• Thu
  • Sep 18, 2014
  • Updated: 6:05pm
BusinessCompanies
MONDAY FACE

Electronics king's crown jewel

Nam Tai chairman stands to make a fortune from his factory site in Shenzhen, thanks to the city government's rezoning project for Qianhai

PUBLISHED : Monday, 02 September, 2013, 12:00am
UPDATED : Monday, 02 September, 2013, 4:28am

Nam Tai Electronics chairman Koo Ming-kown, nicknamed the "electronics king", earned his first pot of gold by selling calculators before moving on to the assembly of high-end electronic components for original equipment manufacturer customers.

His company now stands to make an unexpected fortune from property.

Nam Tai, founded by Koo in 1975, plans to redevelop a plant close to Shenzhen's Qianhai special economic zone to take advantage of a rezoning project by the city government. The 52,600-square-metre factory site, bought by Koo's company in 1993 for 30 million yuan, will be turned into a complex offering more than 300,000 square metres of commercial, serviced-apartment and hotel space, with the project valued at nine billion yuan (HK$11.3 billion) to 12 billion yuan.

"This is a gift from heaven as we never dreamed of earning money from property but now we are forced to earn such a fortune," Koo said.

Koo, 69, said redeveloping the factory was not his idea, but a result of a Shenzhen government plan to turn areas close to Qianhai into commercial use to support the zone's development as a financial centre. The special economic zone was designated last year as a testing ground for the freer transfer of yuan.

Land prices in Qianhai and nearby have surged, with China Resources Land, the property flagship of China Resources (Holdings), paying 10.9 billion yuan last month for the third commercial site in the zone, making it Shenzhen's most expensive land.

Koo said the factory would be moved to other land the firm owned at Shenzhen's Guangming Hi-Tech Industrial Park.

It is not the first time Koo has benefited from economic reform on the mainland. He was among the first batch of Hong Kong industrialists to invest in the mainland - in Guangzhou - after 1979 and moved his factory to Shenzhen in 1986 to take advantage of cheap labour and land.

"It would have been impossible for Hong Kong to develop the manufacturing business as the land and labour costs were much higher than those on the mainland," he said. "When I first set up a factory on the mainland, the monthly salary of a mainland worker was about HK$500, compared with HK$3,000 for a Hong Kong worker at that time."

Koo, the son of a tailor, was born in Shanghai in 1944 and moved to Hong Kong with his family when he was three years old. He grew up and was educated in the city before going to university in Taiwan, graduating with a law degree from National Taiwan University in 1970.

Upon his return to Hong Kong, he could not get a job in the legal field. So he turned to business, setting up a trading company that imported calculators and other electronic products, acting as a sole agent wholesaler for several Taiwanese firms before expanding to imports from Japan and South Korea.

Calculator sales brought him his first HK$1 million. His strategy was simple - find a low-cost method to sell a high volume of calculators in a short time. He did that by teaming with a Chinese-language newspaper and selling calculators to readers who could buy them more cheaply by clipping a coupon from the paper.

"All electronic products develop new models quickly so we could not keep the stock for too long," he said. "We had to keep the cost down and could not price the products too high. This is a volume business where we sell a large volume of products quickly at a thin margin."

After the success of calculator sales in Hong Kong, Koo sold them on the mainland from 1979 in a partnership with a government enterprise, just a year after Beijing embarked on economic reforms that allowed the entry of foreign investors. He also expanded from sales to manufacturing by setting up a factory in Shenzhen in 1986.

The company now focuses on the manufacture of high-end liquid-crystal display modules for smartphones, computers, tablets and cars.

"The key to success in running a business is to always try to upgrade yourself to secure a profit margin," Koo said. "We could earn a good profit by selling calculators in the 1970s but not nowadays as there are many competitors and people can use their computers and mobile phones to replace the calculator.

"But we diversified ourselves a long time ago to produce high-end electronic components … this is how we can survive for more than three decades."

Koo said that while he enjoyed going out with friends, travelling, playing golf or racing horses he had no plans to retire.

He is also a philanthropist, having donated HK$100 million to Hong Kong Baptist University in 2004, the largest donation to the university at that time. He has also donated money on the mainland, in the United States and Canada, where he migrated with his family in the 1990s.

"I consider donating is something I should do to help others," Koo said. "It doesn't matter whether the donation amount is large or small. What is more important is whether the donor is donating the money with a sincere heart."

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

Login

SCMP.com Account

or