Print, TV and radio media interview Luen Thai CEO Henry Tan
Several print, TV and radio organizations have interviewed Luen Thai CEO Henry Tan. These media outlets include Apple Daily, Metro Radio, TVB, RTHK, iMoney and Economic Digest. They were published on various dates in June 2012.
The interviews focused on issues such as setting up factories in Southeast Asia, seeking opportunities in Burma, wage increase in China mainland, high cotton price in China mainland, building closer relationships with customers and reducing overlapping processes to reduce production cost, and expanding the production of accessories, among others.
Some interview highlights include below:
Garments imported from China in U.S. clothing market decreased last year for the first time in a decade. This reflects the weakening of the apparel industry in China as caused by the challenges of wage increase, taxes and RMB appreciation and other factors. He noted that overseas customers do intend to reduce production lines from China and relocate to more favorable locations in Southeast Asia. He mentioned that the delegates from Hong Kong General Chamber of Textiles Limited and the China Textile Import and Export Chamber of Commerce would visit Burma to check the feasibility of setting up factories there in June.
As for Luen Thai's production lines, Mr. Tan said 70% of it is still in China and the remaining 30% is around Southeast Asia. "As our customers require that the Group should gradually reduce the proportion of production in China, we will follow and eventually reach 50% in China, while 50% at overseas in the coming years." He noted though that setting up factories out of China is also costly and involves several million dollars. As for the export markets, he noted that the United States and Japan markets are more stable than the Europe market. Luen Thai has also begun to develop the Chinese brand of textiles and clothing.
Looking ahead, Mr. Tan believes there will be a fundamental change to human wear in the next 10-20 years in the textile and garment industry. There will be no 100% cotton clothes, instead, some new materials will be developed to replace with cotton. He also rallied for Hong Kong, the world's largest textile and garment trading center, to be at par with Taiwan when it comes to R&D.
RTHK & iMoney
In this interview, as apparel companies face wage increase challenges globally, another way to reduce cost is to work together with the customers to reduce the overlapping process in the production. Mr. Tan also revealed in these interviews that Luen Thai Holdings will also expand the production of accessories. He plans to increase the total revenue of accessories from the current 20% to 40% in the future.
As for the acquisition, Mr. Tan noted that Luen Thai Holdings is seeking opportunities in Southeast Asia, recently, Luen Thai Holdings bought some shares of a company which customers are mainly from Europe.
The Economic Digest asked Mr. Tan if there are plans to step into retail business in the short term and he said no. He explained that Luen Thai Holdings established retail business in 2007 but sold all the shares last year due to unsatisfactory results. As a result, Luen Thai Holdings won’t step into retail in the short term but will expand the Group’s business through acquisition and joint venture. Mr. Tan noted that Luen Thai Holdings is interested in acquiring intimate wear and footwear companies.
Henry Tan, CEO of Luen Thai Holdings Ltd.
Production lines of Luen Thai Holdings in China
Products of Luen Thai Holdings