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Nov 1997

HK Enterprise Internet

- Magician Ind (Holdings) Ltd

- Abdoolally Ebrahim & Co (HK) Ltd

Magician Ind (Holdings) Ltd

MAGICIAN Ind (Holdings) Ltd is a family-affair-turned-publicly-listed success story. In 1975 Kong Chi Ching handed over control of his small business (five employees and a plastic blowing machine) to his three sons Yik Ming, Yat Che and Yik Kam. It is every businessman's dream to see his children take over his company, but Kong Chi Ching could not have imagined what his entrepreneurial offsprings would make of Magician.

Over the years, the three have transformed the company into a giant in the general houseware, kitchenware, bathroom accessories and gift item business. Kong Yik Ming, eldest son and chairman of Magician, puts the successful evolution of his father's tiny plastics business down to two main factors.

"We very quickly realised that the key to the future was in the export of goods. Back in the 1970s we could produce our products far cheaper than places like the US and Europe, and when we were approached by a US firm called Kitchen King, we jumped on the obvious opportunity this offered. Since then, it's been a question of building a reputation and most important of all, diversifying."

Despite enormous success in marketing their plastic products to overseas markets hungry for their quality products, the brothers at Magician were not content to simply sit back and watch the existing business do well.

"We have always looked to identify and then make the most of new markets and opportunities. Back in 1981 we moved into using metals in our products, as well as plastic. Then in 1986 as [mainland] China began to open up, we gradually moved our manufacturing base there. Now everything is done there in-house, which means we can keep a tight hold on quality control and keep costs down, thanks to a less expensive workforce and cheaper premises," says Kong.

A preoccupation with quality has resulted in products which Kong says are comparable with the best anywhere in the world. Proof of this is that 70% of Magician's products are exported to the US, a nation known for its insistence on well-finished household items.

The Kong brothers are now looking to the future, and the future, they feel, rests in mainland China. Two years ago they launched Nicole Design, a brand designed to appeal specifically to the mainland market.

"We already sell Nicole Design in 600 supermarkets in the PRC. We should have topped 1,000 by the end of the year. I would say that Nicole Design now has one of the best reputations for quality and design in [mainland] China," says Kong.

"One of the big advantages we have over our competitors is a continuous stream of new items that are targeted specifically at [mainland] China. As the market becomes more sophisticated, Chinese consumers are becoming more discerning and are developing their own tastes. We understand that. They want affordable, fashionable items that will last."

So convinced are the Kong brothers of the mainland's potential that chief executive officer Kong Yat Che now deals solely in the development of that market. Magician has also recently moved into the manufacture of plastic bottles for the mainland by taking a 51% controlling stake in the Hangzhou Great East Packaging Co Ltd. A hard-earned deal with Coca-Cola followed and Magician is now set up to approach other major names in the soft drinks world.

"The fact that we have a deal with Coke should attract others. This plastic-bottle-making business was a logical extension for us. After all, we started out in plastics. It will also serve to give the kind of steady business and income that will allow us to plough more money into R&D. This will be essential if we are to keep ahead of the competition in our core businesses of producing and marketing the very best in household products," says Kong.

Written by Martin Snape

Abdoolally Ebrahim & Co (HK) Ltd

KITCHENWARE distributor Abdoolally Ebrahim & Co (HK) Ltd is a company steeped in history. In a town where many, if not most, companies date back to the early 1970s, Abdoolally Ebrahim & Co boasts 155 years of trading.

One of the oldest firms in Hong Kong (Jardine Matheson set up only one year before in 1841), it set up the first organised ferry service between Hong Kong Island and Kowloon, and is Hongkong Bank's oldest customer. Abdoolally Ebrahim & Co started out dealing in silk, and diversified over the years into the acquisition and distribution of agricultural produce, yarn, lumber and kitchenware.

The current director of this family-oriented organisation is Taha J. Ebrahim. He is proud of the company's long history but is also aware of the challenges posed by the ever-changing demands of the business world.

"Being aware of the history of our company gives me a great sense of pride and responsibility in that it will ultimately be up to me to see that we can keep going for the next 150 years. But we will only continue our success if we are up to supplying what our clients need today and in the future," says Ebrahim.

As a company that is interested in "the long run", Abdoolally Ebrahim & Co is out to secure not only clients' current orders for kitchenware, but also their repeat orders for years to come. "This is why we are not so concerned with keeping prices at rock bottom. Yes, we give our clients a reasonably priced, high-quality product, but what sets us apart is our commitment to making sure that orders get to our clients on time, month after month.

"Our philosophy is reflected in the slogan we adopted during our 150th anniversary, 'Our Word Is Our Bond'. If we say that we will get 100 units to a client on a certain day for a given number of months, then our word is our bond," Ebrahim says.

The firm is a niche player with a tremendous distribution network and a special relationship with its clients, often big names in the industry. Ebrahim sees the company as "a little jewel in the Far East that conscientiously, quietly and efficiently provides a support and service organisation for its customers".

About 70% of business is done with Europe, with the rest spread worldwide. OEM provides 50% of the firm's turnover in its kitchenware division. Abdoolally Ebrahim & Co can also provide custom packaging for the kitchen tools, gadgets, knives, cutlery and stainless-steel products it deals in.

Says Ebrahim: "We don't have our own factories, but then we are distributors, not manufacturers. We are very focused in the services that we offer. We offer quality and delivery on time, with the emphasis on delivery. We aren't a jack of all trades. Once the quality is established, then it's there for good. But with delivery, you have to make sure that things run right every month of every year. If we don't deliver on time, then our clients won't be able to deliver to the retailers, and that means a hole in a display rack which means a loss of sales. We will do everything to ensure that that won't happen." Abdoolally subcontracts to a network of factories, ensuring quality and timely delivery through its own internal system.

A recent development which is working well for the firm is the commissioning of designs owned exclusively by Abdoolally Ebrahim & Co.

"This currently takes up about 5% of our turnover. Over the next two years it will probably make up about 10-15% of our kitchenware business. It enables us to offer clients a line of kitchenware which will be exclusively theirs for a given territory. It's an attractive deal," explains Ebrahim.

Attractive and, given Abdoolally Ebrahim & Co's long history of excellent service, one that can be relied on.

Written by Martin Snape

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