Manufacturing and Relocation

Lee Kee Group – Hong Kong solutions provider for metals anticipates Belt and Road-related growth in Southeast Asia region

2155 Views

As Belt and Road-related business opportunities continue to emerge in Southeast Asia, Lee Kee Group, a Hong Kong-based solutions provider for metals, believes demand for its products and services will continue to grow.

Lee Kee, which was set-up as a scrap metal recycling firm by Chan's great-grandfather in Hong Kong in 1947, has been widely recognised as the pioneer in the metals community. Lee Kee opened a regional office in Singapore in June 2017 to provide sales and distribution services plus technical consultancy services to new and existing clients moving into the region. "Southeast Asia is a pivot part of Belt and Road Initiative," noted Clara Chan, Lee Kee's CEO and the fourth-generation family member to head the 70-year-old company. "We have been serving the Southeast Asia market for many years. In the last few years, we witnessed the rapid growth of manufacturing activities in the region. An office in Singapore enables us to cater the needs of new and existing customers better while keeping us abreast of the regional development to grasp upcoming opportunities," Chan said.

Chan said the Belt and Road Initiative came along at time when Hong Kong’s businesses were looking for new opportunities. With Southeast Asia as one of the primary focus regions of the Initiative, a notable number of mainland manufacturers had been moving to the region to take advantage of close proximity to these emerging markets while participating in Belt and Road-related infrastructure and associated projects. Lower labour cost is also a driving force. "Manufacturing cost in the Chinese mainland is escalating and the manufacturing industry is undergoing transformation. A lot of mainland manufacturers are moving their traditional manufacturing capacity to Southeast Asia. Wherever they are, the need of reliable metals is the same, and we support our customers whenever, wherever they need us," Chan explained. Lee Kee offers a broad portfolio of metals including zinc, aluminium, nickel, copper as well as zinc alloy, aluminium alloy, stainless steel and electroplating chemicals. "We create value not only by providing standard alloys but offering our customers custom-made alloys that best suit their design and product needs," Chan said.

On the other hand, Southeast Asian companies are increasing their demand for professional services that Lee Kee offers. In addition to producing and distributing metals, Lee Kee's businesses activities include quality assurance, testing and technical consultancy services. Its laboratory was the first in Hong Kong accredited in the Metals and Metallic Alloys category by The Hong Kong Laboratory Accreditation Scheme (HOKLAS) and is an approved LME Listed Sampler and Assayer (LSA). The company’s customers span across more than 20 sectors ranging from automobiles to toys to household hardware items and fashion accessories. "By working closely with our customers on improving their defect rate and enhancing their productivity, we help our customers to be more competitive. This is how we ensure that Lee Kee is their partner of choice," added Chan. There is no doubt that newly-established manufacturing enterprises would appreciate any insights that would help them upgrade their operation and build quality products efficiently.

Chan believed Hong Kong's extensive international business and cultural connections, its use of English and Chinese and its sophisticated financial and legal systems provided the city with a competitive edge as a facilitator for Belt and Road projects. Besides, Hong Kong businessmen are agile, innovative and proactive. Chan gave an example of her setting up Lee Kee's brokerage services in Hong Kong. The extension of Lee Kee’s scope of services was considered a bold move by many in the metals community yet it was a testament to Hong Kong's strength and reputation as an international finance centre. "We differentiate ourselves by providing a platform for our customers that covers their risk exposure to products, raw materials and pricing," Chan explained. She said the rigorous regulations and compliance rules Hong Kong implements provide brokerage customers with confidence.

As CEO, Chan led the family business to its successfully listing on the Hong Kong Stock Exchange in 2006. She also ensured that Lee Kee secured its position among the world's premier metal players by becoming a member of the London Metal Exchange (LME). "Being a LME member enables us to share China’s metals market situation on an international platform to enhance mutual understanding and communication," Chan said. She added that membership of the exclusive industry body provides an endorsement of its international-standard operations and management system which she found valuable when the corporation entered a new regional market.

