Sun Kai Lit, Cliff

Sun Kin Chao, born in 1917/1918, native of Ningbo, Zhejiang Province, was the founder of Kin Hip Metalware and Plastic Factory. He grew up in a poverty-stricken farming family. He went to Shanghai in 1930 and became an apprentice in a torch factory. With his hard work and attention to details, Sun quickly mastered the skills in making molds for torch heads production. He could precisely make the hexagonal tooling and developed himself as a tooling master after the apprenticeship. The factory was nationalized and turned into a military factory producing rifles and military kettle after the war with Japan. Having worked as secretary in the arsenal, Sun decided to migrate to Hong Kong in 1948 for new opportunities. He was initially a repair technician in a textile mill factory. Charged with the duty of maintaining textile mills and fixing parts like internal bearings, he worked with lathes, plane machines and milling machines. Next year, introduced by his native fellows, he leased a ground shop of a tenement house at the junction of Portland Street and Shan Tung Street to start up Kin Hip Metalware & Machinery Factory. This newly set up factory mainly dealt with repairing sewing machine parts and captured the hay day in textile industry at the beginning of the 1950s. Lots of textile tycoons from Shanghai arrived in Hong Kong and started up factories. Enamel was also an important industry that produced daily necessities such as hand basins, rinsing cups, food containers and buckets. There were many small machinery plants along Shanghai Street but they turned into silk shops soon.

Sun decided to pass his factory to the second generation, Sun Kai Lit, in 1984 and migrated to Australia with his wife. Sun Kai Lit further developed the factory into one operated by modern management. His decentralized management, turned the business into a success and improved staff commitment and responsibility with training so as to pave way for future expansion. He then raised a construction loan from banks for setting up a new factory on a carefully selected site in Pinghu, Shenzhen in 1989. Existing machineries were moved to China while new ones were purchased. The new factory commenced operation in 1992 and the loan raised was completely settled in 1996. Not a labour intensive factory, Kin Hip recently focused on technological development while emphasizing high end products and promoting the brand Kinox (which was registered in 1980), in order to secure higher profit margin with value-added products.

Kin Hip Metalware & Machineries Factory was set up at Portland Street, Mongkok, in 1949. Between 1949 and 1953, Kin Hip operated like an engineering company. It made tooling for pot handles for aluminum pot factories, replaced machine parts for other factories, and offered unique prototypes. Sun Kin Chao lived at Chi Kiang Street in 1949, and later moved his home and factory to Soy Street. In 1953, the year KL Sun was born, Kin Hip also made simple plastic products such as small cups, round combs and hair slides. In 1957, for expansion, Kin Hip’s factory was moved to a vacant lot next to Sung Wong Toi (currently occupied by Mechanical and Mechanical Services Department at Old Kai Tak Airport), where the factory stood alone and saw nothing else of the same trade. The Suns moved their home to Junction Road. Sun Kin Chao built the factory with metal sheets on the vacant lot. Occupying an area of nearly 20,000 sq. ft., the factory came with such equipment as lathes, milling machines, planing machines and ‘monkey machines’ (manual clamping). A workforce of 200 to 300 were employed. The numbers of male and female workers were more or less the same. Male workers did the heavy work of tooling, machinery repair, electroplating, etc, while female workers assembled products such as bicycle horns. The factory hired tooling apprentices who learned about machining and machine repairing. Kin Hip tailored its tooling to its production needs. Metallic decorative lines were plated on plastic products. It also took orders from aluminum pot factories that required electroplating or anodizing of their products such as spittoons.

