Firms striving to meet environmental directives are starting to realise the benefits despite higher costs LOCAL ELECTRONICS companies are racing against time to adopt green production methods as the Europe Union implements laws against environmental hazards. How to comply with the EU directives has emerged as one of the hottest issues among local electronic and electrical (E&E) entrepreneurs. Europe, one of biggest export markets for Hong Kong's E&E industry, has launched a series of environmental directives since 2003, including Restriction on Hazardous Substances (RoHS), Waste Electrical and Electronic Equipment and Energy-using Products. These rules, most of which will come into force within the next two years, aim to compel electronics producers to limit the environmental impact of their products at all stages of production. 'There's no way to avoid them as long as you still want to get order sheets from Europe,' said John Chai, managing director of Fook Tin Technologies. Fook Tin, a leading weighing appliance producer, had opened its own subsidiary in Europe, which consumed 60 per cent of its products, he said. To meet the newly launched standards, Fook Tin set up a taskforce in the middle of last year consisting of top managers and engineers, as well as staff from purchasing and sales departments. 'It was very hard at the beginning, since we knew so little about the new rules,' he said, adding that the whole process had raised product costs by at least 5 per cent. The company conducted a series of tests to find out which product materials did not qualify. Then they asked the component suppliers to replace them with environmental ones and followed up with another round of tests to see if they qualified and were compatible with the products. 'Yet, I believe the most crucial step is to change the management system from top down,' said Dr Chai. 'We had to know how to adjust our resources, communicate with suppliers and customers, ensure the consistency of the product quality, etc. It needed a comprehensive solution, not a piecemeal approach.' Solomon Systech, a Hong Kong-based IC company, announced on Monday that it had achieved full compliance for all its products under RoHS. From knowing little about the directive, the company underwent the process of turning into a green manufacturer within two years. 'One of the most troublesome things for us is to replace the widely used solder with other environmental sources, as it is mainly made of lead, a toxic metal,' said Yvonne Chan, corporate communications manager for Solomon Systech. 'The new way of soldering is much more complicated than the traditional ones.' Ms Chan said the integrated circuit manufacturer would launch its latest product - Microdisplay Controller ICs - during the upcoming electronics fair. It was made of environmental materials and met all European standards, she said. While most E&E companies are just setting up greener operations, some producers have gained an advantage from their past efforts. LTK Industries is one of them. The electronic cable and wire supplier invested about US$2 million in its environmental-related facilities over the past 10 years. In 2003, it obtained the 'green partner' certificate from Sony, which has given its global suppliers strict environmental standards to meet. All LTK products have satisfied the RoHS requirements. Mr Thomas Chaung, director of sales and marketing, said the company gained much more than it lost by embarking on environmentally friendly production. 'The past two years were a bad time for the industry [and] many companies closed down. But our business is getting better and better as many customers come to us especially because of our environmental reputation.' he said. Many Hong Kong companies have adopted a wait-and-see attitude towards the change. Chan Kei-bui, chairman of Green Manufacturing Alliance, said the alliance would hold a seminar during the electronics fair in an effort to raise 'green awareness' among local entrepreneurs.