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Policies on sewage treatment and decline of dyeing industry. Review on the post-war development of dyeing industry in Hong Kong
The high cost of sewage treatment was only one of the reasons why dyeing factories had to shut down.In terms of environmental protection and social responsibility, though sewage treatment would add on the cost of production, China Dyeing Works was still engaged in better treatment of the sewage the company discharge. The cost of power was getting higher and higher. Before 2000, the company's production volume was high so sewage discharge was also high. The company believed it was still cost effective to treat its own sewage. However when production volume decreased, maintaining its own sewage treatment became less cost effective.
China Dyeing Works had two options. According to the license agreement, if the sewage discharged was qualified to a certain standard, then the licensee can discharge a certain volume of sewage. For instance, if the COD of the discharged sewage was below a certain level, then the licensee would not be required to pay the sewage surcharge fee. But if the COD was above that certain level, then sewage surcharge would be imposed. China Dyeing Works had chosen to pay the sewage surcharge fee, as the company believed that it was more cost effective than running its own sewage treatment facility. Not far from Yuen Long Industrial Estate near the sea, there was the government-run Wang Chau Sewage Treatment Plant. It was a rather large facility. Since industrial production at the Industrial Estate has decreased, volume of discharged sewage also declined. The sewage treatment plant would sometimes work less than its optimum level during a week. The plant would be quite content to handle the sewage from China Dyeing Works. Since the treated sewage would be discharged to the sea through Hau Hoi Wan so decolorization involved would not be so vigorous. If the sewage was discharged to a river, then higher level of decolorization would be needed.
Factory owners were supportive to environmental protection. But during the 1993 to 1994, most of the dyeing factories were not prepared to fulfill the environmental protection policy. In the 1950s and 1960s, factories provided employment to the locals so factory owners were praised as entrepreneurs. However, they were seen as polluter around 1993 to 1994. In order not to violate the law, many dyeing factories had to be closed or relocated away from Hong Kong.
A retrospect of the development of Hong Kong's dyeing industry in the post-war period. Before 1972, and before Chan Kin Keung joined the business, he said he only knew that Shanghai industrialists came to Hong Kong because of the political change in China. Their arrival contributed to the development of local textile industry as they founded spinners, weavers and knitters as well as dyeing factories. The factories were mostly located at Tsuen Wan, Kwai Tsung and Kwun Tong, etc. Between 1974 and 1975 dyeing industry was in a slump but it rebound quickly. During the early 1980s, dyeing industry was in its boom but not many people in the business paid much attention to environmental protection. There was ample supply of workers but the requirement on quality of the products was not that high. At that time, manpower was important for the business but luckily there were a lot of immigrants from China and they provided a cheap labour force. At the end of 1980s, the government started to implement sewage discharge policy. At the beginning dyeing factories tried hard to cope with. Until 1990s when the policy was in full fledged, a lot of dyeing factories either had to close or move to the mainland. Those that moved to China could not survive for long. There were only very few dyeing factories left within the pearl delta area.
After 1994, there were only a few smaller factories left in Hong Kong. At about the same time China Dyeing Works moved to Yuen Long Industrial Estate. It was one of the very few factories left in Hong Kong. Until 2002, the company was doing alright with its business. In recent years, oil prices continued to surge, pricing competitiveness continued to weaken and competition from surrounding countries posed imminent threat to local textile industry. Even garment factories could not survive in this weather. A lot of garment factories moved to countries with lower production cost, such as Cambodia, Vietnam and Bangladesh. Hong Kong Polytechnics also stopped its training courses of textile. China Dyeing Works understood that it had to change its business approach in order to survive.For instance, it commissioned some production to other factories so as to decrease the production level of its Hong Kong factory and thus cut cost. The government did not support manufacturing industry. It did not provide any assistance to the factories to better handle sewage treatment. Fuel prices were not coping with the changing circumstances. Together with the policy of high land prices, these contributed to the decline of dyeing industry. During 2001 to 2002, China Dyeing Works went against the Department of Environmental Protection in court because the company was convinced that the Department had procedural problem with taking samples of sewage. Eventually the court ruled in favour of China Dyeing Works.