Furthermore, she believed the far-reaching scope of the Belt and Road Initiative provided a prime opportunity for young Hong Kong people to widen their horizons by learning about different cultures and the various ways business are conducted across the Belt and Road countries. "The Initiative will provide invaluable learning opportunities and it is important for young people to approach opportunities with an open mind-set," Chan said.

Market(s)

Sector(s)

Country(ies) / Region(s)

Express Luck Industrial, a manufacturer of high-technology TVs founded and headquartered in Shenzhen, ships its products to various parts of the globe. The firm has offices in different places, from Hong Kong to Hungary to Mexico. Among these branches, the one in Hong Kong plays a pivotal role in central management and raising capital for the company.

One of the major markets for Express Luck’s products is Central and Eastern Europe (CEE). A few years ago, the firm started to manufacture TV sets in Romania and shipped the finished goods directly to different parts of the region, helping Express Luck enhance operational efficiency.

Then in the first half of 2016, Express Luck chanced upon an opportunity for growth in CEE: a global electronic company was looking for a buyer to take over its production plant in an industrial area on the outskirt of Budapest, Hungary. It was an attractive offer because the plant is well-located and well-equipped, and only slight moderation of the existing facilities was needed to ensure compatibility with Express Luck’s production activity. Express Luck bought it without much hesitation.

In the process of setting up the plant, the Hong Kong office of Express Luck played a leading role in management matters, including financial planning and devising business strategies for the plant.

Terry Tam, Chief Financial Officer of the Hong Kong office of Express Luck, says the plant, launched into operation in October 2016, now produces LED TVs for the company’s own brands and some other licensed brands. In 2016, Express Luck exported a total of five million TV sets. It expects the plant in Hungary to produce 600,000 sets for the year 2017 – about one-tenth of the aggregate output of the whole company – and more in the years to come, given the great growth potential of the CEE market.

Express Luck is not alone in its optimistic projections of CEE. Over the past decade, Chinese investment in CEE has been growing by 32 per cent annually. In 2016, China set up a 10 billion-euro investment fund to finance projects in the region. In pushing its Belt and Road Initiative, China has also enlisted CEE as a strategic partner.

As Chinese interest in the region continues to grow, CEE countries are also making an effort to promote closer economic ties with China. Hungary, China’s biggest investment destination in CEE, is in particular responsive to the Belt and Road Initiative. In June 2015, it became the first EU member to sign a memorandum of understanding with China on integrating its “Eastern Opening” policy with the Belt and Road Initiative. In May 2017, the two countries announced the establishment of a comprehensive strategic partnership.

According to Tam, the advantages of investing in Hungary are plenty, including the “availability of skilled workers, established infrastructure and supportive government policies”. He believes the Belt and Road Initiative will raise the living standard of people in the CEE and therefore drive up demand for consumer products such as TVs.

“Demand for TVs in Eastern Europe is already on the rise. Many people still have an old model TV at home and they want to switch to inexpensive LED TVs. The Belt and Road Initiative should help push the demand further as it will bring more growth opportunities to the region. When that happens, we may expand our operation there,” Tam says.

Meanwhile, Express Luck is gradually expanding its Hong Kong operation to cope with the company’s growth at home and abroad. The branch moved to a bigger office in April 2017 and is positioned as a second headquarters. According to Tam, as Express Luck’s business is expanding in CEE, the Hong Kong operation is expected to play a bigger role in helping to raise capital, given that the city is a “world-class financing platform” offering different means for companies to raise funds.

With its geographical advantage and a sophisticated financial system, Hong Kong demonstrates through Express Luck’s story what added value it can offer to Chinese companies seeking to build up a presence in countries along the Belt and Road.

Market(s)

Sector(s)

Country(ies) / Region(s)

Mainland Headwear Holdings Ltd was established in 1986 and listed in Hong Kong in 2000, engaging in the design, manufacturing, trade and retail of casual headwear. In recent years, Mainland Headwear has expanded its businesses through mergers and acquisitions as well as the establishment of strategic alliances, including signing a manufacturing agreement with New Era Cap Co., Inc., acquiring H3 Sportgear LLC and San Diego Hat Company, and forming a joint venture with Promotional Partners Worldwide Group Ltd to design, manufacture, and sell Sanrio products in the Chinese mainland. Headquartered in Hong Kong, Mainland Headwear has factories in Shenzhen and Bangladesh, manufacturing licensed casual headwear which are primarily sold in the US and European markets.

