Development of Yangtzekiang Garment Mfrs in 1950s and 1960s: Factory, Labour, Product, Market
Yangtzekiang Garment Mfrs was founded in 1949 and its factory was located in Cheung Sha Wan, near to the Hong Kong Spinners . The factory had 50 to 60 staff members when founded. Paid with 2 to 3 dollars a day, a seamstress worked 10 hours a day, 7 days a week. A supervisor (also called ‘dispatcher’ or ‘captain’) was paid 20 dollars a month and was provided with meals and accommodation. The factory manager only got 150 dollars a month. S.K. Chan sighed that the wages in those years were very low. Procedures such as fell seaming and pocket stitching were done by seamstresses while collar sewing were performed by skilled male sewers. That was an old practice of the trade. S.K. Chan had taken quality very seriously since he operated the company. He required precision in procedures like ironing and was very strict with the ironers. He once overheard a worker groan that Yangtzekiang was such a tiny factory that its full size could not even compare to that of an ironing department of some larger factories like Kwong Hing Tai Garments Factory Co., Ltd and Kwong Loong Tai Garments Fty., and so they should not take their work too seriously. Since then, S.K. Chan had determined to make progress in order to overtake Kwong Hing Tai and Kwong Loong Tai in production size. In the early 1950s, South East Asia was Yangtzekiang’s major market. Their shirts that carried the label DOCTOR were sold well in Singapore and Thailand. The fabrics used by Yangtzekiang were mainly imported from Japan then. Yangtzekiang also set up cloth shops in Singapore and Thailand. These shops run by the family acted as sales agents for Yangtzekiang products. Local salesmen were hired to promote their products. Since Yangtzekiang went public in 1970, the Chan family had sold out part of the company’s shares, but still held a significant share of the company. In the late 1950s, Yangtzekiang successfully tapped into the US and European markets. A German company became their first client, and the DOCTOR brand had receded as their secondary business since then. Yangtzekiang relied on foreign trading companies such as Melchers in taking orders. Clients submitted samples to the factory, and the factory produced finished goods accordingly. Yangtzekiang subsequently tapped into the British market via Dodwell Trading Company. Littlewood became one of their major clients. In the early 1960s, Yangtzekiang opened an outlet in the USA, a pioneer in the Hong Kong garment industry. Workers of Yangtzekiang possessed sewing skills well above international standard, but product quality was subjected to company decisions, for example, at times when shipping schedule was tight, the company had to compromise product quality to meeting deadline. In the early 1960s, Yangtzekiang expanded rapidly by setting up operations s in other districts such as Cheung Sha Wan, Sham Shui Po and Mongkok. The production lines at Mongkok Road were the main force. In 1965, Yangtzekiang moved to the current address at 22 Tai Yau Street, San Po Kong. The site was put on public bidding at a reserve price of 6 dollars per square foot. Yangtzekiang tendered the site with a price of 60 dollars and an additional building charge of 20 dollars per square foot. The labour force in the Tai Yau Street factory once reached 3000 in number. Now only 70 to 80 workers remained as most production lines have been shifted to other places.
Yangtzekiang Garment Mfrs developed production lines for suits and explored American market
Yangtzekiang Garment Mfrs first made shirts, and then produced trousers and outer garments. In the early 1960s, Yangtzekiang developed suits business, the first of its kind in the local garment manufacturing industry. In those years, suits were usually tailor made but not produced by garment manufacturers. Amidst the Asian garment manufacturers, South Korea took an early step to produce suits for exporting to the USA. In order to expand his business, S.K. Chan hired a skilled master from the USA and set up production lines for suits. The master came from a US garment factory and was paid 700 dollars per day by Yangtzekiang, earning over 20 thousand dollars a month. In contrast, S.K. Chan was just receiving a monthly salary of over 1000 dollars as a managing director. In addition to the American master, Yangtzekiang also had local tailors as consultants. The making of suits differed from that of shirts and trousers in the procedures of collar tailoring and buttonhole opening. Yangtzekiang opened a suits department in its Mong Kok Road factory. Machines specifically used for making suits were bought. Sewists were re-trained. A suits outlet was set up in Entertainment Building in Central and salespersons were hired to promote the suits. Meanwhile, S.K. Chan was developing the US market. He adopted his salespersons’ suggestion and opened an outlet in the USA, becoming one of the first Hong Kong manufacturers selling garments in the USA. Thanks to the success of their outlets in the 1960s, Yangtzekiang created their own brand Michel René, and then went all out to acquire famous fashion brands in the USA and Europe, creating a flourishing retail business.
