B&Q Asia's managing director Steve Gilman says Hong Kong's efficient logistics system and its talented workforce works well for the company's regional base

Hong Kong represents good value for money and is a cheaper base to set up a regional office than in Shanghai, according to the head of a leading UK home improvement retailer.

Steve Gilman, managing director of B&Q Asia, which is part of Kingfisher plc, said Hong Kong was selected over Shanghai as the city represents a saving of HK$3.6 million (US$466,000) per annum over Shanghai, mainly due to its low tax system.

"Added to the savings, Hong Kong's logistics is second to none. You can fly anywhere from Hong Kong very easily. The people are smart and well-educated and our Hong Kong office has a good mix of 50 per cent expatriate and 50 per cent local staff," added Mr Gilman.

Support base for other Asian offices

Set up in January 2004, the Hong Kong office is used as a regional support base for the Chinese mainland, Taiwan, Turkey and South Korea. B&Q is also looking at possibilities in Thailand, Singapore and Malaysia.

Mr Gilman said Asia holds many possibilities especially on the mainland where there are enormous growth and opportunities. Recent changes brought about by the World Trade Organisation (WTO) regulations have been very helpful to foreign companies. 'We don't need local partners to operate in China and there is now a level playing field. Of course there is more competition as other foreign retailers appear on the scene but this keeps us fit and it's good for the consumer."

Hong Kong, he adds, plays a big part in the mainland's development. "Foreign businesses always look at Hong Kong as a springboard to the mainland. We have been in the mainland since 1998. Hong Kong is a discreet and value-add-on to our business in China," added Mr Gilman.

Hong Kong is not just a regional base for B&Q but a market in its own right. B&Q is opening a 120,000 sq ft store in Kowloon in 2006. "We can bring a difference to the home improvement market in Hong Kong. We keep the bulk of our products in the mainland's warehouses and take advantage of the lower cost in property and labour to offer better priced products to our Hong Kong consumers."

B&Q is said to be the number one DYI retailer in Europe and the third largest in the world, with more than 50 stores opened internationally, including B&Q Beijing, which is now the third largest B&Q store in the world.

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