By the late 1950s, Kin Hip had managed to produce double-layered thermo mugs that combined practicability and artistry on both the inner and outer surfaces. In 1960, Kin Yip moved to Kwun Tong as the government forced the Sung Wong Toi factory to move elsewhere for the expansion of Kai Tak Airport. Sun Kin Chao bought the lot at 30 Shing Yip Street with compensation and built a factory with high ceilings and a pyramid metal roof. Next to it a two-storey concrete building was erected. Its ground floor was deployed as office and sampling room. The upper storey was used as apprentices’ dormitory and warehouse. By 1960, the government had not yet introduced seven-storey public industrial buildings in Kwun Tong. The buildings around Kin Hip were mostly shorter ones. Upon relocation of the factory, the Suns bought a car to commute between home and the factory. The Sun couple spent most of their time in the factory and had their children taken care of by relatives. The family had a gathering every Wednesday and Sunday. In the 1960s, Reclamation Street and Shanghai Street had lots of hardware shops selling metal materials such as stainless steel strips.

Sun Kin Chao, founder of Kin Hip Metalware & Plastic Factory, came from Shanghai to Hong Kong in 1948. He first worked as a mechanical technician at a factory. In 1949, at Shantung Street, Mongkok, he set up Kin Hip Metalware & Machinery Factory, which repaired machines and made metal tooling of pot handles, pot knob, pot spouts and others for enamel factories and aluminum pot factories. In 1953, Kin Hip started producing utensils and tools such as little red cups for ritual worshipping, screwdrivers, bike horns, plugs of fluorescent tubes by combining metal and plastic materials. Kin Hip had been relocated at Soy Street and Sung Wong Toi in the 1950s. In 1960, it moved to Shing Yip Street, Kwun Tong, producing plastic mugs and water bottles. In 1964, Sun Kin Chao bought land and built a factory at Hung To Road, Kwun Tong, where he started making metal containers.

In 1967, Kin Hip introduced stainless steel kitchenware such as cutlery, trays, butter trays, toast racks, and salt and pepper shakers. In 1979, Kin Hip’s cookwares were available in the market. Kin Hip kept improving its production technology, product variety and outlook design. A built-in thermo conducting layer was added to a newly designed, dumbbell shaped pot with burnished ground glass. In 1996, Kin Hip introduced electric kettles, coffee pots and other electric appliances that incorporated streamline designs and retractable handles. In the 1950s, metal products made in Hong Kong included scissors, screwdrivers, rinsing mugs and others. Manufacturers often referred to overseas designs. Metal products had transformed with the trend. New products were introduced every 3 or 5 years. Sun Kin Chao, with his remarkable sensitivity in market trends, had always been able to introduce insights for new chic products with an emphasis on both quality and technological innovation. This enabled Kin Hip to maintain constant development over the decades and there were few occasions of failure in quality and production.

Kin Yip Metalware & Plastic Factory commenced productions in 1953. The very first product of the factory was a small red cup for Chinese worshipping ritual. The red cup was made of plastics, and more attractive and durable than the white porcelain cup. It became more popular in the market. This product brought the first success to Kin Hip. The factory subsequently produced circular combs, mugs, screw drivers with lighting function and thermal flasks which were exported to Southeast Asia. Between 1953 and 1964, Kin Yip's products were not directly exported to Southeast Asian countries. Sales could only be made through the franchisees in Southeast Asia commonly known as agents. These agents and their customers were mostly relatives. The former sometimes acted as a banker lending loans to the latter. Hence, most manufacturers found it difficult to adopt this mode of sales as the resale price was made anonymous.

In the early 1960s, stainless steel was a newly developed material and was widely accepted by  hospitals. Sun enjoyed the advantage of this market trend and began investigating the use of Stainless Steel in cutlery. Food trays with 2 to 3 compartments, salt and pepper shakers, ice-cream pots and other products were subsequently developed. Stainless steel was relatively harder than copper and aluminum. Both the molding and reshaping processes were more complex. Two sets of tooling might be required in order to produce a stainless steel cup. Kin Hip was the pioneer in Hong Kong’s stainless steel industry, while Chong’s Cutlery and Sunnex Products were the other two sizable manufacturers, the persons-in-charge being Chong Chung Man and Yu Da Cheng respectively. Kin Hip and Chong’s focused on servingware and tabletop cutlery respectively. Sunnex specialized in popular items by mass production, whereas Kin Hip specialized in expensive delicate products. Sun Kin Chao promoted the stainless steel products by sending samples to foreign trading firms, through which the products were exported to famous British cutlery companies such as Viners. Direct export started in 1964.

