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FRUITS OF EUROPEAN LABOUR(HKTDC Jewellery, Vol 02,1997)


Vol.2 1997


FRUITS OF EUROPEAN LABOUR - Apple Jewellery Ltd

IN TOUCH WITH STYLE - Myer Jewelry Mfr Ltd

TRADING THE SEA'S TREASURES - Sanwa Pearl Trading Ltd

MAINTAINING STANDARDS - Universal Jewellery Design Center Ltd


FRUITS OF EUROPEAN LABOUR

- Apple Jewellery Ltd

JEWELLERY of European design is sought after all over the world, thanks to the region's tradition of creativity. Providing pieces that fit this mould while using a more competitive manufacturing base has been the goal of two Swiss nationals who established Apple Jewellery Ltd in Hong Kong in 1984. Company directors Markus Forster and Lukas Duerrenmatt now employ 30 staff and Apple Jewellery produces up to 1,500 pieces per month from its premises in Hong Kong.

"We concentrate on everyday wearable casual jewellery of European design," says Forster, who takes care of administration, sales and marketing for the company. "Our production base is quite general and wide-ranging, but the everyday jewellery is our speciality."

The majority of production is cast jewellery in 14K and 18K gold and platinum set with diamonds, coloured gemstones and pearls. Many designs are rendered in bi-colour yellow and white gold as well as some pieces in gold and platinum. Tri-coloured gold pieces with pink gold added are also increasingly popular. Rings make up most of production because, as Forster astutely points out, "Each woman has 10 fingers, but only one neck."

Necklaces, pendants, earrings and brooches complement the range and enable the manufacturer to put together sets of jewellery in collections. Prices range from US$60-2,500 FOB Hong Kong, but the best-sellers are gold rings priced at US$200-500.

Forster sees demand as steady, but notes that following the worldwide recession, price points have dropped. "The lower prices of US$150-250 are in favour now. Generally, the market is asking for even cheaper goods but we concentrate on hitting these price points," he says.

Europe is the main focus for the company in design and inspiration, accounting for more than 50% of exports. Switzerland heads the list of individual markets in Europe, followed by Germany, Austria, Belgium and the UK.

Demand is strong from Japan, where European designs seem to be permanently fashionable and exports there account for 15% of Apple's total production. The remainder is exported to Singapore and Taiwan, and a small amount to the US. Though Apple's business with emerging jewellery- consuming markets in Asia - such as Malaysia and Indonesia - has been steady, Forster says the firm will put more effort into marketing its products in Southeast Asia in the future.

The company attends the three international jewellery trade fairs in Hong Kong, and the world's largest jewellery show held every April in Basel, Switzerland. Both directors also make frequent trips to visit customers, and it is these trips which prove invaluable in the design process for Apple's jewellery.

Trained as a designer and goldsmith, Duerrenmatt takes responsibility for all design and production issues at the company. As well as his creativity and skill, any new product or idea is born from a combination of customer needs and market demand, according to Forster.

If a customer asks for a specific piece or look in a specific price point, Apple evaluates it, designs it and manufactures it.

Forster also notes that it is important for the company to constantly monitor all jewellery markets to see where demand is heading. Tastes change along with fashions and Apple Jewellery strives to stay ahead of these changes on behalf of its customers.

A new line recently reflected the increased demand for larger gold chains, and a design featuring sliding pendants came directly from input from a customer.

Written by Johnny Edison


IN TOUCH WITH STYLE

- Myer Jewelry Mfr Ltd

CLEAN lines, timelessness and elegance are the qualities that Frank Tang, managing director of Myer Jewelry Mfr Ltd, says he strives for in his company's jewellery.

"The marketplace determines style. We produce for a worldwide market. We don't just concentrate on Asia or Europe. That's why our style is not Asian or European. It's Myer's own," he says.

The company's range of products includes gold, sterling silver and platinum jewellery, with diamonds, precious or semiprecious stones, or cubic zirconia providing the gemstone sparkle. "Our prices start at US$2-3 FOB Hong Kong for a sterling silver ring and can go up to US$500,000-1m for an 18K gold set [earrings, necklace, ring and bracelet] with precious stones and diamonds," he says.

Founded by Tang in 1977, with less than six employees, Myer has since become one of Hong Kong's dominant jewellery manufacturer, with 3,000 workers turning out 900,000 pieces of jewellery each year. Its factories, which stretch from mainland China to Sydney and New York, serve markets in the US, Europe, Japan and the Middle East.

