The development of The China Paint Manufacturing Company. Part II: Set up factory in China, Dismissal of Hong Kong production line and Improvement of revenue

In 1981, The China Paint Manufacturing Company established a processing factory in China. In 1993, the production line began to be relocated to China stage by stage. In the 1980s, during every Chinese New Year most of the buildings in Hong Kong would be renovated, resulting that the demand for small cans of paint increased. Therefore the company produced and kept a large storage of paint in the factory. The factory could not keep a big storage due to the lack of space as well as the increasingly stringent legal restriction against storage of dangerous chemicals. As a result, the company set up a processing factory in Nantou as a storehouse of the dangerous chemicals. In 1986, the company established a joint venture between the state and the company at Xixiang to produce wood nitrocellulose paint. Compared to other types of paint, nitrocellulose paint was more dangerous as it easily caught fire. The company closed the Xixiang factory in 1996.
When the company’s customers relocated their factories to China, the company made the same move. Initially Paul Lam did not want to run production operation in China, as there were not enough qualified and capable technical personnel there. Finally the company made the move to China because it wanted to provide more efficient and customized service to its customers in China, to shorten the delivery time and to skip the tax of importing materials.
Some of China Paint’s former employees formed their own companies in China. Some of these companies undertook the same kind of business as China Paint and served the same group of China Paint’s customers. Paul Lam cited one example that a former employee who came from Guangdong Province and managed the marble section of China Paint, later set up a new company doing the same type of work as what he did in China Paint.
In July 1st, 1993, China Paint officially stopped the production operation in Hong Kong. In so doing, several months before the stoppage, China Paint recruited and trained workers in the two processing factories in China.
At the peak period, there were over a hundred workers at the Sai Kung factory, and around a hundred workers at the Kwun Tong factory. There were about 300 workers in the China’s plant at the beginning. Now, together with the sales people, there were a total of 500 workers. More workers were required for producing paint for toys. If China Paint gave up production of paint for toys, it could reduce the labour force. To set up production facilities in China, the company relocated the machineries that were still working properly from the Hong Kong’s factory. In addition, the company also installed new equipment in the new factory premise in Shajing, Shenzheng, which was the current factory premise of China Paint.
At the beginning when China Paint started up production in China, it arranged some 20 people from Hong Kong to stay and work there. They were supervisors and engineers. Now the Hong Kong group was reduced to less than 10 people. As most chemists refused to work in China, now only a few chemists remained. Throughout the relocation process, around one hundred workers in the Hong Kong factory were laid off. The company provided compensation for all dismissed workers. China Paint used to provide pension to its workers. The relationship between the company and the workers was good and the workers would organize activities after work.
China Paint had to recruit new workers for the factory in China. Some workers were transferred from a joint venture between China Paint and a state-owned chemical company in Xian. Every two years, this company would transfer its experienced and skilled workers to the factory of China Paint in China. Under economic reform, some of the workers from the joint venture remained with the company.

Company China Paint Mfg. Co. (1932) Ltd.
Subject Industry
Duration 17m41s
Language Cantonese
Material Type
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. JL-PL-LIFE-004
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