Engineering Success from Hong Kong
For US-based Lanco, a designer and manufacturer of customised assembly and testing systems, choosing Hong Kong for its Asia regional base has proven to be the right decision
In Lanco Asia’s 7,000 square foot factory in Fo Tan, a lively team of mechatronic engineers and technicians are busily assembling and testing a high precision, robotic-driven assembly system for a multinational automotive components manufacturer. The machine is destined for Wisconsin, US, and a similar machine will be built for the same customer’s Shanghai facility later in the year. Another team is busily finishing the design for two big systems for another customer’s plant in Tianjin, Mainland China. Just recently, the same team of engineers has designed and built a state-of-the-art assembly line for a local airline, helping its catering branch to automate the process of food tray loading onto inflight meal carts.
For Lanco Asia’s managing director, Brutus Lo, business is thriving. “With this speed of business growth, we’re keeping pace with our offices in the US and Germany,” Lo said.
Hong Kong’s role in industrial development may be less conspicuous than its trading, finance or tourism sectors. But Lo strongly believes in the viability of high value-added manufacturing in Hong Kong, as he proudly recalls how his clients are amazed to learn their sophisticated systems are “Made in Hong Kong”.
“Manufacturing in Hong Kong no doubt carries a higher price tag than our neighbouring economies but we offer value that multinational clients are willing to pay for: high quality of deliverables, on time delivery, transparent project management, and intellectual property (IP) protection over their products/technologies, which all translate to lower project risk and higher value,” Lo said.
“We deal with advanced and customised technologies every day, for multinationals but at the heart of it we’re a traditional company that values integrity and loyalty – and that’s what we find here.” Lo particularly appreciated the mindset of young engineers in Hong Kong. “The work attitude and ethics are exceptional, and they treasure an engineering career with Hong Kong-based manufacturers like Lanco because it stretches their creativity and engineering ingenuity, yet allows them to work in their home city and stay close to their family and friends,” he added.
CEPA and IP Protection
Lo said Hong Kong had also been the company’s first choice because of its rule of law and free-port status. “We deal with highly sophisticated end-products and we need consistent and efficient access to the mechanical parts that keep our business up and running,” Lo explained.
Lanco has used Hong Kong’s Closer Economic Partnership Arrangement (CEPA) to export its products to Mainland China. “Almost all systems and component parts we produce in Hong Kong are exported to China tariff-free, either under China’s normal tariff schedule or by making use of the zero-tariff preference under CEPA,” Lo said.
He added that rigorous intellectual property protection was also essential. “Hong Kong is an ideal location to manufacture products with high technology content,” he said.
Enjoying great success in the last five years of operation, Lanco expects to post sales turnover of US$7 million in 2015, a 15-fold increase from its 2009 numbers. Lanco is also gradually moving up the value chain by shifting focus to healthcare sector clients which offer higher returns. Its confidence in the next five years’ success is demonstrated by a recent decision to double factory floor area to over 15,000 square feet and increase the number of staff by 50 percent to over 30 in the coming year.
Thursday, May 14, 2015
Further Reading (Please click here to download Acrobat Reader)
- Engineering Success from Hong Kong PDF (1.23 MB)
- Subsidiary of Lanco Assembly Systems Inc, based in Maine, with branches in Germany and Shanghai
- Provides automated assembly and test systems for automotive, consumer products, cosmetics, electronics, medical, military and telecommunications industries
- Primary customers are multinationals with high quality expectations
- Set up regional office and manufacturing facility in Hong Kong office in 2009 to serve clients in the region