"Sydney focuses on Australia, and New York produces for a portion of the US, but our factories in [mainland] China produce for our customers worldwide," Tang says. The US remains its major market, but the company aims as much as possible for balance in its exports.

Diamond jewellery is Myer's largest production line and represents 50% of sales. "We make diamond jewellery with 18K gold mountings, we also do 14K and 10K gold, depending on the market," Tang says. "We like a simple, clean look."

In such a large operation, production efficiency is of utmost importance and is constantly being honed. The company is segmented into a series of divisions according to material - platinum, gold, diamonds, precious stones - which allows workers in those categories to concentrate on specific product categories.

Myer has also embraced technology to help it achieve its goals-using computers for everything from design to cost control, as well as the latest machinery for stone setting and model making.

Computer programs for 2D and 3D design have sharply reduced the time the firm's 300 designers need to take an idea from concept to production process. "Before, it took 2-3 days to go from a pencil drawing to prototype. But now that we use a computer to do the design, it takes half a day," Tang says.

Newly introduced stone-setting machines are being used with channel settings. "Instead of setting stones by hand, we are doing it by machine. So far, we are using it on standard types of jewellery," he says.

For Tang, it has been a long road to success. Before he founded Myer, he worked as a jeweller and later as a production manager at several jewellery operations in Hong Kong, including Cartier. He even trained for a year in Paris for a management post at the internationally renowned French jewellery house, but the lure of starting his own business proved too strong.

Within a year of the company being founded, he had hired 100 workers and moved the firm's headquarters to a 4,400-square-foot factory in Hung Hom, now the heart of Hong Kong's jewellery industry. Starting out as a jewellery subcontractor for other Hong Kong firms, by 1979 Tang was firmly steering the company towards exports. Today, 99% of the company's production is exported.

Future plans call for continued efforts to improve production efficiency and expand sales within existing markets. "We have rooted ourselves in most markets already, but there are still some customers that we are not yet in touch with. We plan to recruit more qualified sales and marketing people to strengthen our network, find those customers and let them know about Myer's products and quality," Tang says.

For the man who has climbed to the top of Hong Kong's competitive jewellery industry, making Myer bigger and better is all part of a day's work.

Written by Andrea Pawlyna


TRADING THE SEA'S TREASURES

- Sanwa Pearl Trading Ltd

ALMOST all of Sanwa Pearl Trading Ltd's products come from the sea-mabe pearls, Akoya pearls, imitation pearls, coral and mother-of-pearl products are the main items the company uses to manufacture jewellery for export from Hong Kong.

Of the two types of shell used by Sanwa to assemble mabes, 90% come from Japan. The remainder is made up of Australian shells, and competition is tough in these products.

But demand is increasing faster than supply, especially because pearl harvests in Japan have dropped in recent years as a result of pollution. Managing director Henry Fung says: "Next year, only 50% of our mabes will come from Japanese shells, since we need to satisfy our customers' increasing demand and Japan is not farming enough."

The company was established in 1990 and merged with its manufacturing arm, Polfung Brothers Enterprise Co, in 1995. Sanwa now has three factories, two in mainland China and one in Kobe, Japan. Prices for the mabes range from US$6 to US$100 FOB Hong Kong for sizes up to 21 millimetres.

Mabe pearls account for 70% of Sanwa's total business. Another 10% comes from South China Pearls, the company's brand name for its imitation pearls made from ocean shell coated with a chemical pearl liquid.

"This product is a very high-quality pearl imitation, and the point is to produce something as close as possible to a natural cultured pearl," Fung says.

South China Pearls were first developed by the company in 1987 and quality really started improving from 1991 onwards. "They are the future, since pollution is really affecting the pearl farms and imitations can really help," Fung says.

Sizes range from three to 20 millimetres and prices range from US$0.20 to US$80 per piece. Popular sizes are 10-15 millimetres, priced from US$0.50 to US$40.

Sanwa also offers South China Coral, known in Europe as Sponge Coral. "Our advantage in the coral trade is our cutting quality, which is the best in Hong Kong. Designers looking for unusual materials like our material since we treat it as if it were a high-quality product and put more effort into the style and polish. This means it can then be used in higher quality jewellery," Fung says.