Capitalising on the Belt and Road Initiative, Mainland Headwear set up a 25,000-square-metre factory in rural Bangladesh in 2013 to boost production as the rise in labour costs on the Chinese mainland was weighing on profits. In its initial three years of operation, the company’s factory expanded significantly, with the number of staff increasing from 200 in 2013 to 4,500 in 2017, and monthly production together with production efficiency are continuously being enhanced.

Mrs Pauline Ngan, Deputy Chairman and Managing Director of Mainland Headwear Holdings Ltd, said many infrastructure projects including expressways, railways, deep water ports and power plants had been built in Bangladesh since the launch of China’s Belt and Road Initiative. The travelling time between the capital city Dhaka and Chittagong port will be shortened from seven to eight hours, to four to five hours upon completion of a new expressway, which will greatly improve the efficiency of raw material transportation. With the railway from Dhaka to Kunming expected to be completed in 2020, along with the deep water port construction deal between Bangladesh authorities and China’s COSCO, the local garment manufacturing industry is tipped to grow.

With more than 30 years of industry experience, the company overcame operational challenges in Bangladesh with its localised manufacturing planning and customised human resources management scheme. The company developed a digitalised inventory monitoring system, the ERP System, for management to obtain real-time information about inventory and raw materials’ status, and for customers to track their orders. Specialised equipment such as embroidery machines, sublimation printers and laser engraving machines were also widely adopted to better manage output. The company also maintained effective two-way communication with its staff to tackle issues arising from cultural misunderstanding. In order to instill a team atmosphere and strong sense of belonging among the workers, the company organises praying assemblies for Muslim workers, and provides comprehensive remuneration packages including housing allowances and gift packs with daily necessities. The setup of the factory has also boosted the population of the village from 400 to 10,000, improving its GDP and living standards.

Mrs Ngan said the Hong Kong-based company has been playing a role in connecting Chinese investors and the Bangladesh authorities. As a member of the Chinese Investors’ Alliance, Mrs Ngan provides consultation and training services to newcomers through regular classes on setting up companies in the country and overcoming cultural barriers.

Mrs Ngan said, as the company further expands its operation in the country, the Bangladesh factory will become the focus of the company’s business development. The second phase of the factory will be in operation by the year 2018. The company also plans to recruit 2,000 additional workers and local university graduates to hopefully enhance the synergy between the Bangladesh factory and the design and high-end production facilities in Shenzhen.

Market(s)

Sector(s)

Country(ies) / Region(s)

Lucy Tran of Intbox Intelligent Packaging Corporation (Vietnam) talks to the HKTDC at Deluxe PrintPack.

The Hong Kong Gifts & Premium Fair, Home InStyle and Fashion InStyle, held at the Hong Kong Convention and Exhibition Centre on 27-30 April 2025, and the Hong Kong International Printing & Packaging Fair and DeLuxe PrintPack Hong Kong, held concurrently at Asia World-Expo, bring together some 6,000 exhibitors from over 30 countries and regions, including Mainland China and Hong Kong, as well as Australia, Japan, Korea, Malaysia, Thailand, Italy, Spain, Switzerland and the United States. Also held on 28-30 April 2025 at the Hong Kong Convention and Exhibition Centre, the Hong Kong International Licensing Show and the Asian Licensing Conference showcase more than 600 brands and intellectual properties (IPs) spanning arts and museum licensing, animation character licensing, brand extension licensing, lifestyle licensing and entertainment licensing alongside more than 70 popular local brands, and bring together industry leaders to explore key topics including the latest developments in global licensing. The events serve as a bridge connecting Hong Kong's creative industries with Mainland China and international markets while reinforcing the city’s positioning as a regional creative hub.