Acquisition of Monforts to propel business forward
The year 2013 is a landmark in the history of Fong’s. The company completes 50 years of global leadership in dyeing and finishing machines. Fong’s has a rich history dating back to 1963 when the company was started. In the last 50 years Fong’s has added strength both by organic growth and by acquiring some major global brands like Xorella, Then, Goller and more recently Monforts with which the company already had a joint venture since 1999. With all these acquisitions and strong growth from its own products, Fong’s has emerged as the world’s largest manufacturer of dyeing and finishing machinery.
In its 50th year, the Board of Fong’s Industries Company Ltd. announced a new streamlined management structure following its recent acquisition of the Monforts Group. The new structure is designed to unlock additional synergies from the expanded operations and deliver the group’s world class products to the global market in the most efficient manner possible.
“We are entering the next phase of the group’s development, and it is the right time to review the structure,” said Ms. He Fengxian, Chairman and Executive Director of the Group. “Mr. Fong Sou Lam has resigned from the position as Executive Director and remains the Honourable Chairman of the Company. He will continue to use his vast experience to contribute to the Group and assist me to formulate the overall corporate strategies and product development direction of the Group.”
“With effect from January 1, 2013, Mr. Wan Wai Yung will step down from the position of Chief Executive Officer of the Group and will be reassigned to focus on the integration of Monforts into the Group so as to extract full value from this new opportunity. Mr. Wan is uniquely qualified for this role in view of the insights and knowledge of the Monforts business he has built up over many years working on the former joint venture with Monforts. Mr. Wan will continue to be a member of the Board,” Ms. He added.
The former Chief Operation Officer of the Group, Mr. JiXin, has been appointed CEO of the Group with effect from January 1, reporting to the Board and responsible for the overall day-to-day management of the Group. The former position of COO will be eliminated.
“Looking ahead, we expect the textile machinery sector to remain highly competitive, and it will be critically important that Fong’s structure itself in a manner that will enable it to be agile and to respond quickly in such a dynamic market”, said Ms. He. “Therefore, we have reduced the size of our Board from fourteen to nine Directors, and reassigned roles so that the former Board members can be tightly focused on the functional roles they are now committed to.”
Ms. He concluded by saying that the Board believes that this new streamlined structure will create a more focused and fast-moving organization for the next phase of Fong’s development, which will be characterized by increased international competitiveness, synergies arising from the integration of Monforts, opportunities to broaden the product range in certain large and traditional textile markets, enhanced expertise and know-how and a greater leveraging of shared research and development.
Mr. JiXin, the new CEO of Fong’s, formally shared the news of the 100 per cent acquisition of Monforts. From December 1, 2012, Monforts has officially been a part of the Fong’s Group. The strategic thinking behind is to efficiently utilize the technology and know-how of Monforts in dry and wet finishing processes across the Fong’s Group.
Fong’s is also expanding capacity at its massive manufacturing facility at Zhongshan. Mr. Ji said: “The second phase of Fong’s Zhongshan project has just kicked off and will be completed by the end of 2014”.
Fong’s Zhongshan project is the most important and strategic move by the Fong’s Group. Fong’s has acquired a total area of 700,000 sq. metres of land and will construct approximately 400,000 sq. metres of factory. The Zhongshan project would be the major manufacturing facility of the Fong’s Group. The first phase of the project (area of 120,000 sq. metres) was completed two months back which is mainly for the joint venture with Monforts. The Zhongshan project will help reduction in the cost of manufacturing. Apart from this, the new facility will have state-of-the-art automation which will also contribute to efficiency and cost benefits.
Talking about the company’s current performance and future growth plans, Mr. Ji said that in 2012 the market in China was a bit subdued owing to the fluctuating cotton prices. But the drop in business in the Chinese market was adequately compensated by increase in exports. The company has been able to maintain a good balance of business both in the domestic market and exports. In exports, India and Bangladesh remain the key markets, but a fast emerging and a very promising market for the company is Indonesia, says Mr. Walter Leung, Sales Director of Fong’s.
Asked specifically about the Indian market, Mr. JiXin said: “India is one of the most important markets for Fong’s globally. With the acquisition of Monforts, which also has a significant presence in India, we will be able to complete dyeing and finishing and solutions for our customers”.
Currently Fong’s is represented in India by A.T.E. Enterprises for the sales and marketing of machines in the Indian market. Fong’s has established its own subsidiary, Fong’s Technical Service Private Ltd. to directly cater to the service and spares requirements of Indian customers. The Indian entity is headquartered in Delhi with branches in Tirupur, Mumbai and Ahmedabad. The company has a team of 30 people in India, working closely with the customers, ensuring efficient service. “Service is the most important aspect when you sell your machinery, and we give top priority for this”, says Mr. Walter Leung.
Fong’s has a few thousands of its machines running in mills across India, and the company is selling 150 to 200 machines annually in this market.
With a fast growing market and future growth potential, many of the global companies have established their direct subsidiary in India to handle both sales and service. Mr. JiXin made it clear: “We are very happy with A.T.E. We appreciate the effort A.T.E. has put in to establish the Fong’s Group in the Indian market. The reason why we decided to handle servicing is because we believe we can give more focus from our side and reduce their burden and let them concentrate on sales and marketing”.
The recently acquired Monforts is also handled by A.T.E. in India, which makes the relationship stronger and offers more opportunities for the two companies to work together.
At the recently held India ITME, Fong’s received overwhelming market response. It had on display the JUMBOTEC high temperature dyeing machine and ALLWIN PLUS high temperature package dyeing machine. JUMBOTEC, in particular, since its launch in 2011, has been receiving enormous attention from customers who are sourcing for more cost-effective solution for their dyehouses. As is known, the new TEC series high temperature dyeing machine with state-of-art design further refines dyeing machine performance in terms of cost control, energy saving and emission reduction. It is suitable for different dyeing processes with various types of natural, synthetic and blended fibers, aiming to provide complete solutions: “Efficiency, Energy Saving, Environmental Friendly”.
“India’s Knit Processing Sector Will Witness Significant Growth”
Fong’s sees huge potential here since India’s knit processing sector is underdeveloped, and there is still large room for growth, shared by Mr. Walter Leung. Traditionally, India has not been aggressive in knits. It is India’s neighbor Bangladesh that has grown exponentially in knitting and processing. But that country is facing a serious energy crisis since last two years, and there is no clear idea as to when the crisis would end.
Thus buyers are now increasingly focusing on the Indian market and the knit processing industry in the country. That is the reason why Fong’s also has a number of new ongoing processing projects coming up in the eastern part of the country, near Kolkata.
Mr. Walter Leung said: “Fong’s is also increasingly focusing on developing technology around the sustainability issues”. Nowadays, for customers who are supplying international clients and brands, their major concern should be production sustainability.
Fong’s has been paying attention to increasing the development on sustainability so that the customer can achieve greener production and meet the environmental and quality standards being demanded by brands. The company is planning to launch new products during the Shanghaitex in June this year.
Mr. Ji believes that the acquisition of Monforts will further propel the group’s business in the global market and more particularly in markets like India where Monforts is a highly respected brand. There is lot of synergy between the Montfort products with other products in the group. “We can provide the complete solution for dyeing and finishing, and this will further boost the business of the Fong’s Group in the Indian market”.