In 1967, Sun Kin Chao joined a business tour organized by Trade Development Council, and visited Sweden, Denmark, Holland and other countries. He displayed his products in the hotel room he stayed in, directly promoting them to local customers. He also bought new products from these countries, for example, trays from France and cookware from Denmark. Upon his return to Hong Kong, Sun Kin Chao looked into these products and finally developed a wine mixer made of stainless steel. He subsequently introduced more sophisticated products such as western hot pot kit and mixing bowl and spoon. Such products became Kin Hip’s leading products in the 1970s. Kin Hip adopted the mode of original design manufacturing (ODM), in which Kin Hip designed a product and then promoted it to customers. In the early 1970s, Kin Hip was once involved in original equipment manufacturing (OEM). It took from German company Wurttembergische Metallwaren Fabrik (WMF) an order of tens of thousands pieces of gravy boats. The OEM business did not last long in Kin Hip due to the following reasons: 1.  Inspection of finished goods was not standardized. The result of the inspection depended on the factory’s relationship with the inspectors. 2. Customers were fussy about the products. Sun Kin Chao preferred autonomy to dependence upon customer’s control. 3. Profit margins of OEM orders was low. In 1996, Kin Hip cooperated with a friend from the electronics field to produce 360° cordless kettles by ODM. This business subsequently shrank due to fierce competition.

Sun Kin Chao and his wife had five children. KL Sun, his eldest son, was born in 1953. His parents had the greatest expectation on him in the succession of their business. From nursery to Form 4, KL Sun had studied at Pui Ching, a well-known school with a puritan spirit. He graduated at Pui Ching Middle School after Form 4, and continued to demonstrate the school spirit of respecting his parents at all time. KL Sun worked as a part time trainee at Kin Hip Factory every Saturday since he was 13. He developed skills in using the lathe, planer and gongs bed in the tooling department. During his training, Sun recognised the industry norms and culture as well as building good relations with the workers. Upon completion of Form 4 at Pui Ching Middle School, he continued his studies at Grades 11 and 12 in Canada. Sun got outstanding performance in Physics at high school and got admitted to the Department of Physics at the University of Victoria. During his first year of study, he was asked by his father to go to the plant factory located in Germany to learn to operate the machines ordered by Kin Hip.

Sun returned to Hong Kong and joined Kin Hip after graduating from University in 1978. Sun frankly admitted that his physics knowledge did not directly add much value to his career. He had to continuously gain practical experience, for example, learned negotiation skills from his sales manager, so as to gradually take over the business. In 1978, Kin Hip’s business went well and, thanks to the hard work by Sun Kin Chao and his wife, Kin Hip's products were at a pioneering position in the industry. Relationship between employer and employees in Kin Hip was sound.  And KL Sun had been an apprentice at his childhood, so he understood staff needs well and offered them excellent employee benefits. KL Sun was a causal worker at the factory when young. After he took over, he mingled well with the chief officer and other senior staff of the factory. He did not act arrogantly because of his status, but treated everyone as part of his family. In 1992, when the Hong Kong factory was shut down, there were still lots of factory staff who had worked for some 20 or 30 years. The factory continued the process of modernization with the implementation of the latest technology when Sun's second generation took over. The introduction of Apple 2E computers and other high-tech equipment successfully improved the accuracy of cost budgeting and the calculation of raw material usage. With years of implementation, the benefits of the new business strategy were recognized by the previous management. KL Sun further said that Kin Hip’s system was already on track. "Anyone is dispensable." He said. Now, the third generation already worked at Kin Hip for a few years. KL Sun wished Kin Hip could operate with the Original Strategic Manufacturing (OSM) model in the future.

KL Sun explained how the second generation ran Kin Hip differently from their predecessor from two perspectives: product research and management culture.

