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Backgrounder

Founded in 1963, Fong’s Industries Co., Ltd. (“Fong’s Industries”) is a listed company on the Stock Exchange of Hong Kong. Fong’s Industries operates as a group of companies (table I) with its subsidiaries including FONG’S NATIONAL, THEN, GOLLER, XORELLA, MONFORTS FONG’S, FONG’S STEELS and TYCON ALLOY, who are principally engaged in the manufacture and sale of textile dyeing and finishing machinery, trading of stainless steel supplies and manufacture and sale of stainless steel casting products.

The Fong’s Industries Group

It all began in 1963 by Mr. Fong Sou Lam. From the beginning the company has specialized itself in development, manufacture and distribution of dyeing and finishing machines for the local Hong Kong textile industry. In 1969, the company was officially renamed “Fong’s National Engineering Co., Ltd.”. In response to China’s launch of its economy reform and open door policy in 1979, Fong’s becomes one of the first Hong Kong companies to explore the giant textile dyeing and finishing market in China. It is a key turning point for the Group’s future development.

In 1988, the Group moved into its new Hong Kong headquarters in Tsing Yi, a 9-floor plant and office building with a floor area of approx. 16,000 m2. In 1991, the Group acquired a 120,000-m2-land site in Buji, Shenzhen (CHN) for its new production facilities, and Fong’s National Engineering (Shenzhen) Co., Ltd. were established. In 1995, the plant and the 21-floor building with office and dormitory premises were put in use. Since this time, the Hong Kong office serves as the Group’s headquarters for R & D, finance and sales.

Other important milestones are shown in table II.

Large Portfolio of Textile Machinery

Throughout its 45 years of operation, Fong’s Industries has become an international conglomerate in dyeing and finishing industry through acquisitions and its own development of machinery under such brand names of FONG’S, THEN, GOLLER, XORELLA, MONFONGS and Fong’s Water Technology. With such an impressive portfolio of product brands, Fong’s Industries has committed itself to an international focus with aim of offering one source to its customers, the so-called “one-stop-shop service” with machinery ranging from yarn and fabric conditioning to dyeing and finishing. The Group is now employing some 4,300 colleagues and serving over 5,700 customers around the world with the annual production over 2,500 sets of dyeing and finishing equipments in textile industry.
 
FONG’S NATIONAL

Fong’s National Engineering Co., Ltd. and Fong’s National Engineering (Shenzhen) Co., Ltd. (“Fong’s National”) are the Group’s flagship companies, specialising in design and manufacture of the textile machinery serving more than 10 sectors in the industry:

- Yarn dyeing: dyeing machines for loose fibres, hanks, yarn packages and warp beams;
- Piece dyeing: high temperature and atmospheric rope dyeing machinery and inflating dyeing machines as well as beam dyeing machines;
- Dryers: (fabric) pre-shrinkage (dryer) and package rapid dryers and radio frequency dryers for package, hank yarn and loose fibres; and
- Finishing: open width stretcher combined compactors.

The manufacturing plant in Buji, Shenzhen, is equipped with advanced facilities, including machines for laser and plasma cutting, computerised nibbling, forming, and X-ray weld seam inspection facility. Fong’s National is the market leader for dyeing and finishing equipment in China and has a growing market share in other regions of the world. Fong’s National’s success relies on constant innovation in product design and technology, and it is in line with the company’s motto: “A Name You Can Trust For Your Dyehouse Needs.”

Fong’s National also provides its customers with comprehensive services. From pre-sales consultancy to after-sales services and maintenance, such as workshop planning, installation consultancy, processing test run and technical training, Fong’s National offers its customers comprehensive services of the highest level.

MONFORTS FONG’S

In 1999, the Group joined forces with the leading German textile machinery manufacturer, A. Monforts Textilmaschinen GmbH & Co. KG, Monchengladbach to establish Monforts Fong’s Textile Machinery Co., Ltd. Through its subsidiary Monforts Fong’s Textile Machinery (Shenzhen) Co., Ltd., the company is specializing in assembling, manufacture and sale of continuous dyeing ranges, stenters and dryers exclusively for the Mainland, China market.

