Feature_CoverStory_710x350.jpg Branding Man

Hong Kong’s businesses have rarely excelled in branding themselves internationally, despite decades of doing business overseas. Horst Pudwill, co-founder and chairman of Techtronic Industries, may not have generated a brand for his company, but he’s proven remarkably astute at acquiring them and keeping them profitable, even as he keeps the business a family affair.

When Horst Pudwill walks into the room, he announces his presence with a kind of good-natured energy and fervour, more normally seen in a young CEO eager to build a company from the ground up. He fusses with details. He loves lists. 
On a shelf near his desk, there is an antique globe with each country fashioned out of some precious material. One country’s borders are shown in mother-of-pearl, another in jade. It’s a precious item to Pudwill. He says that when he was a kid, he liked to know every country and its capital on the world map. That’s a fitting bit of knowledge for a man who has long harboured global ambitions. Nowadays, he likes to list the brands acquired by Techtronic Industries (TTI), the company he co-founded with Macau-born Roy Chi Ping Chung in 1985. 

His ownership stake in TTI has made Pudwill one of Hong Kong’s richest men. He was first ranked on the Forbes Hong Kong billionaire list in 2013, when a surge in TTI share prices catapulted him into the top 50 richest. That surge came on the back of a housing recovery in the United States – fertile ground for TTI’s main business, cordless power tools. It is the source of Pudwill’s continued optimism for the future of TTI’s business, where nearly three quarters of TTI’s business is done. In 2011, TTI’s share price was just over HK$7 per share. In January 2013, it was nearly HK$15 per share, rising to nearly HK$32 a share in 2015. After a dip in early 2017, the share price recovered back to just over HK$32 per share after TTI’s financial reporting period. 

Today, TTI’s success affords Pudwill the life of a global jet-setter, for business and fun. He brings out photos of himself and Leonardo DiCaprio palling around at a resort. Pudwill owns a Sunseeker yacht, with which he likes to explore Hong Kong’s coast – Tai Long Wan is a favourite. Formentera Island, just off Ibiza and long regarded as the quiet sister to the debauchery of its more famous neighbour, is another favorite destination. A second home in Horseshoe Bay, far from the cosmopolitan centre of Vancouver, provides respite from the bustle of Hong Kong. Pudwill’s wife, Barbara, is Canadian.

But at the heart of it all is a business geared around tools. Specifically, power tools for all the do-it-yourself (DIY) projects, construction sites and home improvement work that North Americans obsess over. Techtronic Industries was founded by Chung and Pudwill to do original equipment manufacturing (OEM) of power tools in 1985, with production based in Dongguan, China and shipping through Hong Kong to the world’s major markets. The OEM business was a mainstay of many Hong Kong and Taiwanese businesses, where production of goods was either with factories owned by the OEM company, or was farmed out to factories in China owned by locals. 

In this, TTI’s business mirrored so many other firms that did OEM business with the West, with cheap production in China and Hong Kong as the transshipment point. But according to Pudwill, the differences between his firm and other OEM makers were there from the start.

Pudwill, originally from Hanover, Germany, came to Hong Kong to work for Volkswagen in 1971. Chung and Pudwill met through a mutual friend, and their partnership proved to be the keystone in the TTI enterprise. “We had a straight cut from the beginning,” Pudwill says. Chung would handle the factory in China, while Pudwill would handle the engineering and marketing of power tools. “I would say that we were lucky to meet each other,” Pudwill says, adding that when Chung decided to retire some years ago, he asked Chung to stay on as a director on the board. “Roy already knew how to get something good [from Chinese builders]. You could communicate with him. He was willing and smart, and thinking long term.”

Find the full article in the May issue of The Peak.

Feature_Property_710x350.jpg Mediterranean Hotspot

The Barcelona real estate market is on the up and up. These neighbourhoods would give you the best return on your investment.