(1) Product research: Sun Kin Chao relied on his own insights and judgments when introducing new products, which tended to be more profitable given the larger market and less competition in the early period. Sun Kin Chao often hung around in department stores, outlets and shopping malls to observe the different models of products available in the market. He then modified them in his own products. In 1970, with reference to two models of charcoal grill, Sun Kin Chao took advantage of their good ventilating and soot fending power and introduced a double-tray charcoal grill which sold well and remained popular till now. At the time of the handover to the second generation, the market differed from that of the 1950s and 60s. KL Sun put a great emphasis on market research and data analysis. He would never proceed to tooling and prototyping without adequate customer feedback. Recently Kin Hip introduced a cold drink cup equipped with an ice column, which could prevent lemonades from warming up again or the need for ice cubes. This product was a smash in the market. Since 1984, Sun Kin Chao had faded out of the operation of Kin Hip, yet he kept thinking about new products and occasionally inspected the factory to offer advice.

(2) Management culture: Sun Kin Chao adopted a paternalistic approach in management and made decisions with personal judgments. His subordinates, for the most part, were awed by his authoritativeness. His successor KL Sun decentralized management and involved senior staff members in the decision making process. He was revered rather than feared by his subordinates. When he first returned to Hong Kong for the succession, he spent most of his time in the workshop, urging the workers to work with enthusiasm. Now he had lessened his involvement in daily operation to facilitate the gradual participation by the third generation. KL Sun believed that he played a technical and managerial role, and was more devoted to the policy and strategy of the enterprise comparing with the first generation.

Sun Kin Chao, the founder of Kin Hip Metalware & Plastic Factory, had run the factory in a ground-level shop and lived with his family on top of it since 1949. KL Sun had been cultivated in him a strong recognition of industry through the imperceptible influence by what he constantly saw and heard since small. He studied abroad in 1970, and, after graduation in the late 1970s, returned to Hong Kong and joined Kin Hip. Having taken over Kin Hip, KL Sun emended the first-generation industrialist’s concept ‘money can only be earned if you hold yourself in charge’. He decentralized management and attracted more talents for business expansion. In 1979, Kin Hip set up its factory in the mainland, and ran its business in the form of compensation trade. It provided raw materials, machines, and management staff, while its mainland partners handled the productions and handed the finished products to Kin Hip for sale.

From 1979 to 1992, Kin Hip had set up production test points in Nanhai, Shanghai, Dongguan and Shenzhen. Pinghu was finally chosen as its base. Production commenced in 1992, the year Hong Kong production lines were shut down. The only remaining departments in Hong Kong were Shipping, Purchasing, QC, Engineering, etc. Kin Hip positioned itself in the service industry. In recent years Kin Hip focused on promoting the ‘Kinox’ brand and left the productions to the factories in Shantou, Ningbo, etc. Management duties were gradually taken up by mainland staff. KL Sun quoted a research report released by Federation of Hong Kong Industries in 2003, Made in PRD, which outlined the relocation of local industries on to the mainland over the course of the last 30 years. In 1979, Hong Kong industries employed 1,300,000 workers at their peak. In the 1990s, most of the factories moved to the mainland.

In 2003, the number of Hong Kong funded enterprises in PRD amounted to 58,500. The number of employees was 9,600,000. Nowadays, many Hong Kong funded factories on the mainland transformed and upgraded themselves by outsourcing productions procedures to processing units and focusing on QC, branding and marketing, for otherwise they could have found it impossible to survive the throat-cutting competitions.

KL Sun pointed out that in the early period of the mainland’s economic reform, Hong Kong manufacturers ran their businesses in the mainland in four major modes: processing in order, producing by sample, assembling by parts and compensation trade. Compensation trade was the earliest business mode. Processing in order came next. The two were not totally the same.

