EganaGoldpfeil founder & chairman Hans-Joerg Seeberger sees his Hong Kong firm as a vital link for European businesses seeking a partner to enter China

The Cepa free trade pact will bring immense business opportunities and benefits, according to the head of a Hong Kong-listed luxury goods group with manufacturing and design facilities in the Chinese mainland and Hong Kong.

Founder and chairman of jewellery, timepiece and leather goods group EganaGoldpfeil (Holdings) Ltd., Hans-Joerg Seeberger, said: "Cepa is going to give us a big advantage. Our Group has been in Hong Kong since 1978 and we have had our Hong Kong based manufacturing facilities since 1980. This has enabled EganaGoldpfeil to be in a better position than other international players and we are able to expedite our penetration in the mainland at a faster pace."

The firm now has four production plants in the mainland and two production lines to cover watch and jewellery manufacturing in Hong Kong.

Under Cepa, Hong Kong manufacturers are exempt from paying tariffs on exports to China. The normal import tariff on timepieces ranges from 14-23 per cent and on jewellery from 26.7-35 per cent. EganaGoldpfeil intends to expand its distribution of global brands such as Pierre Cardin, Esprit, JOOP!, Junghans and Goldpfeil into the mainland.

Hong Kong the vital link to China

"Cepa offers a perfect opportunity to leverage Hong Kong as a base for the distribution of international brands into the mainland. We anticipate that we will be able to increase Chinese contribution to our turnover to 10 per cent in the next 5 years by taking advantage of Cepa regulations," added Mr Seeberger. 

He said Cepa also offers a great opportunity to move value-added R&D facilities, procurement and assembly processes from the Group's current European operations to Hong Kong to take advantage of the zero tax benefits. "This will further enhance the price competitiveness and cost efficiency of the products when sold in the mainland or re-exported to global markets."

Mr Seeberger said the Group has been approached by retail chains in Europe eager to do business in the mainland using EganaGoldpfeil's mainland knowledge and connections. "Cepa opens opportunities for us in providing the vital Hong Kong link in exploring partnerships with European retail chains to enter China."

Cepa, he said, has also provided two other incidental benefits. "Certain mainland production plants seek our assistance to procure and import components using our Hong Kong operations while other mainland distributors have approached us to help them enter the European market."

During the six months to November 2003, EganaGoldpfeil recorded a turnover of HK$1.5 billion, up by 21 per cent. The company's next five-year plan will focus on Asia particularly on Japan, South Korea and the Greater China Region.

"Cepa is a welcome added incentive and catalyst for us to reach China's vast consumer  market at reasonable costs, " concluded Mr Seeberger.

More details in Cepa - a simple guide

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