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Esquel cottons on to opportunity in desert

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IN 1995, the Esquel Group, like thousands of other Hong Kong companies, operated a textile mill not too far across the border in Gaoming, a city on the western fringe of the Pearl River Delta.

Just seven years later the privately held firm, with annual revenues of US$500 million and a 44,000-strong global workforce, has established itself as the largest foreign investor in China's far northwestern territory of Xinjiang, where it has committed more than US$100 million to a range of projects.

Esquel's unlikely leap from the delta to the desert occurred well before it became fashionable for Hong Kong companies to even talk about investing inland. That fad reached a fever pitch last year, when a gaggle of Hong Kong government officials and tycoons feigned fealty to Beijing's 'Develop the West' campaign by taking part in a Beijing-sponsored tour of northwest China.

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So what is Esquel up to? And is its corporate strategy a sensible one that other Hong Kong manufacturers in the delta may one day wish to emulate? The first question is easy enough to answer.

As for the second, only time will tell.

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Necessity, as everyone knows, is the mother of invention. It is also the parent of many a migration, both human and corporate.

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