Production relocation of Yangtzekiang Garment Mfrs in 1980s and 1990s
Hong Kong's garment manufacturing industry reached its peak in the 1970s and 1980s. In that period, S.K. Chan worked with Lam Kan-shing in Hong Kong Garment Manufacturers Union, where he had held office of Vice-president and President successively for over a decade. In 1980, Yangtzekiang invested in a cotton mill in Wuxi, Jiangsu. Quite a number of senior government officials of Hong Kong and China paid visits to the mill. The mill comprised of departments of spinning, weaving and sewing . They produced fine yarns that were mainly supplied to other factories. There were 800 thousand spindles in Hong Kong when its spinning industry was in full bloom. Today, the Wuxi cotton mill already had 500 thousand spindles. In the mid and late 1980s, the USA tightened her quota restrictions on Hong Kong's garments. Yangtzekiang once set up factories in places like Cambodia, Burma, Malaysia and Sri Lanka in order to evade quota restrictions imposed by the USA. In 1990, Yangtzekiang acquired the Hong Kong Knitters Limited, a subsidiary of the Hong Kong Spinners, and started making knitted garments. Before that Yangtzekiang made only woven garments and had to outsource their knitted garments. A few months after the acquisition, Yangtzekiang moved the production lines owned by the Hong Kong Knitters Limited to Panyu, Guangdong. At that moment, mainland China managed to acquire import quotas of garments from the USA, which attracted S.K. Chan to move his garment production to the mainland. Prior to its acquisition by Yangtzekiang, Hong Kong Knitters Limited, a fully owned subsidiary of Hong Kong Knitters, had already adopted one-stop production by weaving, dyeing and manufacturing garments at the same time. Its products were mainly for export and its clients included big brandnames like Burberry. Now a lot of Yangtzekiang's clients are companies with famous brandnames such as Nike, Hugo Boss and Marc Jacobs. But S.K. Chan sighed that businesses are in a plight now due to the rise in production cost.
Development of Yangtzekiang Garment Mfrs from its heyday to recent years
Yangtzekiang Garment Mfrs, in their full bloom, employed 3000 workers in Hong Kong. Their factory site covered 20, 22 and 24 Tai Yau Street, San Po Kong. The site at 22 Tai Yau Street was bought first, followed by the blocks on its two sides. One of the blocks was bought from Chen Ding Hwa for 6 million dollars and was also a garment manufacturing plant. Apart from garment manufacturing, Yangtzekiang also set up a printing house in Tai Yau Street for the printing of banking bills and cheques. There were only 3 factories of the same kind in Hong Kong. In the heyday of the garment manufacturing industry, Yangtzekiang was running many factories both in and outside Hong Kong, and scarcely outsourced their orders. In those years, it was popular to outsource their orders among large Hong Kong garment manufacturers, especially during peak season. The manufacturers mapped out plans based on individual needs and the capacity of the contractors. Some outsourced only certain of their procedures. Sometimes the large manufacturers trimmed their fabrics before transferring them to the contractor. Upon collection of the finished goods, they had to iron them again for the sake of quality. Nowadays, Yangtzekiang’s factories on the mainland normally practise outsourcing. Many contractor factories in Dongguan and Panyu take orders from Yangtzekiang. Yangtzekiang has now two subordinate companies, namely, YGM Trading Limited and Yangtzekiang Garment Limited. The former focuses on retail and branding businesses, while the latter produces garments. S.K. Chan worried that the constantly rising labour cost on the mainland would devastate the garment manufacturing industry, and many Hong Kong-owned factories’ time was drawing near. The social security for mainland workers increases each year by 15% and has now amounted to 700 dollars. It is expected to be over a thousand dollars next year. The labour cost also includes provision fund and housing. S.K. Chan thought that the situation was getting more and more difficult for the garment manufacturing industry.
