Steve Li, executive director of Yue Yuen, the world's largest producer of branded sports footwear, says its success is due to sound policy and strategy

Yue Yuen Industrial (Holdings) is literally a runaway Hong Kong success, making more sports shoes for the world's biggest brands than any other company. Last year, it assembled more than 158 million pairs for international brands such as Nike, adidas, Reebok, New Balance, Puma, Timberland and Rockport.

Its global scope in marketing and manufacturing has brought Yue Yuen an International Certificate of Excellence at the 2004 Business Awards sponsored by international express delivery service DHL and Hong Kong newspaper the South China Morning Post.

"Yue Yuen's success is clearly the result of management foresight and strategy. It is without doubt a world-class winner and a credit to the can-do business spirit of Hong Kong," said the judges' panel.

Decade of growth

Executive director Steve Li said the company was set up in Taiwan in 1988 and listed in Hong Kong in 1992. It has enjoyed some productive years, with a compound average growth rate of 18 per cent over the past decade. In 2003, sales rocketed to US$2.5 billion.

"We attribute the past decade's success to our sound policy and strategies. We have a clear mission and goal to be the choice for branded athletic and casual footwear in the world." 

Mr Li said Yue Yuen now has about 17 per cent global market share. The company employs 250,000 people in Asia and Latin America, manufactures mostly in southern China, Vietnam and Indonesia and exports mainly to the US, Europe and Asia.    

"We take great pride in our ability to compete at the highest level while looking after our workers' safety, benefits, health and protection," Mr Li added. "We have put a lot of effort in our Corporate Social Responsibility programme and believe that a happy workforce translates into better productivity and higher quality which is exactly what our customers are looking for." 

Investing in design

Yue Yuen places a high premium on R&D and in 2003 spent US$84 million in this area. The company also does more business in Original Design Manufacturing (ODM) which means it works closer with its clients to jointly develop and design new products. 

It has also diversified into retailing and is a licensee in the mainland for brands such as Converse, Hush Puppies and Asics. "So far, we have over 850 distributors for our licensee products and opened 300 shops and counters for sports brands like Nike, adidas and Reebok. Our plan is to have over 1,000 shops or counters by 2008," explained Mr Liu.

The company will continue to expand its footwear manufacture and will also expand horizontally to diversify product categories such as ladies shoes, casual shoes and sandals.

It will put in more resources to expand the mainland's retail business and aims to be the largest sports goods retailer in the mainland. "The 2008 Beijing Olympics and the rising consumer power will be the engines of growth for this market," added Mr Li.

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Yue Yuen Industrial (Holding) Limited