew nothing and I had never been in the apparel business.

On the first day I got to his office, there were about 20 people and he was in South Korea for business. So I started the first two weeks without him, and learned everything from the ground up. I did every job - from being in a factory, helping to make a garment, getting it on the boat, placing orders, finding a new market. It was part of my daily work. Some factory owners asked me how old I was. I lied to them I was much older than I was at 20 years old then. I grew up with factories and customers.

When China opened its doors to foreign investors in 1979, what did you see in the Pearl River Delta?

We went into China in 1981. At the time, it was a mysterious country to everybody. Our customers were asking if there were any big factories there. So we put an advertisement in the South China Morning Post looking for a Chinese factory, and it was interesting to receive three replies.

We asked the three parties to come to our office and met them individually in one afternoon. I met the first party, which was two people. Then, I met the second party, which also was two people. When meeting the third party, which also involved two people, I realised one of them was the same person [as in each of the previous two meetings]. I was a bit slow in finding it out! The person had a connection with the government and we took him on to our team, finally. Our first factory was in Hunan, then we found more in [what was then known as] Canton.

Did you have any culture shock working with a business controlled by a Chinese family?

Allan was, and is still, very 'Chinese' indeed, and is sometimes more 'Chinese' than Victor [Fung]. A common thing between Allan and Victor is they believe in working hard. Victor and William [Fung] work hard even though they are wealthy. There isn't much culture shock, as we speak the same language on business.

But weren't there arguments with William in the early stage of the merger?

We never argue. At the beginning, it was like two people in a marriage that we got to know each other. I used to want to change William and Victor in the ways of doing things, and then they wanted to change me. Just like the past two years when we were creating the nine [divisional] presidents, I was pushing William more to my direction and he was pushing me to his. Then we agreed in the middle. This makes Li & Fung better.

Traditionally, Li & Fung sets its business targets in a three-year plan. How does that foster the company's growth?

The three-year plan is a discipline process, which sets goals, strategies and direction on how to meet the goals. It is like playing tennis. If you don't believe you can be No. 1, you won't be No. 10. From me and William down, we push to achieve greatness and push everyone to perform.

A key objective in our three-year plan is to have core operating profit doubled to US$1.5 billion by 2013.

Acquisitions have been a key strategy to help meet the group's three-year goals, and you announced five more this week. How do you successfully integrate new units?

We have a vetting process for deals and integration of newly acquired businesses. We will buy only companies that make strategic sense to our operations and at a price-earnings ratio of a single digit.

We will co-locate new operations within our existing ones. We offer [career-path] incentives to staff of the acquired entity to be part of an expanded team at Li & Fung. I am one of the examples, moving from Colby into Li & Fung. [One-third of the company's divisional presidents came from acquired businesses.] Another key is we make sure integration of each acquisition is done within 100 days.

You were appointed as Li & Fung's CEO last month after spending 10 years with the company. What is the long-term succession plan?

The next CEO is likely to be Spencer [Fung, the 37-year-old son of Victor Fung], who is one of the nine [divisional ] presidents we created recently. We sent him to London to take charge of operations in Europe.


Founded in 1906

240 offices and distribution centres worldwide

More than 15,000 international suppliers

About 27,000 employees

US$16 billion annual turnover