Labour characteristics of early Yangtzekiang Garment Mfrs, Overseas Processing Arrangement modes in recent ...
Yangtzekiang Garment Mfrs employed a larger number of skilled workers in their early years. One worker could complete all the procedures involved in making a whole piece of garment. It was more demanding on sewing skills. In their bloom, Yangtzekiang employed 3000 workers and practised branched production. The work was divided up based on the type of garments and the sewing workflow. This demanded less on workers’ skills while facilitating their training by the factory. In recent years, the workflow has tended to break down into more delicate tasks. A ‘single-piece’ approach was practised. Each worker was only responsible for one single easy task. In 1967, a strike broke out in an artificial flower factory diagonal to the Yangtzekiang plant in San Po Kong. Both real and fake bombs were all over the streets, and the outside of the Yangtzekiang plant was no exception. However, Yangtzekiang was not affected by the 1967 Leftist Riot, during which their workers had worked as usual and production had not been halted. S.K. Chan thought that strikes were uncommon in his company because the workers then were mild-tempered and the influence exerted on them by workers unions were limited. Since sites were set up in South East Asia, local productions started to shrink. This trend accelerated when sites were moved to the mainland. Today, Yangtzekiang still keeps small-scale production lines in Hong Kong. Garments sewn on the mainland were received and processed by the Hong Kong site such that they will be eligible for carrying the name ‘Made in Hong Kong’ when exported, which satisfies clients’ demand on the place of origin. This production mode is called Overseas Processing Arrangement, OPA. Currently most Yangtzekiang sites are located on the mainland, but S.K. Chan thought that the red light was on for his productions due to the surge in production cost. He confessed that this was the worse of the time in his 62 years in this trade.
Diversified enterprising methods of Yangtzekiang Garment Mfrs: OEM, Brand, Retailing and Trade
Since its early years, Yangtzekiang Garment Mfrs has been taking OEM orders, which still remains the mainstream business of the company. Its major clientele comprises of such US and European brands as Hugo Boss, Marc Jacobs and Nike. In the early 1960s, Yangtzekiang already had its own retail outlet in Hong Kong, which was named Yangtzekiang Outlet. Self-designed suits of the American style were sold. A significant number of the customers were university professors. The retail outlet was in the vicinity of Entertainment Building, Wyndham Street. The rent of the store was 700 dollars per month. It has now risen to 700 to 800 thousand dollars, which is, S.K. Chan lamented, a drastic change from the past. In the old day, Yangtzekiang hired an American tailor to design suits and presented the market with ready-made products. The company broke the custom of having tailor-made suits and pioneered in Hong Kong’s garment manufacturing industry. In 1973, S.K. Chan’ daughter joined the company. Yangtzekiang took in other brands and acted as an agent for the jeans and shirts of the Wrangler brand, which was an American fashion brand. Wrangler showed sound brand effect, mentioned S.K. Chan, an unbranded shirt sold only a little more than 10 dollars but it got marked up to more than 30 dollars when sewn with the Wrangler label. The company made and sold Wrangler garments on its own, and promoted them with immense advertisements. It had Tai Yau Department Store on Nathan Road as its key sales office. Yangtzekiang mainly made shirts, trousers and suits and produced fewer jeans in its early years. Knitted products were then introduced and were outsourced to contractor factories. It was not until the acquisition of Hong Kong Knitters Limited had the company self-produced knitted shirts. Yangtzekiang’s primary products were of the middle to high class. In 1977, in view of the fast sale in the suits store, the company created the Michel Rene brand that carried a pronounced French style to meet local customers’ fancy to foreign things. This even greatly impressed veteran Ann Tse Kai of the textile industry. The Michel Rene brand has been handled by S.K. Chan’s daughter since its birth. In recent years, Yangtzekiang has put great efforts into the branding business by successively acquiring old European fashion brands such as GuyLaroche, Ashworth and Aquascutum. GuyLaroche was a nearly 200-year-old French brand for women garments. Yangtzekiang set up an office in France to seek out brand representatives. In 2001, Yangtzekiang acquired Aquascutum, a brand that yields the best in the meantime for Yangtzekiang. As for Wrangler, its products were sold at quite low prices and Yangtzekiang eventually gave on the dealership for this brand. In the early 1990s, Yangtzekiang shut down its factories in South East Asia one after another, and turned to the trading of mainly low-class garments. The turnover of sales has now exceeded that of manufacturing.
