Over the past half century, Hong Kong has been through several major transitions. In the '70s and '80s, light industries of all kinds were thriving, absorbing a lot of local labour. In the 1990s, the service sector became the leading industry. More recently, in the face of the global Information Technology (IT) revolution, Hong Kong has started to morph into a knowledge-based-technology city. During all these transformations, manufacturing industries have reduced their role in Hong Kong's economy and been replaced by other sectors with higher added value.

Many traditional local businesses have, therefore, felt pressure to survive and continue developing. Those that have succeeded have had to make timely adjustments to their business strategies and find a new way forward into the future.

Pak Tak Knitting & Garment Factory Ltd (hereafter referred to as Pak Tak) is one such example. With great confidence in the future of this industry, John Cheng Kai Chun, Assistant Managing Director of Pak Tak, says, "With a far-sighted business strategy and appropriate IT applied to business operations, we can meet the challenges of the future."

Pak Tak was founded in 1965 by current Managing Director, Mr Cheng Chi Tai. It has now established itself in the knitting and garment industry, with production lines in China and Thailand. Pak Tak Industrial City, situated in Qiaotou, Dongguan, Guangdong Province, is its largest-scale production base. Covering an area of 1.5 million square metres, the production facilities are comprehensive, including an independent electricity generator, steam boiler, central cables and steam pipes, and such environmental equipment as a water treatment pool. The Industrial City is the largest of its kind in Dongguan City, setting an example for local industrial development. It has earned much praise from the city government and has even become a showpiece for the city. Pak Tak Industrial City currently employs more than 5,000 workers, producing a range of knitted products and garments to supply clients all over the world.

Moving production facilities to an area where human resources and land are relatively inexpensive is a smart way of adapting to changes. After all, the garment industry is labour-intensive, making it very important to have good human resources management in the business. In this respect, Pak Tak is a leader. To ensure good employee welfare, the company has set up complete supporting facilities, including living quarters for both single and married employees, clinics, a post office, branches of various banks, a kindergarten, a supermarket, and sports and recreation facilities.

In addition, Pak Tak has established company labour policies that meet the international SA8000 standard, ensuring that its workers are treated well. As John points out, these measures not only increase the employees' sense of belonging, but also make overseas clients who care about workers' welfare feel more comfortable doing business with Pak Tak, thus creating a positive influence for the company.

In overall business operations, like most Hong Kong companies with investments in mainland China, Pak Tak first ships its products to Hong Kong and then exports them to the major markets of North America and Europe. As Pak Tak does business on a huge scale, it submits about 20 to 30 customs declaration forms each day. In addition, it has to handle various other trade documents, such as Quota Licenses, Certificates of Origin and Production Notifications. Tradelink's electronic services make it supremely convenient for Pak Tak to handle this staggering number of documents, thereby increasing the company's operating efficiency and reducing costs.

"We registered as a client of Tradelink in mid-1997. At first, our employees who handle trade documents were not familiar with the electronic method of submitting trade declarations simply because they were so used to paper and felt that that was the most reliable method. Fortunately, Tradelink software is extremely user-friendly and they quickly learned to use it. There are many functions in the software, such as using templates for repeat submission of forms, which greatly increase efficiency. I believe that, if they were to go back to the old method of manually submitting trade declaration forms, they would find it very inconvenient," says Mr Alan Kwan Kei Lun, Assistant Manager of Pak Tak.

The company also discovered that using Tradelink services could increase users' management efficiency, as John explains. "It's easy to lose paper documents, so, in the past, when we wanted to check the records of past declarations or other documents, we encountered great difficulties. Using Tradelink's services, managers need only to link up to Tradelink's network and they can find a whole range of useful information - for example, the status of various trade document applications and the number of monthly declarations submitted. This has greatly improved our document management."

Another way that traditional companies can maintain competitiveness is by embracing the challenge of IT. The management of Pak Tak decided not to lag behind its competitors and to implement computerisation. According to John, "Tradelink's e-services were a revelation, showing us how IT can improve business efficiency. More and more overseas clients are asking to use Electronic Data Interchange (EDI) as a means to place their orders, which has made us realise that we need to follow the market trend and go in this direction. Therefore, starting in 1999, we implemented a full computerisation programme for the company's entire business operation and used IT more in various business processes. We are also building a company website with a view to leveraging the Internet for business development."

In fact, as early as 1997, when Pak Tak Industrial City was established, its computerisation programme took place simultaneously. Currently, the offices of the Industrial City have the policy of "one person, one computer". Pak Tak is also providing continuous IT training, preparing the way for market changes in China (for example, the introduction of electronic export trade declarations). Alan reveals that they are planning to link their offices in Hong Kong and mainland China and various tests are already underway. When the link has been completed, efficiency in managing production and information will be greatly improved.

There is little doubt that IT gives traditional companies a broader vision. As Mr Cheng Chi Tai revealed, Pak Tak is preparing a series of business plans that include opening an office in New York to expand its overseas market. In addition, the company plans to expand its design department and continue to fully implement IT throughout. With its garment manufacturing expertise, its mainland production capabilities and its progressive labour policies, it is no wonder that such famous labels as Ralph Lauren are among Pak Tak's international clients.