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Hong Kong opens materials center to help firms upgrade

By: Steve Toloken

August 21, 2012

HONG KONG (Aug. 21, 1:50 p.m. ET) — Hong Kong’s plastics industry hopes that a new government and industry-funded center of polymer information will help local companies upgrade and better handle the challenging economic situation.

At an Aug. 15 ceremony to open the HK$2 million (US$257.8 million) Plastic Materials Resources Centre, industry officials said they hope it will make it easier for companies to move into more advanced materials and upgrade their products and profits.

“I think it will give a platform that all the factory managers or the R&D people can have a place where we can discuss, ‘OK, we have a new product, what kind of material we can use, and what are the molding conditions,’ ‘’ said Daniel Wong, chairman of the Hong Kong Plastics Industry Council and one of two industry coordinators for the project. ‘’It will provide a platform to exchange ideas. This is what we hope we can achieve.’’

The focal point of the center is an easily searchable materials database, partly in Chinese and with contacts for local suppliers. The database was developed by the Hong Kong Productivity Council.

Historically, Hong Kong’s plastics industry has focused on manufacturing electronics, toys and consumer products using commodity materials like polyolefins and PVC and the more widely-used engineering materials like ABS and polycarbonate, said Stanley Cheung, an industry executive and convener of the working group that organized the center.

But if Hong Kong companies can upgrade their processing techniques and become more familiar with advanced materials such as polysulfone, polyetheretherketone or liquid crystal polymers, they can move into more lucrative markets, said Cheung, the general manager of Shenzhen, China-based hot runner maker Micotec (Shenzhen) Ltd.

Most Hong Kong plastics firms have shifted their factories to mainland China over the last 30 years and relied for too long on low-cost labor as a competitive advantage, said Cheung.

‘’When they moved to China they enjoyed the life of low labor costs, so this is why people did not emphasize technology,’’ said Cheung. ‘’But as you know the cost in China is no longer cheap.’’

Labor costs in Chinese factories have been rising about 15 percent for the last few years, and are likely to continue at that same pace for the next several years, industry officials said.

One Hong Kong business group estimated last month that 2,000 Hong Kong-owned factories in South China could close by the end of the year because of rising wages and weak export markets.

The focal point of the new center’s efforts to fight that is its materials database, which is available for public use at the facility, in the headquarters of Hong Kong’s Vocational Training Council in the Kowloon Bay neighborhood.

In addition to technical information on material properties and molding conditions, the database also has information on whether there are local suppliers of the resin, Cheung said.

The database is designed to be easy to search, for example by material type, trade name or manufacturer, he said. The center also contains sample displays of Hong Kong companies and other reference materials.

Locky Chu, the chairman of the VTC’s Plastics Training Board and director of mold maker Henmy Industries Inc., said the center will also help educate younger workers and give resources to universities and technical schools.

If organizers get positive feedback, they will look to expand the center, possibly by putting its database online or creating networked access, said Cheung, who is also vice chairman of the VTC’s Plastics Training Board.

One plastics executive attending the opening said efforts like the center are needed because Hong Kong is at risk of losing some technical skills.

Bernard Ting, chairman of the Hong Kong Toys Council and a senior executive at plastic molder Qualidux Industries Co. Ltd., said that’s partly because young people don’t see manufacturing as a ‘’glamorous’’ career.

‘’Hong Kong has suffered a shrinkage of technical skills,’’ said Ting. ‘’All over the world people will recognize we need industry in certain cities to sustain employment.’’

A little more than half of the budget for the center came from the Hong Kong government’s Small and Medium Enterprise Development Fund.

Other contributions came from the VTC and from industry, including a total of HK $100,000 (US $12,900) from three local firms – Micotec, Microban International (Asia) Ltd. and United Overseas Enterprises Ltd. – and the Hong Kong Mould and Die Council.

The project also had support from the Federation of Hong Kong Industries.