Drawn on the German partner’s advanced technology and engineering skills and taking advantages of Fong’s extensive distribution network and manufacturing know-how in China, the joint venture has experienced continuous business growth since its inception, and its average monthly production capacity now stands at approximately 20 sets of equipment.

Monforts Fong’s has received national recognition from the textile manufacturers in China for its advanced technology, competitive price and speedy technical service. Never being complacent with the great success in the last decade, Monforts Fong’s market coverage since the last quarter of 2008 extends to Southeast Asia countries; namely, Vietnam, Burma, Laos, Cambodia, Thailand, Malaysia, Singapore, the Philippines; and peripheral zones such as Mongolia, North and South Korea, Nepal. It is the goal to provide to customers with the highest quality products and the most comprehensive customer service.

XORELLA

In 2002, the Group formed Xorella Hong Kong Ltd. to acquire Xorella AG, Wettingen, Switzerland. Founded in 1971, this Swiss company is specialised in design and manufacture of steam setting and conditioning equipment for yarns and fabrics. The move marked the Group’s business stepping further toward diversification and also underlined the Group’s strategy for providing a “one-stop-shop service” to the textile industry. At Xorella AG, the employees are handling the sales and product development activities of yarn conditioning machinery in Switzerland.

Due to Xorella AG’s advanced technology and the Group’s extensive customer network and sophisticated production facilities in China, the patented indirect steaming system from the recognised market leader is now applied in more than 50 countries worldwide.

THEN

In August 2004, the Fong’s Group acquired the fixed assets, production facilities, real property and intellectual property rights of the former Then Maschinen- und Apparatebau GmbH and Scholl-Then GmbH and transferred them into the newly formed THEN Maschinen GmbH.
 
THEN Maschinen GmbH is the patent owner of the “THEN-AIRFLOW®” technology, an economically and ecologically dyeing machine operating system according to the patented aerodynamic principle. The “THEN-AIRFLOW®” series of machinery not only has the lowest water consumption, but also the fastest dyeing time. The name of “THEN” now stands for advanced dyeing technology for a quick, economic and environment-friendly operation in piece dyeing and has become “the First Choice for the Dye-houses”.

THEN Maschinen GmbH will continue to invest in R & D and to manufacture their well-accepted innovative dyeing machinery, control systems and dye house networks for the world markets in Schwäbisch Hall, Germany. The integration into the Fong’s Group offers financial security through a strong investor and opens new perspectives for the future development of the company. Both partners will complement each other in the technological development of their products and will thereby be able to offer a wider range of technologically leading products for dye houses.

GOLLER

In April 2006, the FONG’S Group has acquired the fixed assets, inventory and all intellectual property rights of former GTM Goller Textilmaschinen GmbH, Schwarzenbach/Saale (D). For more than 100 years, Goller has been one of the leaders in developing and producing and supplying the whole system of modular machinery components for individual solutions in Germany.

Under the new company, Goller Germany continues to develop and produce the textile machinery with its series of continuous washing, bleaching, mercerising, dyeing and finishing machinery for both woven and knitted fabrics. To meeting the requirements of the customers in quality, price and delivery time, Goller has founded a new production plant in Shenzhen, China in April 2007.

Drawing on Fong’s extensive distribution network, Goller recorded an encouraging sale performance and sustainable business growth in China and commits to serve the customers with quality products and excellent service to expand its leading position in the industry.

Fong’s Water Technology

In 2007, the Group founded Fong's Water Technology Co., Ltd. and Fong's Water Technology and Conservation Equipment (Shenzhen) Co., Ltd.  to provide the equipment of water treatment and reuse, based on integrated advanced technologies, in a safe, reliable, cost-effective and environmental-friendly manner. The set-up of Fong's Water Technology marks a new era of challenge and opportunity for the Group and helps to further broaden the Group's overall product portfolio with the aim to provide a total solution to our customers to achieve the ecological and economic benefits in their dye houses.

