2 Dec 2004
Growing Energetically(HKTDC Watch & Clock,2004)
Union Energy Industries Ltd
|Union Energy Industries Ltd initially specialised in producing brass spring bars but has expanded its product range to include stainless steel spring bars and stainless steel/brass spring bars|
Union Energy specialised in producing brass spring bars when it began operations in 1978, she explains, but expanded its product range in the 1980s by adding stainless steel spring bars for the higher-end market and stainless steel/brass spring bars for the medium-range sector.
"Our biggest challenge is the fierce competition from manufacturers on the Chinese mainland, which has forced us to cut the prices of our stainless steel spring bars by 50%," Wong admits. "To increase our profit margins, we put greater effort into creating value-added designs."
Wong says that the company's most successful design is a series of stainless steel spring bars featuring functional diamond, mushroom, round or square catches that are designed for high-end watches using interchangeable leather straps.
"Because of its unique design, this series is much more expensive than ordinary stainless steel spring bars," she says, adding that FOB Hong Kong prices range from US$128-257 per 1,000 pieces.
"When we launched the series about 2-3 years ago, brand name watchmakers were our main customers, but our promotional campaigns over the past few years have helped us attract orders from local watchmakers as well."
Realising that unique designs can generate great value, Union Energy has continued to develop new items such as a series of stainless steel spring bars using functional catches with screws, which can be stamped with brand logos.
"This new design allows wearers to remove and then reinstall the spring bars easily when they change leather straps to match their clothing," Wong explains.
"We believe that our new design will have great potential in the high-end watch market, and plan to launch it soon at FOB Hong Kong prices ranging from US$641-770 per 1,000 pieces."
These products will be manufactured at Union Energy's five factories in Dongguan on the Chinese mainland that employ more than 600 workers and are equipped with more than 700 machines, including high-speed automatic lathes as well as automatic and traditional assembly equipment.
"We were the first spring bar manufacturer on the mainland to adopt automatic assembly machines 10 years ago to increase production capacity," Wong claims.
She adds that Union Energy's factories have adopted a Total Quality Management scheme. "Every worker has a key role to play in ensuring that the sourcing of raw materials, production processing and finished products have met the Acceptable Quality Level standard," Wong says.
Union Energy has also reduced production costs by subcontracting some of its assembly work to a factory in Guangxi Province. "There is no difficulty in sustaining our quality control because the factory owner previously worked for us for a long period," Wong maintains.
She believes that this is a win-win strategy for both parties. "We help him set up the factory and create business for him, and in return, he helps us control production costs by leveraging on low labour costs in Guangxi Province."
Capitalising on its expertise in producing watch components, Union Energy recently branched out into exporting watch and clock repair tool sets, and making precision metal components for the electronics industry.
Today, Union Energy's business breaks down into brass/stainless steel spring bars (45%), stainless steel spring bars (40%), brass spring bars (10%), and tool sets and precision metal components (5%).
Its major markets include Europe, Asia and the Americas, representing 33%, 30% and 24% of its export business respectively, while Africa and Australia take up the remaining 13%.
Wong says Union Energy regularly participates in trade fairs to help identify and explore new markets. "Argentina and Brazil, which recorded strong growth of nearly 160% in 2004, are the new markets we developed through the Hong Kong Watch and Clock Fair," Wong concludes.
WRITTEN BY MINDY HO
Union Energy Industries Ltd
Flat D, 18/F, Blk 1,
Tai Ping Industrial Centre,
57 Ting Kok Rd, Tai Po,
New Territories, Hong Kong
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