In 1979, at the invitation from Recommendation Office of China Resources Group, KL Sun inspected Nanhai, Panyu and Shunde to look for a site for Kin Hip Metalware & Plastic Factory. He finally chose Nanhai for the factory and ran it by means of compensation trade. Kin Hip provided raw materials, equipment and technical guidance, while mainland units provided factories and workers. KL Sun described that mainland factories were poor equipped for they were still using the ‘monkey machines’, which were no longer used in Hong Kong since the 1950s. That’s why Kin Hip had to provide more advanced equipment for injection moulding, stamping, electroplating, etc. When the products were processed in Nanhai, they were shipped to Hong Kong for packaging and export. In the early years of setting the factory in mainland, mainland logistics were not professional and the truck drivers hauled industrial products by poultry trucks. Kin Hip paid a monthly processing fee to the Nanhai unit and provided the equipment for a price, the ownership of which went to the Nanhai unit. The Nanhai unit assigned a cadre member as Kin Hip’s legal representative. He was a salaried factory director in name, but in reality he only dealt with the Customs, Fire Services and other government bodies. Kin Hip stationed a technical supervisor at the factory. He held the authority to manage all factory affairs. In case of fires or industrial accidents, the legal representative was held responsible criminally. KL Sun was in the opinion that a legal representative could lower the risks of mainland investments made by Hong Kong manufacturers. Kin Hip had not become a legal representative until 1992.

Later on some bad Hong Kong manufacturers forced up equipment prices (commonly known as ‘exploiting an advantage’), preying on mainland units’ earnings from the processing charges. The mainland authority concerned corrected the defect of compensation trade by introducing the three above mentioned modes such as processing by order. Hong Kong manufacturers retained their ownership to the equipment, which were lent to the cooperating units for free. The External Economics & Trading Office (EETO) verified the processing charges. Since then Kin Hip had opted for these three modes of operation. In that year Kin Hip already moved to Shilong, Dongguan. Later on PRC promoted ‘Sino-foreign Equity Joint Venture Law’, and the Shilong unit requested to become a joint venture with Kin Hip. To KL Sun, a joint venture would benefit the town’s unit in many ways, for instance, tax relief and foreign currency income. Because Kin Hip did not want to lose control, the factory moved to Pinghu, Shenzhen, where no joint venture was demanded by the local unit.

The 1989 June 4th incident became a turning point for Kin Hip’s setup of factories in the mainland. Given that many Hong Kong manufacturers retreated from the mainland, KL Sun kept investing in the mainland after discussing with his family. To KL Sun, the economic reform was the major drive for the mainland. The people there were determined to improve their lives. Mainland officials welcomed foreign investors to set up factories. The Suns founded their career both in mainland and Hong Kong. It was costly for the family a as well as their career to move elsewhere. Setting up factories in Southeast Asia was posed by problems such as cultural differences and political turmoil. On the other hand, the Pinghu Government made every effort in retaining Hong Kong manufacturers, who allowed sound incomes in foreign currency to be made by towns through processing work. Those incomes need not be paid to the Central Government. In 1989, Kin Hip kept expanding and planned to build a factory in Pinghu. Provided with a privileged land price of $100 HK dollar/sq. m. from the local government as well as a loan from HSBC, Kin Hip kicked off the construction of a new factory in Pinghu. The construction of the new factory was a huge project involving accessibilities to water, electricity and roads and the leveling of land. There were even mountains to remove. The production site, office and dormitory for workers were built during different stages.

In 1992, with the completion of the new factory and the closing down of Hong Kong productions, the majority of Hong Kong staff was dismissed lawfully while many veterans took the chance to go for retirement. Only 10 staff members remained. They were stationed in Pinghu as technical supervisors. Only 2 were left now. The period of 1979 to 1992 was a transitional period of Kin Hip’s shift to the mainland. There used to be production lines and machinery & tooling departments in both Hong Kong and the mainland. The most labour-intensive procedures were shifted to the mainland first, leaving the automated ones in Hong Kong. The departments in Hong Kong dealt with the final assemblies and the issue of origin of the products. Kin Hip was not a labour-intensive factory. The Hong Kong factory had only some 300 workers at its peak. After the shift to the mainland, the number of workers in all the factories rose to 1000 or so. Now most productions in mainland factories were outsourced. KL Sun said due to the mainland’s differences in administrative system, separation of government and party units, and the complicated structure spanning from towns to the Central Government, Hong Kong manufacturers found it hard to get used to them.