STAINLESS STEEL BUSINESS

To match the Group’s diversification strategy, the Group set up Fong’s Steels Supplies Co., Ltd. and Tycon Alloy Industries (Hong Kong) Co., Ltd. These companies have proven beneficial to the Group’s principal business.

Fong’s Steels Supplies Co., Ltd.

In 1988 Fong’s Steels Supplies Co., Ltd., a wholly owned subsidiary of Fong’s Industries Group, was founded to meet the increasing local demand for quality stainless steel materials. At that time, the Chinese economy was growing rapidly. Fong’s Steels took the opportunity to secure a solid market share by building up a strong distribution network in Mainland China, Hong Kong and Macao. Fong’s Steels also established a Quality Management System in order to provide better services to its customers, and it was certified to conform to the management system standard: ISO 9001: 2000 in 2004. The company supplies a variety of stainless steel products, including sheets, coils, plates, tubes, flats, angles, and a host of others. Moreover, it keeps adequate stocks of widely used stainless steel products in different grades to meet various customer needs.

Apart from being the sole distributor of the Finnish “Outokumpu Group” special purpose stainless steel for watchcases and watchbands in China and Hong Kong, Fong’s Steels also distributes Swedish “Avesta” stainless steel welding consumable and Finnish “Stalatube” stainless steel in South China and Hong Kong exclusively.

Tycon Alloy Industries (Hong Kong) Co., Ltd.
Tycon Alloy Industries (Shenzhen) Co., Ltd.

Tycon Alloy Industries (Hong Kong) Co., Ltd. and Tycon Alloy Industries (Shenzhen) Co., Ltd. are wholly owned subsidiaries of Fong’s Industries Group that specialise in the production of stainless steel metal castings and providing related technical services. Since its beginning in 1995, Tycon Alloy employs both investment casting (lost wax) and sand casting (resin sand) manufacturing processes. With a total monthly production capacity of 320 tons, Tycon Alloy not only provides castings to the Group but to other industrial customers all over the world.

The current major product mix comprises investment and sand castings manufactured from a variety of materials, including stainless steel, duplex and nickel-based alloy. Major applications of the casting include, but are not limited to, the following:

- Valves, pumps and related fittings;
- Components for marine, oil & gas, chemical, textile and food processing equipment;
- Structural brackets for architectural curtain wall, space frame and cladding systems.

Tycon Alloy is focussing on all aspects of its quality standards, including human resources, training, design, production standards and procedures, testing facilities and techniques, and the quality assurance system. This enables the company to secure its QA accreditation from Lloyd’s for ISO9001: 2000, TÜV Rhineland’s Certification for AD2000-Merkblatt W0/TRD100AD and PED97/23/EC. The company conforms to stringent international specifications and standards, including ASTM, BS, DIN and JIS. Lloyd’s, Det Norske Veritas (DNV), Bureau Veritas (BV) and RINA S.p.a. (RINA) have also accredited it toward its production facilities.
The future

Research and development effort is the indispensable factor for maintaining the Group's competitiveness and long-term development. At present, there are more than 140 engineers and technical specialists working in Research and Development. This group of skilled people collaborates closely on technological research projects with top universities in China, Hong Kong and Europe in order to constantly improve design efficiency and product quality. The R & D department uses advanced software design tools such as 3-D simulation, finite element analysis, computational flow and heat transfer analysis, static and dynamic structural analysis as well as specialised pressure vessel analysis and appraisal packages to enhance the product design process and technological development.

Fong’s Industries is determined to pursue its mission to focus on research and development. This will lead to a continuous delivery of the quality products with low water and energy consumption for the world markets and will maintain the Group’s leading position in the global textile industry.