Product and Market of early Yangtzekiang Garment Mfrs, Operation of OEM Model and OEM Customers
In its early years, Yangtzekiang made DOCTOR branded shirts in large quantities to be exported to South East Asian countries, where representative offices were set up by itself for product promotion. The company subsequently took orders from Germany via Merchers Trading Co. Soon after that cooperation with German representatives was developed. S.K. Chan traveled to different places in Germany to promote his products himself. Yangtzekiang already took part in fashion shows held in England and Germany in the early years, setting up booths in the exhibition theatres to display the major types of garments produced by the company. Since its founding, Yangtzekiang has been relying on OEM orders as its prime business. Its clientele over the decades has included Marks and Spenser, Littlewood and Nike. Littlewood had been Yangtzekiang’s biggest OEM client in the 1970s, standing for one third of Yangtzekiang’s turnover volume. Yangtzekiang was Littlewood’s sole agent in Asia. Littlewood was even larger than Tesco in those days. Yangtzekiang had offices in the USA and Europe. Salespersons were hired to take OEM orders. Its clients were allowed to choose the products from the catalogues provided by the company.
Hong Kong delegates in international textile quota conferences
"Between the 1970s and 1980s, the Hong Kong government had sent delegates to sit in different international business conferences and negotiate with the European Union and USA on textile quotas. The delegates were headed by Deputy Director-General of Commerce and Industry Department, who was Chief Negotiator. In those years Director-General of Commerce and Industry Department was a senior official of the same rank as today’s department secretaries. Commerce and Industry Department answered to the three Secretaries of the Hong Kong government. Both the director and deputy-director posts were taken up by westerners. WK Chan was most impressed by Lawrence William Robert as a leader of the delegates. Lawrence William Robert was Chairman of TDC afterwards. WK Chan regarded Commerce and Industry Department as a cradle of senior officials. Many political stars were once deputy-directors of Commerce and Industry Department, for example, Donald Tsang, Regina Ip, John Tsang, Michael Sze and Chan Cho Chak. When Commerce and Industry Department went for negotiations, members of Textile Advisory Board (TAB) were also invited to the meetings to provide immediate advice. TAB members were appointed by the government. They came from both the industrial and commercial sectors as the quotas were allotted to trading companies and textile factories in equal halves. One of the more famous members of the commercial field was Lydia Selina Dunn, representative of the Swire Group. She later held office in Legislative Council and Executive Council. She even became a member of House of Lords, thanks to Mrs Thatcher, Prime Minister of the United Kingdom. Early TAB members representing the industrial field included YL Yang, Jack Tang, Henry Tang, SKChan, WK Chan, Francis Tien, James Tien, Christopher Cheng, John Chow, Lam Kan Shing, Kenneth Fang, William Fung, Frank Lin, Willy Lin, Andrew Leung, Stephen Cheong, Eleanor Wong and others. TAB was the first consultant body of Hong Kong’s industrial field. It had exerted a huge influence on government policies between the 1960s and 1970s. Quite a number of the then TAB members were now influential figures. WK Chan once represented the Macau government in quota conferences in the early period. The Macau delegates comprised of Susana Chou, Francis Tam, Sammy Liu, Victor Ng and others. They were now the upper class of Macau. Some of the representatives of Macau’s industries were recommended by trade unions while some were appointed by the government.
