Techtronic: from small-time tool maker to powerful global leader
Co-founder and chairman Horst Julius Pudwill – this year’s DHL/SCMP Business Person of the Year – reveals how he turned the manufacturer started in 1985, into a business worth $1.45 billion today
German-born Horst Julius Pudwill arrived in Hong Kong in 1971 – and never left.
“I liked Hong Kong instantly, it was a vibrant city, even at that time,” the founder of Techtronic Industries (TTI) tells the Post from his spacious Wan Chai office, decorated with art from around the world, including a piece by American artist Andy Warhol.
“Hong Kong is relatively as it was; everything is vibrant and fast.”
Now 71, Pudwill knows all about speed. His power tool company has been growing fast, hitting sales and profit records for six years in a row.
When he started TTI in 1985, he planned it to be an original equipment manufacturer of battery-operated power tools, which were very new at that time.
But after landing a growing number of high-profile clients and acquisitions – including well-known household brands Hoover, Milwaukee and Ryobi – the company has mushroomed at an average of 35.5 per cent annually, into one of the biggest power tool manufacturers in the world, with 20,000 staff and customers all around the globe.
Pudwill’s personal fortune has grown too. He’s now worth $1.45 billion and is the 1,275th richest in the world and the 40th richest man in Hong Kong, according to Forbes’ 2016 billionaires list.
The Hannover-born Pudwill said right from the get-go he had dreamed of creating a big business.
He first came to Hong Kong as Volkswagen’s manager of service and sales, then started his own trading company, before setting up TTI with his Macau-raised business partner Roy Chi Ping Chung, who is now a non-executive director.
“Nobody was really doing power tools, they were doing hand tools,” he said.
“I thought I’d build up a business with innovation, because you had to do something special, otherwise you were competing against so many others. I had always had an interest in tools because I have an engineering background.”
At first, the power tools were made in Hong Kong but in 1988 production was moved to Dongguan, Guangdong, where it has been made ever since. Almost a decade later, in 1999, TTI bought its first brand, the UK vacuum cleaner company Vax.
But it was its acquisition of power tool brand Ryobi in 2000 that stands out to Horst as his cleverest move.
After that, business really took off, expanding sales from US$583.52 million in 2000 to US$5 billion in sales last year.
“My highlight in Hong Kong was really when we started our own factory, and produced the products ourselves,” he said. “Another was to see everything growing the way we planned to.”
“But wouldn’t you say the most exciting thing was founding TTI?” chips in his 39-year-old son Stephan Pudwill, who is now a vice chairman.
“Well...yes, the most exciting thing in hindsight was creating TTI,” the older Pudwill says, adding that acquiring Ryobi was certainly the most exciting.
“In our business, we have no competition basically from China or from South Korea. But we do have competitors in Japan, Europe, and the US.”
Horst says one word distinguishes his firm from the pack: vision
“When we started with our cordless power tools, people said it was a gimmick, but they had no foresight. We had innovation, we constantly delivered new products, we were quick to market, and offered quality at affordable prices.”
He also believes that as well as offering quality, having honourable people working for the company, who can tell him “yes is yes, no is no”, has been another key to success.
The big question facing the business now is whether TTI can continue to grow, and how it goes about it.
Pudwill Snr says he plans to remain involved in the company and see it double from its current US$5 billion value.
“He’s not allowed to retire, we won’t let him retire,” Stephan jokes.
“We don’t want to make an acquisition just for the sake of doing it, we want to make an acquisition that’s right for the company.”
The plan was, and continues to be, buying small companies and building them up.
“Every brand we’ve bought in the last 10 years at the minimum has doubled its business,” Horst said.
“We were lucky to buy these brands, manage them and improve the quality and name. We didn’t buy any company that had become stagnant.”
Stephan is firmly back in the family company fold after a decade away from Hong Kong.
“I was very happy when he came back home,” Horst said, noting he had always wanted his son to be involved, but Stephan has helped create his own position.
“He established himself well. It’s not easy coming in and being the son.”
Horst adds he is so glad he didn’t return to Germany. “The climate is good, you get things done, it’s easier in Asia.”
“Maybe I was lucky – I expected more bumps along the road,” he said. “We had to work hard but we got rewarded for it.”
Looking back now, he’s proud of what he achieved, including this latest award.
“It can also give motivation to people in Hong Kong not to give up. If you keep trying you can achieve anything.
“I feel we have given something back – that’s what has made TTI a leading company, which is trusted by its customers.”
Other winners at last night’s awards dinner at the Grand Hyatt Hotel were:
● Executive Award: Thomas Ho, chief executive, Gammon Construction Limited
● Owner-Operator Award, Kenneth Lo, chairman, Crystal Group
● Young Entrepreneur Award, Ken Law, chief executive officer, MotherApp
● International Award, Malina Ngai, chief operator officer, A.S.Watson Group
● Enterprise Award, Ma Jianrong, executive director and chairman, Shenzhou International Group Holdings Limited
● China Company Award, Lu Sa, executive director and deputy general manager, Guangzhou Automobile Group
● SME Award, Jonathan Glover, managing director and co-founder, The Butchers Club
Over the coming days, SCMP will be profiling each of the winners.