Hong Kong’s Fung brothers named Forbes Asia Businessmen of the Year

Top Hong Kong businessmen brothers Victor and William Fung of the Li & Fung Group, a Hong Kong-listed trading and global supply chain management firm for consumer products, have been named by Forbes Asia as its Businessmen of the Year for 2005.

Dr. Victor K. Fung is group chairman of Li & Fung Ltd., while William Fung is the group’s managing director. The pair own equal shares of privately held Li & Fung Group, which owns part of Li & Fung Ltd. Besides this trading arm, the Li & Fung Group operates fully owned subsidiary Li & Fung (Retailing), which operates among others, the Toys R Us franchise in Asia, as well as the Hong Kong-listed IDS Group, its integrated distribution services arm.

In the Philippines, the Li & Fung Group has three subsidiaries: Li & Fung Philippines, an export trading company; IDS Logistics Philippines, and IDS Marketing Philippines, which provide supply chain management services in logistics and marketing, respectively.

In October 2005, Li & Fung awarded the Philippine franchise for Toys R Us to the Robinsons Retailing Group.

Li & Fung was founded in 1906 in Canton (now Guangzhou), China, by grandfather Fung Pak-Liu and business partner Li To-Ming. It was in 1972 when it began its transformation into a professionally managed company after William Fung, a Harvard Business School MBA holder, returned to Hong Kong to help his father, Fung Hon-Chu, who had taken over the business.

Armed with a Master’s degree in electrical engineering from MIT and a PhD in business economics from Harvard, Dr. Victor K. Fung returned to Hong Kong a year later and joined William Fung in running the company. Dr. Fung also taught at Harvard for a few years prior to his return to Hong Kong in 1973.

In the two decades that followed, the two brothers introduced Western management techniques to the Asian company, allowing family members to cash out by first taking Li & Fung public in 1988, gaining control through a management buyout.

Today, its listed trading arm, Li & Fung Ltd. has 72 offices in 41 countries around the world. It posted HK$23.5 billion (S$5 billion) in revenues in the first half of 2005, and HK$619 million in core operating profit, up 19 and 21 per cent respectively from the same period in 2004.

Meanwhile, Li & Fung (Retailing) made some $390 million in revenues in 2004. Aside from operating the Toys R Us franchise in China, Taiwan, Hong Kong and South-East Asia, including Singapore, Malaysia, Thailand and the Philippines, it operates the Circle K convenience stores in Hong Kong, Macau and China. A third subsidiary – Branded Lifestyle – meanwhile, represents brands such as Calvin Klein, Country Road, Mango and Salvatore Ferragamo around the region.

The IDS Group provides professional services in the three areas of marketing, logistics and manufacturing. It made $370.3 million in revenues and $8.9 million in operating profit in the first half of 2005. The IDS Group is represented in the Philippines by IDS Logistics Philippines and IDS Marketing Philippines, leading players in the fast-moving consumer goods (FMCG) logistics and distribution industry in the country.