3 March 2005
An Ongoing Success(HKTDC Enterprise, Vol 03,2005)
Shell Electric Mfg (Holdings) Co Ltd
Shell Electric Mfg (Holdings) Co Ltd (SMC) has blazed a winning trail of initiative since it was founded in 1952, with a workforce of fewer than 50 and output of just 20 ceiling fans a day. The firm is now a multinational manufacturer-cum-entrepreneur with profitable operations in various parts of the globe.
SMC developed and patented an "outer-rotor motor" in the 1950s that was recognised worldwide as an economic and efficient manufacturing method. In that period, it also became the first exporter of ceiling fans from Hong Kong.
Another first came in 1982, when SMC commenced the manufacture of microwave ovens in Hong Kong and the Chinese mainland; in 1986, it also set up the first mainland joint venture facilities to make ceiling fans.
Still on the mainland, SMC was among the pacesetters in the production of video products and VCD players and in 1997 started the design and production of the first DVD players made there.
Other notable mainland achievements include pioneering the design and production of super blade computers, laser scanner head modules, and fuser modules for laser printers.
With 5,500 people on the payroll, SMC now operates in three main areas:
Most of the firm's workforce is in four factories in Shunde, where a single plant now produces more than 20,000 ceiling fans daily. A second plant turns out vacuum cleaners, telephones, hearing aid products, home automation systems, optics, imaging and electronic manufacturing systems, while a third is involved in stainless steel pipe production. A fourth plant makes everything from simple consumer goods to integrated services and power cables. These and other mainland properties occupy more than three million square feet.
Elsewhere, SMC has set up joint ventures with Silicon Valley technology company APD to design and produce cutting-edge hi-tech products such as energy-saving and new-generation diodes and rectifiers. Other US joint projects include enterprise software and Internet enhancement software.
One hi-tech triumph of note was a 1997 investment in Kaifa Technology of the US. SMC exited that venture three years later with profits 23 times the original investment. However, even that deal paled by comparison with SMC's US$150m deal in 1995 with US household appliance giant Whirlpool, to whom it sold its spectacularly successful microwave oven division.
The firm maintains R&D facilities for next-generation super blade computers in Shenzhen, and has joint venture commitments with the mainland's two biggest hi-tech innovators - both based in Beijing.
The group's property investments include the tallest office building in the southern mainland - the 80-storey Citic Plaza in Guangzhou (plus two adjoining 46-storey residential towers and a 390,000-square-foot shopping podium). SMC also has a successful commercial residential project in Livermore, California.
In addition to its core industrial and technology businesses, SMC maintains an active interest in selective projects providing long-term and strategic value to the group, including transportation and property.
For more than 10 years, the group has operated a taxi fleet (currently totalling more than 775 vehicles) in booming Guangzhou, capital of Guangdong Province.
According to SMC, it operates with clearly defined strength, vision and purpose. Its strengths include being rich in R&D to beat rising costs, ownership of intellectual property that keeps it ahead of competitors, and strong technical and engineering competence to support brand-name products and original equipment manufacturing.
SMC's vision is to become a world-recognised leader for technological innovation, while its mission is to build its strategic strength as an EMS and ODM expert, to foster aggressive development of proprietary technology and strengthen its intellectual properties portfolio.
The group now enjoys diversified sales operations supported by new products devised by expert R&D teams in Shunde and Shenzhen. To service its worldwide customer base, SMC has North American branches in Dallas and Atlanta, while there are European operations in Holland and Germany.
Clearly no overnight sensation, SMC has its sights firmly set on an equally successful future.
WRITTEN BY GEOFFREY SOMERS