Interviewee Chan Kin Keung Company China Dyeing Holdings, Ltd. Date 1950s-2000s Subject Industry Duration 13m49s Language Cantonese Material Type Audio Collection Post-war Industries Source Hong Kong Memory Project Oral History Interview Repository Hong Kong Memory Project Note to Copyright Copyright owned by Hong Kong Memory Project Accession No. AY-CKK-SEG-006 
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The founder of The China Paint Manufacturing Company, Lam Kwan, native of Taishan, had good academic performance in his early age. He had studied in the United States. While Lam was studying in the U.S., he not only worked in farms picking up fruits but also taught Chinese classes for Chinese-American. He graduated from Brooklyn Institute, New York, while the U.S. was hit by the Great Depression. He recommended himself to a paint manufacturing company and got accepted. Another founder of The China Paint Manufacturing Company, Lam On, the father of Paul Lam and the brother of Lam Kwan, had studied in Guangzhou Lingnan Secondary School and Pui Ching Middle School.
After Lam Kwan returned to Hong Kong from the United States, he founded a small paint factory (The China Paint Manufacturing Company) with his brother, Lam On. Since Lam Kwan had received education on chemical engineering, he brought related skills and knowledge to the factory. At the beginning, the factory produced metal paint and wood paint. The National Lacquer and Paint Products Company were separately founded in the same year (1931).
The China Paint Manufacturing Company had a limited capital to start with; the founders collected the capital from their family while there were only 6 employees. During the Japanese Occupation, the production of The China Manufacturing Company stopped. Lam Kwan turned to produce and sell peanut candy in Liuzhou, Guangxi to sustain his living. In 1946, The China Paint Manufacturing Company was re-registered and the founders raised more fund by selling shares. However, the company scale remained relatively small.
The paint production technology was not advanced in the past. The government did not have strict safety requirements on either paint factories or paint products. The workshop of China Paint had limited facilities, it used cooking pot to boil oil and rarely maintained the machinery. The China Paint Manufacturing Company built a 3 level factory at Arran Street, Mong Kok. The ground level was the production shopfloor, the second level was office and store room for raw materials and solvents, the third floor was the living place for the Lam’s family. Paul Lam had lived in the third floor after Lam Kwan had moved out. Since the paint production process required boiling oil, which is a relatively dangerous procedure, the company rented an open area at Tai Kok Tsui to conduct the process. There were a public playground and a men’s dormitory near the factory at Arran Street. The China Paint Manufacturing Company had established the workshop at Arran Street at the time when Paul Lam was in kindergarten. Male workers were responsible for production processes while female workers were responsible for packaging. Accommodation was provided for male workers only.
Other than Paul Lam, Lam Mo Bill (The son of Lam Kwan), was also the second-generation successor of The China Paint Manufacturing Company. Paul Lam graduated from the University of California, Berlekey with Chemistry major. Lam Mo Bill graduated from Stanford University with Chemistry major too. Since there was no specialized discipline on paint technology in the universities, the only way for people to learn about paint was to study chemistry and to take courses that had contents of paint, such as polymer chemistry. Usually, paint companies would obtain knowledge of paint technology by setting up licensing arrangements with foreign companies. In 1965, The China Paint Manufacturing Company employed the first chemist.
After Paul Lam graduated from university, he had worked oversea for seven years. During that period of time, The China Paint Manufacturing Company had planned to take over a joint venture in Singapore, to improve the unsatisfactory performance of the company. Lam Kwan and Lam On invited Paul Lam to manage the company in Singapore. In arriving at Singapore, he found that the business was not a good investment, he decided to forgo the take-over and returned to Hong Kong. Although paint industry is one kind of chemical industry, Paul Lam considered himself know little about paint. Initially he had no intention to stay and work for the company. Not long afterwards, Lam Kwan died of heart disease. Paul Lam had worked in Hong Kong for less than a year and then returned to his previous employer in the United States. Under the urge of the family, he eventually returned to Hong Kong to help with the family business.
The Lam’s family used to respect the individual interests and initiatives of the younger generation and seldom imposed pressure to the descendants to inherit the family business. For example, all the children of Paul Lam did not major in science specialties and he didn’t plan to arrange his children to be successors.
Paul Lam had studied in La Salle College and then changed to Diocesan Boys' School at Form 2, where he studied until graduation. Since his parents had little knowledge about studying abroad, Paul Lam himself gathered information from his teacher and sent out an application to The University of California, Berkeley. He was admitted and left for Berkeley in early 1962. There were a good number of graduates from Diocesan Boys’ School to study abroad.
Paul Lam did not have particular expectation about his future after graduation. He had a lot of interests and activities and work was only one of his concerns. At that time it was not difficult for one to find a living in the United States. Therefore, Paul Lam did not worry about his career future. Upon graduation, he joined the Specialty Gas industry, which was a challenging industry that provided him with great satisfaction. He witnessed the rapid growth of the electronics industry in the 1970s. At that time, electronic companies like Pioneer and Dupin applied a special poisonous gas rather than atomic particles to produce chips for the brands’ circuit boards.
