12 Jan 2007
Impressive Growth(HKTDC Electronic Components & Parts, Vol 01,2007)
Luen Fung Silicone Rubber Mfg Co
|Luen Fung Silicone Rubber Mfg Co has its eyes on achieving even better business in 2007 with its membrane switches|
Established in 1989 as a merchant dealing in silicone rubber products before changing lanes in 1996 to become a manufacturer, Luen Fung Silicone Rubber Mfg Co has its eyes on achieving even better business in 2007 with its membrane switches and other high-value products.
Having gained much experience as a trader, the firm correctly believed that a more profitable direction lay in manufacturing. "In the beginning we produced keypads for mobile phones and calculators," says sales executive Anthony Lam. "We later added rubber feet for laptop computers and so forth, rubber parts and O-rings."
A few years later (2001), the company commenced the manufacture of membrane switches. "We started this line because some of our customers used both types of products and clearly we could sell twice as much," says Lam, adding that Luen Fung's membrane keyboard switches have embossed overlays for a better tactile feel and good ergonomics, Mylar and metal domes and UV hard-coated flat keys.
"Our full range now comprises silicone rubber keypads, zebra connectors, membrane keyboard switches, O-rings, rubber feet and rubber parts," Lam adds. "The main applications for our databank keypads are in the electronics industry, communications systems, consumer electronic products and the toys and games industry."
Lam says that Luen Fung remains competitive by keeping prices down while simultaneously maintaining high standards of quality. The company also tries to find customers able to pay the quoted price and recognise the value.
"We do not produce goods to lose money," Lam states. "All we ask for is a fair price, which is why we work closely with credit-approved clients - usually on a short payment cycle to keep the interest down. We cannot produce for large companies who insist on long payment terms. That is not our style."
Prior to launching its manufacturing operations in 1996, Luen Fung invested in land and buildings in Shenzhen on the Chinese mainland.
Progress was swift, and the firm's factory became ISO 9002-certified in 1999. Just a year later, with the help of an investment of HK$8m, the plant was expanded to some 13,000 square feet.
In 2001, the firm gained ISO 9001 certification, while another milestone was reached in 2003 when further expansion increased the plant area to 20,000 square feet and the workforce to 250. Just 12 months later, the firm opened a second factory - bringing the total work area to more than 250,000 square feet and the workforce to 500.
Even so, Luen Fung has a new factory under construction - due to be finished before March 2007. The new building will have 253,000 square feet of production space. "We anticipate a productivity increase of 100% with the new premises," says Lam.
"To reach new customers, we depend a lot on trading companies that act as agents to liaise with the end-user or buyer," says Lam. "We are working out ways to do more business direct, by seeking clients at trade fairs and by advertising in trade magazines and online."
He adds that Luen Fung will attend fairs in Hong Kong, Germany and Russia. "Those are the main targets," he adds, "but we are also looking into trade fairs in India."
With the mention of India, Lam is broaching a topic that has a bearing on the company's offshore manufacturing desires. "The cost of manufacturing on the Chinese mainland is increasing," he observes. "Labour costs have risen, and by 2010 the Chinese yuan might be even more highly valued."
In the belief that it will not be possible to relocate cost-effectively on the mainland, Lam feels that India offers certain advantages. "We would not be looking at the domestic market in India, though, despite its massive population, but would export and re-export via our Hong Kong office," he says.
Meanwhile, to attract business from new customers, Luen Fung relies on its good name and reputation. "We are well-known in the industry, even though our customer base is not large. However, our product range is used in many different sectors ranging from communications and electronic instruments to kitchen items and gifts," says Lam. "All told, that's big business and the market is still wide open and we have a long way to go!"
Luen Fung obviously has its fingers on the right buttons for future business prospects in silicone rubber goods.
WRITTEN BY TONY HENDERSON
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