Kenneth Lo: The textile tycoon who puts people first
Crystal Group’s founder Kenneth Lo, is the winner of the Owner-Operator Award at the 2016 DHL/SCMP Business Awards
Crystal Group, which produces garments for brands including Marks & Spencer, Victoria’s Secret, J.C. Penney and Gap, is aiming to triple its staff size to drive an expansion of its revenue to US$7 billion over the next decade, says its founder.
The Hong Kong garment maker, one of Asia’s largest, currently employs more than 60,000 staff in 20 global locations, producing more than 300 million pieces of garments a year. Fiscal 2015 revenue rose 1 per cent to US$1.7 billion.
Crystal’s success has been sewn at the hands of founder and chairman Kenneth Lo, who has spent his whole life in the garment industry.
At the tender age of 14, he first started working at his parent’s factory business, which produced gloves, then sweaters.
Years later in 1970, Lo and his wife Yvonne launched their own sweater-knitting factory, which grew into Crystal Group.
“The garment business is the kind of business a lot of people don’t like,” he said. “It has too many processes and every order is a new process every time.”
Despite the complications, it was a natural fit for Lo, whose late father Law Ting-pong created apparel brand Bossini.
“I enjoy this business because I understand that the garment business is a business about people,” Lo said.
The businessman was born in mainland China, but moved to Hong Kong at a young age.
“Hong Kong at that time was really very poor, and life was difficult for everyone,” he said. “Every day, I ate rice with vegetables and soy sauce, that was it.”
For a period, he and his siblings lived in what was known as a refugee camp, living off United Nations meal coupons.
When he was a teen, Lo started working for his parent’s garment business, working to carry out the vision for “the Great Lo Clan.”
This meant lugging around raw materials for orders of several hundred gloves. On one of these trips, he was detained by the police for overloading his bicycle, and his father had to bail him out.
“Life was hard but then it instilled in me a fighting spirit,” Lo wrote in his memoir For the Greater Good. “I owe my character to such hard times.”
After several years, he and his wife decided to test their own luck by opening a modest sweater factory in Kwun Tong, with around 70 employees and several sewing machines and knitting looms.
“Even then, we didn’t have any vision for how we wanted to go on, how big we might become, or what we wanted to do,” he said. “We only wanted to start [a] business, and wanted to have the business so we can provide a lot of jobs.”
While Lo did not have prior business experience, he was good at dealing with people.
“I was inexperienced in the beginning, and could not help but make mistakes every now and then,” he wrote in his book. “But I was able to learn from mistakes and keep the company going.”
One challenge was the Multi Fibre Agreement (MFA), which imposed a quota on the volume of China-made garments allowed to be shipped into the US and Europe between 1974 until 2004.
Although Hong Kong’s quotas were more generous than those in the mainland, the city’s repatriation to China in 1997 tied it to the country’s quotas, even after China joined the World Trade Organisation in 2001.
“These quotas made it difficult for us to expand,” Lo said. “No other industry has these quota restrictions and tariffs.”
But the biggest struggle was with management. Lo found the traditional Chinese way of running a company was bureaucratic if the prevailing mentality was simply that the boss is always right.
So he championed a people-centric company culture at Crystal, making sure to treat his employees respectfully and create a sense of unity.
And as a boss, he was always reflecting on and working on himself.
This philosophy of respect has guided Crystal Group throughout its global expansion.
The company has championed its personnel development initiatives such as leadership training for executives and future executives, an associate programme for fresh graduates, and a Crystal Advocates Respect and Engagement (CARE) programme for its workers.
And it holds innovation as one of its core values, seeking to constantly improve the company’s efficiency, processes, machinery, and garment styling.
Lo is now valued at US$1.15 billion, according to Forbes, placing him among the top 50 richest individuals in Hong Kong. His brother is fellow billionaire Law Kar Po, chair of the Park Hotel Group.
“To have gotten this far, and for Crystal to be [on Fortune’s 2016 list of companies changing the world], it’s not my labour,” Lo said. “This is really the work of our team.”
Lo’s partnership with his wife, both in business and personally, continues to endure.
“I tell my wife I love her a lot and she tells me she loves me a lot,” he said with a laugh. “It’s funny for me to say this as an old man, but life is all about personal happiness. It’s good to say how you feel.”
While Lo stepped aside in day-to-day operations in 2008, succeeded by his son Andrew, he remains busier than ever.
He’s constantly thinking about ways he can change the world, starting with making sure Crystal Group continues to prioritise people.
“I am 76 years-old,” he said. “I have to focus now on what else I can change within my family, and what else I can do to change the world.”
The company continues to work to reduce its environmental footprint, including cutting down fresh water consumption per garment by 30 per cent.
For its employees, 70 per cent of whom are women, the company rolled out female empowerment programmes to advance up to 40,000 worker lives by 2020.
In addition, Crystal has donated US$6.3 million since 1997 to charitable causes, providing support for eye cataract surgery and other medical support for hundreds of people in rural China.
While Lo says Hong Kong’s textile industry has fallen from its heyday to growth from mainland China, the company will continue investing in new technology.
“This whole path, I have never stopped investing,” Lo said. “Moving forward, things have to get even faster.”
His advice for young people is to have a dream to work toward, maintain a global perspective, put themselves in other people’s shoes, and be brave enough to fail.
“If you don’t have the courage to face failure, if you’re afraid, you will be too fearful to do anything,” he said.