Hong Kong

Hong Kong has been chosen as the Asian hub for Canadian rare resource and jewellery company Korite International Inc. The Alberta-based company controls nearly all of the world’s resources of ancient Ammonite fossils and the jewellery made from them, Ammolite. Korite’s CEO Martin Bunting said Hong Kong’s world-beating trade shows and location offer huge regional potential, with connections to the Belt and Road and Guangdong-Hong Kong-Macau Bay Area initiatives.

Speaker:
Martin Bunting, CEO, Korite International Inc

Related Links:
Hong Kong Trade Development Council
http://www.hktdc.com

HKTDC Belt and Road Portal
http://beltandroad.hktdc.com/en/

Blackpanda, a Hong Kong special risks consultancy, draws on the image of the panda to show its community development credentials. But it also aims to show “risk” as an important aspect of the Belt and Road Initiative, with cyber security a major challenge, says CEO Gene Yu. Hong Kong’s connector role is all-important to clients as the firm opens markets in Southeast Asia.

Speaker:
Gene Yu, Co-founder, CEO, Blackpanda

Related Links:
Hong Kong Trade Development Council
http://www.hktdc.com

HKTDC Belt and Road Portal
http://beltandroad.hktdc.com/en/

Hong Kong-based special risks consultancy firm Blackpanda has developed methods to reduce concerns to investors and project developers under the Belt and Road Initiative. Specialising in physical security, intelligence, community relations, cyber security and insurance, the firm has done military-style exercises to measure risks and CEO Gene Yu says Hong Kong’s safe environment and financial stature are matched by its alignment with the Belt and Road.

Speaker:
Gene Yu, Co-founder and CEO, Blackpanda

Related Links:
Hong Kong Trade Development Council
http://www.hktdc.com

HKTDC Belt and Road Portal
http://beltandroad.hktdc.com/en/

The Hong Kong University of Science and Technology is playing a key research role for Belt and Road Initiative opportunities, says HKUST’s Albert Park. Co-presenting a series of market insight seminars, Professor Park says the HKUST’s Business School has a major collaboration with overseas academics while as founding member of the Asian Universities Alliance it is promoting two-way partnerships with Belt and Road countries and opportunities in Hong Kong.

Speaker:
Albert Park, Director, HKUST Institute for Emerging Market Studies

Related Links:
Hong Kong Trade Development Council
http://www.hktdc.com

HKTDC Belt and Road Portal
http://beltandroad.hktdc.com/en/

The Hong Kong University of Science and Technology (HKUST) is leading a five-year study to reduce the effects of landslides, including among China’s Belt and Road countries. HKUST’s Charles Ng says the multi-disciplinary, multinational study includes student participation in developing a world-leading standard of landslide barriers for “export” to many countries.

Speakers:

• Charles Ng, Chair Professor, Civil and Environmental Engineering, HKUST
• George Goodwin, UK Student
• Kelvin Au, Hong Kong Student
• Hengdu Liu, Chinese mainland Student
• Rafa Tasnim, Student from Bangladesh

Related Links:
Hong Kong Trade Development Council
http://www.hktdc.com

HKTDC Belt and Road Portal
http://beltandroad.hktdc.com/en/

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.

Hong Kong’s historic Peak Tram and The Peninsula are iconic landmarks for visitors while the Belt and Road Initiative provides long-term opportunities for their owner, The Hongkong and Shanghai Hotels. CEO Clement Kwok says the key to success is the company’s focus on people-to-people relationships.

Speakers:
Clement Kwok, CEO The Hongkong and Shanghai Hotels
Kim Wedderburn, Lawyer, IT sector
Antonia Theresa Rodriguez, Chief Order Taker, Room Services, The Peninsula Hong Kong
Henry Ho, Guest Relations Executive, The Peninsula Hong Kong

Related Links:
Hong Kong Trade Development Council
http://www.hktdc.com

HKTDC Belt and Road Portal
http://beltandroad.hktdc.com/en/

Tax incentives and financing expertise for Belt and Road Initiative projects offer huge opportunities for Hong Kong as a treasury centre, says Paul She of global accounting and consultancy firm, Mazars. The firm is focusing on technology clients related to the Belt and Road – some for IPO launch on the Hong Kong Stock Exchange – companies “often missed by the market”.

Speaker:
Paul She, Practising Director, Mazars CPA Limited

Related Links:
Hong Kong Trade Development Council
http://www.hktdc.com

HKTDC Belt and Road Portal
http://beltandroad.hktdc.com/en/

Prosper Construction Holdings, a Hong Kong-based contractor specializing in marine construction services, has an established track record in marine infrastructure developments at home and abroad.

Established in 2001, Prosper Construction owns over 50 marine plants and vessels, including floating jetties, a floating batching plant, a wide range of barges and dredging equipment, and a diversity of land construction equipment such as cranes and earth-moving machines. It also operates its own crew and technicians. All these give the company an edge when bidding for projects and enables it to ensure high project quality and good time control. This strength in resources has also helped Prosper Construction win a variety of marine infrastructure projects in regions or countries along the Belt and Road route. A good number of the projects are located in Indonesia, Southeast Asia’s largest economy which has the region’s greatest need for new infrastructure.

A high-profile project that Prosper Construction completed recently through its subsidiaries, Hong Kong River Engineering Co. and PT Indonesia River Engineering Co., is a coal-fired power plant in Bali.

Located in Celukan Bawang, North Bali, the plant was built with an investment of US$700 million by China Huadian Group, one of the five largest state-owned power generation enterprises in China, as well as PT Merryline International, and PT General Energy Indonesia. It consists of three units, each carrying a capacity of 142 megawatt units and using efficient, clean coal technology.

Over the past decade, Bali the island has been depending heavily on electricity supplied by Java-based power plants. Demand for electricity on the island has been on the rise, and frequent blackouts have hampered local businesses and investments. The establishment of the plant is expected to help the island enjoy more stable power supply.

Prosper Construction was responsible for constructing the jetty, revetments and seawater intake pipeline. The company’s Hong Kong team was behind the scenes, drafting the tender proposal in the early stage and liaising with consultants.

There were considerable challenges in executing the project, including local shortage of building materials and strong wind and fierce waves in the area where the plant is located. Yet Prosper Construction managed to pull through by ensuring its technicians upheld the safety standards and by sourcing materials from China.

The project is an example of how a resourceful Hong Kong company can readily employ what it has to support Chinese investors to go abroad and help build infrastructure projects that benefit Belt and Road countries.

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.