Role played by Hong Kong representatives in international textile quota conferences
Textile quota conferences were convened by Asian export countries and European/US import countries. Official were sent for negotiations by different governments. Manufacturers from the export countries stood by to give advice. The negotiations were held between countries. The Hong Kong delegates played a leading role among the Asian countries. Many Hong Kong manufacturers had plants in Macau, Singapore, Malaysia, Thailand and other places. Their representatives of the textile industry were mostly Hong Kong manufacturers. The quota conferences were in one way a meeting of Hong Kong’s textile families. WK Chan exalted colonial Hong Kong’s senior officials as outstanding negotiators. Examples included Tony Miller, Chan Cho Chak, Chau Tak Hay, Donald Tsang, Yue Chung Yee, Regina Ip. The Hong Kong government stuck to Bilateral Negotiation principles and demanded the USA comply to the GATT rather than bullying the Asian countries with her power, or else she should resign from GATT. Hong Kong’s senior officials made themselves equal to the US part. They once successfully turned down a request from US companies to inspect the factories in Hong Kong. The manufacturers acted as consultants during the negotiations. Many Hong Kong manufacturers had plants outside Hong Kong and were a good source of information for the government. WK Chan had high praise on the open-mindedness of Hong Kong officials. They followed the mainstream when collecting opinions and so managed to execute the final plan. In retrospect of the rise of Hong Kong’s textile industry after the WWII, WK Chan deemed the key factor to be the Chinese political turmoil. It caused an influx of capitals, skills and labours into Hong Kong, which formed the foundation of Hong Kong’s prosperity when circumstances arose.
Customers of Tai Hing Knitting Factories, Upstairs home garment factories in Sham Shui Po, Squatter garmen...
Tai Hing Knitting Factory's major customers were garment factories of two categories: production for local demand and production for export. Squatter garment factories in Sham Shui Po and Cheung Sha Wan were mostly manufacturers for local demand. Rather than producing on demand, these factories made garments and waited for fashion retailers to pick and purchase the finished products. The retailers were usually the boutique operators at shopping malls and did not have their own production line. To replenish best selling fashion items that ran out of stock, retailers would sometimes visit garment factories in person, waited by the side of the garment workers and pick the products as soon as they were finished. As local garment factories produced goods before selling them, they had to bear the risk of losing money if the products did not attract attention. For this reason, most local garment factory owners had a good eye for fashions that could sell. Alternatively, such owners would only produce a small quantity first and test it out in the market. If sales were good, garment factories would be attracted to place orders. Some squatter garment factories also handled garments servicing orders from European and American customers placed through trading companies. In those years, small local and export garment factories tended to concentrate in particular districts. The majority were later relocated to the mainland. Those still having local production were spread to Tsuen Wan, Kwai Chung, Kwun Tong and other districts. In the 1980s, Nam Cheong Street and Yu Chau Street had high concentrations of squatter garment factories. Many manufacturers set up their factories upstairs in residential buildings resulting that sewing workshops were spread on different floors. A typical squatter factory consisted of a team of husband and wife working at home with a few workers and several sewing machines including overlocker types. All garments produced were then placed in the same premises waiting for wholesaling. Operators of retail stores knew the address of these upstairs workshops and would go there to select and buy goods from there directly. Between the 1980s and 90s, wholesale fashion factories were Tai Hing's major customers, accounting for around one third of its knitting factory’s turnover. Since China’s economic reform and the adoption of open policy, these upstairs factories had moved their production to the mainland. The 1980s were booming years for Hong Kong’s garment industry. During this period of time, squatter factories which had already relocated to the mainland set up outlets in Hong Kong to display their samples in the ground floor shops on Cheung Sha Wan Road and Castle Peak Road in Lai Chi Kok. They also established offices at the back of their shops to make it quicker and easier for customers to place orders. After the squatter factory outlets moved to street-level shops, their customers were no longer limited to local buyers. Buyers from Africa and Southeast Asia also came to select goods and place orders. These street-level outlets were a convenient trading ground where buyers could find garment manufacturers and instantly select goods and place orders. A ground floor shop also made the mainland manufacturers look more reliable by enabling customers to keep in contact with them in Hong Kong after placing orders. Rents for street-level shops were expensive, with large shops often attracting tenants who were willing to pay over $100,000 a month. As a result, they only engaged in export wholesaling and not garment retailing. The early 1990s were good years for Hong Kong’s knitting industry. Having studied foreign magazines to learn about popular fabric types, Au Kwan Cheung began to develop stretchable fabrics, send small quantities of these cloths to dyeing factories for dyeing and finishing and then market them to fashion garment factories. New fabric types were mainly promoted to the local market. Fashions made with new fabric materials could be sold immediately at street-level outlets on Cheung Sha Wan Road in Sham Shui Po. Such a practice enabled the quick testing of market responses. If marketing was carried out overseas, there was no such convenience for a local manufacturer like Au Kwan Cheung to test out his research outcome.