May 2009

Table II: Milestones for Fong’s Industries Group

2008
Fong's Industries Co., Ltd. joins hands with the University of Hong Kong to establish the Fong's Research Centre for Advanced Mechanical Systems to support the University's applied research in advanced machineries.

2007

Fong's Institute of Advanced Materials and Processing is established.

The new manufacturing complex of Goller Textile Machinery (Shenzhen) Co., Ltd. is put into use in April.

Fong's Water Technology Company Limited and Fong's Water Technology and Conservation Equipment (Shenzhen) Company Limited are established.

2006
The Group establishes Goller Textilmaschinen GmbH to acquire the fixed assets, inventory and all intellectual property rights of former GTM Goller Textilmaschinen GmbH. This step enables the Group to offer the customers a wide range of premium machinery from the same source.

Xorella Hong Kong Limited launches a joint venture with Plexus Cotton Limited of the UK. The new joint venture company Plexxor Co. Limited is engaged in the marketing and sale of a new patented vacuum bale system.

Fong's National Engineering Co., Ltd. makes a donation of HKD15 million to the Hong Kong University of Science and Technology (HKUST) in support of the University's innovative research and development in advanced materials and processing.

2004
The Group establishes THEN Maschinen GmbH to acquire the former THEN Maschinen-and Apparatebau GmbH and Scholl-THEN GmbH. The high-quality THEN branded products made in Germany are an ideal supplement to Fong's Group

2002

As a major step toward further diversification, the Group establishes Xorella Hong Kong Ltd. to acquire Xorella AG, which is engaged in the design and manufacture of yarn conditioning equipment.

2001
Fong's National Engineering (Shenzhen) Co., Ltd. completes the upgrading of its quality assurance system to the standard of ISO9001:2000.

1999
The Group joins forces with A. Monforts Textilmaschinen GmbH & Co. KG to establish Monforts Fong's Textile Machinery Co., Ltd. and Monforts Fong's Textile Machinery (Shenzhen) Co., Ltd. for the manufacture of fabric finishing equipment in China.

1998
Fong's National Engineering (Shenzhen) Co., Ltd. receives ISO9001:94 quality assurance certification from Lloyd's Register Quality Assurance.
Fong's National Engineering Co., Ltd. and RF Systems s.r.l Italy has entered licensing into agreement to manufacture Radio Frequency Dryer.

1995
The plant and the 21-storey building with office and dormitory premises in Shenzhen are put into use. The production operation is relocated to China, and the Hong Kong office serves as the Group's administrative headquarters.

Tycon Alloy Industries (Hong Kong) Co., Ltd. and Tycon Alloy Industries (Shenzhen) Co., Ltd. are established and commence the investment and sand casting products manufacturing business.

1991
The Group acquires a 110,000-square-meter land site in Buji, Shenzhen for the construction of its own plant.  Fong's National Engineering (Shenzhen) Co., Ltd. is established.

1990
Fong's Industries Company Limited is listed on The Stock Exchange of Hong Kong Limited on 12th October.

1988
The Group moves into its new Hong Kong headquarters in Tsing Yi, a 9-storey plant and office building with a floor area of approximately 16,000 square metres.

Fong's Steels Supplies Co., Ltd. is formed to conduct stainless steel trading. In addition to serving external customers, it also acts as the steel supplier for the Group's dyeing and finishing equipment manufacturing business.

1979
In response to China's launch of its Reform and Opening Policy, Fong's becomes one of the first Hong Kong companies to explore the giant textile dyeing and finishing market in China. It is a key turning point for the Group's future development.

1969
The company is officially renamed Fong's National Engineering Co., Ltd. to reflect its principal business focus.

1963
Mr. Fong Sou Lam commences the dyeing and finishing machinery manufacturing business, which lays the foundation for the Group's future development.
For more information, please contact:

Allisa Lau,
Senior Manager,
Sales & Marketing Department,
Fong’s National Engineering Co., Ltd.
8/Fl., 22-28 Cheung Tat Road, Tsing Yi, Hong Kong
Tel: 852-2943 8331