Bamboo coral is another important product for Sanwa. The coral is dyed to resemble Taiwan Ox Blood, Japanese Deep Sea or Italian Sardinia colour. The quality after dyeing depends on the technicians, and Sanwa uses only the best. Prices range from US$2 to US$50 for 2.5-10-millimetre sizes.

Exports to Europe account for half the company's business - mainly to Spain, Italy and Germany. South Korea, Taiwan, Japan, Indonesia and Singapore take 20% of Sanwa's total production. The US takes 10% and the remainder goes to South Africa and the rest of the world. "We see potential in all our markets at the moment, because we cannot manufacture enough of any of our products to satisfy demand," Fung says.

He sees a bright future for the company, especially operating from its base in Hong Kong. "Business is more active in Hong Kong and it is easier for foreign buyers. It is the convenience of Hong Kong that makes it attractive. Sanwa does not compete with other companies on price. We compete with our service and our quality. We can do what the customer wants and we act as a service company," Fung says.

Written by Johnny Edison


MAINTAINING STANDARDS

- Universal Jewellery Design Center Ltd

UNIVERSAL Jewellery Design Center Ltd is proud of its craftsmanship. From its US$1m FOB Hong Kong necklaces with 100-carat centre stone diamonds to more down-to-earth items costing US$1,000, the standards are the same.

"The only thing different about our less expensive goods is that we use smaller diamonds or lighter-weight gold or platinum," affirms Kenneth Kwan, manager of the company which was founded by his father and uncle in 1948. His two brothers are also involved in the company, still a family business.

Most of the 5,000-10,000 pieces of jewellery the company's 180 workers produce each month are designed by Universal's team of five designers. A small amount is produced according to customer specifications, Kwan says.

The company offers jewellery in two price ranges - moderately priced goods from US$1,000 to US$5,000 and high-end items from US$5,000 to US$1m. More than half of what it produces is cast; the rest is handmade. Handmade articles, such as sets, can take 2-3 months to produce; a ring, 1-2 weeks. "It is better to make some types of jewellery by hand, and some by casting. We do high-quality casting," Kwan says.

In recent years, Universal's customer demand has shifted from coloured stones to diamonds and South Sea pearls. "Diamonds, including fancy-coloured diamonds, account for 60-70% of our sales, South Sea pearls are 20% and coloured stones are 10-20%," Kwan says.

Platinum mountings have surged in popularity lately, far overshadowing that of 18K gold. "White metal has been very popular for the past few years. At least 80-90% of our mountings are platinum. We used to use 900 platinum, but now we use 950 platinum. We sell to many European countries and they accept only 950," he says.

The trend towards platinum has also affected the quality of diamonds Universal uses in its jewellery. "We were able to use I-J colour with yellow gold [because the slightly yellowish tinge of those diamonds would be masked by the yellow metal], but with platinum you have to use E, F or G. Higher quality diamonds means the price will be more expensive," Kwan says. Natural-colour yellow, pink and blue diamonds are among the fancy colours in demand.

South Sea pearls in 12-14-millimetre sizes are the most saleable for jewellery. The market for medium-and lower-priced pearl jewellery has been growing at the expense of high-end goods, mainly because of the improved US market, he says.

While rings were the dominant sellers in the past, earrings and pendants are rapidly gaining ground. "Now less than half of our sales are rings. There has also been less demand for sets," Kwan says.

About 90% of output is for export, with Japan, Taiwan, Malaysia and Indonesia accounting for more than half of sales. The rest is divided among the US, Europe and the Middle East. "In Asia, they buy bigger pieces. By quantity, we sell more to the US, but by value, we do more in Asia," Kwan says.

In terms of design, Universal prefers a simple, uncomplicated European-style look. "People want to spend money on the stones rather than the mounting. They want something with less design," maintains Kwan.

The company manufactures virtually all of its jewellery in Hong Kong, although it has a small factory on the mainland. "We do small, low-end pieces there for goods made for our non-major markets," he says. But the company has no intention of breaking into the low-end market in a serious way. "There's too much competition in that segment," Kwan says.

Neither does Universal have plans to expand its existing operations. "If we become too large, quality control becomes difficult. That is one of the most important things about our business."

The company is confident that its past formula for success will continue to hold it in good stead in the future. "As long as you have good quality, fair prices and good designs and workmanship, we will always have business," he says.

Written by Johnny Edison

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