The company he worked for was a material supplier for electronic companies. In 1969, his company supplied the disinfection gas to the American astronaut Armstrong when he returned to the Earth after landing on the Moon. It was common for the American hospitals to use the same disinfection gas. In 1970s, he was relocated to Los Angeles, a city which was faced with serious air pollution. His company provided gas for General Motor to detect the gas exhaustion level. His company also produced heavy water, a material for producing atomic bomb. The production of atomic bomb was a dangerous industry as carbon monoxide was emitted as a by-product. When he was the Chemist of the company, Paul Lam had witnessed explosion in the company. Therefore Paul Lam was experienced in managing accidents and hazards in the paint industry. Back in the U.S., Pau Lam was promoted to branch manager since he showed good performance in handling an accident caused by hydrogen chloride in the Intel Corporation. He was then the youngest and the only expatriate branch manager of the company.
The Lam’s family had urged Paul Lam to return to Hong Kong several times. He made such move after he had obtained the resident identity (literally called Green Card) after marriage. To maintain his resident status in the U.S., he returned to the U.S. after he had worked in Hong Kong for around one year. To make good use of his mobility, the Lam’s family arranged Paul Lam to for Sherwin Williams, which engaged in a partnership of technology transfer with China Paint. Sherwin Williams was the largest paint company in the United States. Paul Lam was employed as a salaried technician for 9 months. He was there to learn the skills necessary for producing the brand name products under China Paint. The two companies signed a 10-year partnership agreement for technology transfer. China Paint was allowed to use the technology and the brand name of Sherwin Williams to produce paints in Hong Kong. Because of this partnership, the production technology of China Paint was improved. Paint companies needed chemists to produce paint and made adjustment according to client’s request. However, Paul Lam believed the company could not rely on the paint manufacturing formula only. Fulfilling the need of customers and providing quality customer service would also be important. The marketability of paint products relied on proper chemical formula, sale network, adequate combination of materials and the skill knowledge of technicians. Therefore, instead of focusing on chemical formulas, China Paint employed consultants to teach its staff with the chemical knowledge and properties of paint materials.
After Paul Lam left Sherwin William, he returned to China Paint and worked at the Kwun Tong factory. At first, he engaged in the administrative section to improve the company’s work environment, efficiency, labour structure and promotion system. Then, he worked on market research, doing analysis on the market shares and profit margin of the company and its competitors.
The development of The China Paint Manufacturing Company (Part I): Plant, products variety and industrial paint expansion
In the 1970s, there were six major paint factories, Kin Kwok Lacquer Manufacturing Company and several small factories in Hong Kong. The market competition was intense. China Paint had two plants in Kwun Tong, one of which was built by the company. It was a 6-level building of 40,000 square ft. The factory moved to Sai Kung later, which had a total area of 160,000 square ft. Nowadays the company had a factory in Shenzhen with a total area of 58,000 square meters, which was still not sufficient for operation. At the time when Paul Lam started to work for the company, the sales figures were only of 8 digits. In terms of market share, the company was the smallest among the major paint factories, with National Lacquer and Paint Products Company being the largest among all. Nowadays the China market contributed 90% of the company’s sales.
The company’s products used to be exported to overseas markets. In the 1970s, as many of these import countries imposed various kinds of import restriction, China Paint began to develop local market. At that time, Hong Kong’s industries was growing rapidly. With the help of foreign companies, Paul Lam and his cousins switched to produce industrial paints. In the early stage of China’s economic reform, the company started to relocate its production to China, which led to an increase of orders from the industrial sector. The company’s industrial paint could be used for producing rattan, electronic fans and toys. Types of toy included metal toy cars, both soft and hard plastic toys and PVC dolls. Different types of toy required different kinds of paint. The paints for toy were mostly classified into the followings: paint for metal, paint for hard plastic such as Acrylonitrile Butadiene Styrene (ABS) paint, paint for soft plastic such as Polypropylene (PP) paint, Polyethylene (PE) paint and Polyvinyl Chloride (PVC) paint.
During the production of the company’s industrial paint, the chemists had to try different combinations of chemical materials in order to fit with the receptivity of different material surface. Once the chemists successfully fit a type of paint with the kind of material, they would focus on cost reduction. 30% to 40% of the company’s revenue came from toy paint, which representing 70% of the Hong Kong market demand. Paint for architectural construction composed the major part of the company’s revenue. Brand name “Flower” was specialized for architectural construction while “GIRAFFE” was specialized for paint for wood.
