31 March 2004
Hong Kong Household
Vol. 2, 2004
Kitlink Industries Ltd
Kitlink Industries Ltd is well-known for its wide range of wooden and bamboo kitchenware and houseware, including forged-steel kitchen knives
Setting up its own factory on the Chinese mainland in 1991 was the most important move for Hong Kong firm Kitlink Industries Ltd. The company today has high-profile customers worldwide for its wide range of wooden and bamboo kitchenware and houseware, including forged-steel kitchen knives.
"When we started in 1986, we had to depend on sub-contractors on the Chinese mainland," explains director Shao Ming Da. "Some of these caused serious problems because they grabbed as many orders as possible, then tried to rush production, so that output came before quality. We rejected such inferior products, which meant we couldn't always meet suppliers' deadlines, and they in turn couldn't meet the seasonal demand they had aimed to sell for.
"The sensible thing was to open our own factory. Since we use hardwood from rubber plantations for 70% of our products, the natural location was Hainan Island, where the mainland's biggest supplies of rubberwood are available."
The humble rubber tree has been key to Kitlink's wide range of wooden products. Due to the creamy, light-biscuit colour of the wood, the end product tends to look good and has a subtle, silky feel. The company sources rubberwood from Thailand and Malaysia too.
Kitlink also depends on another of nature's gifts, bamboo, for some of its wooden products such as the mini-checkerboard style cutting boards. Another style has a border of "chips" of light-coloured bamboo and a centre square of dark, carbonised bamboo, adding a decorative touch to the kitchen but still providing an ultra-tough surface able to absorb years of "punishment".
Since one of its most popular items is a range of knife-blocks, Kitlink also has a partner-factory in Guangdong Province to tailor-make high quality forged kitchen knives for customers.
The factory in Hainan experienced the usual teething troubles before its 250 workers were adequately trained. Production soon picked up and the company now exports 12 TEU loads a month from Hainan.
About 40% of its customers are in Europe (Germany, the Netherlands, Belgium, the UK, France, Spain, Italy, Switzerland and Scandinavia), 40% in North America, with the remaining 20% spread across Japan, Australia, the Middle East and South Africa.
Kitlink markets 70% of its products under customers' own brand names - many of which are famous in Europe and the US.
Looking ahead, Shao believes the West European and American markets are reaching saturation point, emphasising the need to consolidate and further develop there while also trying to build on sales to Russia and other East European countries, where expansion prospects seem brighter.
Shao is a widely travelled man. He flies regularly from Hong Kong to Hainan to act as trouble-shooter at the factory, while also travelling constantly to Kitlink's biggest markets (in Europe and North America) because he believes in a hands-on approach to his main customers.
"You could say that apart from being director, I am our chief salesman and designer, and main problem-solver," he says. "It keeps me very busy."
For a man who must juggle so many roles he is briefly nonplussed when asked about Kitlink's biggest deal, but soon his face brightens as he recollects the sale of half-a-million knife-blocks to a big US-based importer in the mid-1990s. The massive order took about eight months to fill at shipments of 60,000 a month, and was worth over US$1m.
Queried about his formula for success, Shao explains, "There are probably four factors that are most important. Quality is easily the most important consideration. That is, consistent quality that the customer can depend on. Second, competitive pricing - something that's becoming harder with many competitors trying to get into the same market but producing lower-quality items and undercutting prices. This has become a tough balancing act. Third is dependability on meeting delivery deadlines and the next most important is properly servicing the customer."
Elaborating on the last factor, he cites the case of a customer who has an idea for an innovative product - and perhaps an impossible design - but who must be "educated" into accepting Kitlink's amended design, which incorporates changes required for mass-production and for saving costs as well as space when the product is shipped by container.
"These may seem minor points, but they can make all the difference between a best-seller and a costly loser," Shao concludes.
WRITTEN BY GEOFFREY SOMERS
Kitlink Industries Ltd
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