Buy in Hong Kong at mainland China prices

The typical Hong Kong wholesaler these days has a marketing and sales operation in Hong Kong and manufactures in China. Hence buyers can benefit from the low-cost manufacturing of the mainland while enjoying the security of the Hong Kong legal system and quality control.

For example, Zoltrix International based in Kowloon Bay is a manufacture of MP3 players, headphones, speakers and video games with a turnover of $25 million of which 30% is in the Middle East. Zoltrix has 21 staff at its Hong Kong headquarters and more than 300 in mainland China at its manufacturing facilities.

'We sell everything through Dubai and have a very good partner in Iran,' explains General Manager Andy Yuen. 'Quality is the most important issue and we can offer very flexible delivery times as low as three days. We can also customize designs to suit Middle East requirements.'

Mr. Yuen sees the Middle East as a strong market for future growth and likes the 15% margins he obtains outside Dubai which provides a more competitive 5%.

Another typical case study is Solomon Systech, a producer of integrated circuit displays for products such as mobile phones. Indeed, one-in-five phones sold around the world have an IC display from Systech.

Originally a management buy-out from Motorola six years ago, Solomon Systech is now listed on the Hong Kong bourse and grew sales by 182% to $308 million last year. At its main office in the upscale Hong Kong Science Park Systech employs 200 staff whose design work is then outsourced for manufacturing in 20 factories in Taiwan, Korea and China.

In Solomon Systech's case its history as a spin-off from Motorola and the fact that its talented staff come from Hong Kong account for its business location.

But again this company illustrates how Hong Kong is a base for business in a much wider region, and another reason for Middle East business to do business in Hong Kong: access to 70,000 Hong Kong owned factories employing some 11 million workers in the Pearl River Delta region.