Barcelona is an intoxicatingly beautiful city on the shores of the Mediterranean. Spain’s second largest city, it combines a 2300-year history with cutting-edge modernity, boasting medieval plazas and bustling boulevards, other-worldly Gaudí buildings and stylish stores, not forgetting fabulous cuisine, a superyacht marina and seven beaches – all bathed in luminescent Mediterranean sunlight. 

However, it wasn’t always so. Before hosting 1992’s Olympics, Barcelona was “a grey, unattractive and half-forgotten city,” says Lluis Bosch, head of Routes and Publications at the Barcelona Institute of Urban Landscapes. Yet in three decades, it has become one of Europe’s top four tourist destinations, a vibrant city renowned for its fashion and sophistication – the perfect place to savour the Mediterranean lifestyle. The area now draws 18 million visitors a year. 
How did this metamorphosis occur? “The answer lies in a single word: architecture,” says Bosch. It began with the Olympic facelift and has been continued by the city council’s dedicated policy of protection and improvement of the urban landscape. In 25 years, 30 per cent of residential buildings were restored in “one of the most successful municipal programmes in history,” says Bosch. 

Today, he adds, eight out of 10 visitors come here for its beautiful buildings, particularly those of Gaudí and other Modernistes.  
This popularity as a tourist destination, combined with signs of Spain’s long-awaited economic recovery (the country’s economy grew 3.2 per cent in 2016, making it one of the euro zone’s strongest performers), has converted Barcelona into a property hotspot. This boom is driven in part by overseas buyers, who accounted for 65 per cent of luxury property sales by estate agents Lucas Fox International Properties in 2016, according to the agency’s annual report, an increase of 15.74 per cent over 2015. 

“Barcelona has one of the world’s most booming real estate sectors at the moment, making it one of the most attractive markets to invest in,” says Salvador Font, founder of Luxury Font luxury real estate investment agency. Sotheby’s International Realty agrees, calling Barcelona “one of the most attractive and exciting places to be in western Europe.”
So what makes it so attractive for investors? A report by Luxury Font identifies three main reasons. 

Firstly, the low interest rates (just 4 per cent per annum for foreign investors). 

Second, the plunge in prices following the bursting of the building bubble in 2007. According to the report, the overall price of properties in Spain fell from its peak of €2,862 (HK$23,851) per square metre in 2007 to a low of €1,619 in 2015. Prices have since started to recover, particularly in Barcelona, where the average price per square metre rose 14 per cent to €3,879 in 2016, according to the National Institute of Statistics (INE). Nevertheless, says Font, Barcelona is still cheap compared to other euro zone capitals. 

Thirdly, the report notes that “the demand for newly-built properties far exceeds the supply at the moment,” increasing the potential for profits from investment.  

Find the full article in the May issue of The Peak.

Feature_Antique_710x350.jpg Markings of History

While Qing and Ming antiques are still commanding sky-high prices at auctions, sophisticated collectors increasingly see the historical value of archaic artefacts.

Its history is documented in the Records of the Grand Historian, students learn that it’s the dynasty between Xia and Zhou, but for centuries, people have doubted the existence of the Shang dynasty. Until 1928, when an archaeological excavation team, led by Li Ji from the Institute of History and Philology, uncovered palatial foundations and several royal tombs in Anyang and put those doubts to rest. The caches of bronze vessels and inscribed oracle bones also reaffirmed that the Shang people, far from being mythical, lived in a highly civilised society, and were sophisticated in bronze metallurgy.

When the Kuomintang was defeated by the Communist Party in 1949, they brought along trunks of these precious bronzes with them, some of which would eventually end up at the National Palace Museum. In the proceeding years, many such excavations were made, but China was also deep in the throes of the Cultural Revolution, when agricultural productivity trumped the appreciation of the arts. As a result, many of these bronzes were sold to the British, Japanese, Americans and Germans. It wasn’t until the 1980s, with living standards up, that Chinese collectors and dealers started to buy them back.
Fast forward 30 years and the world – well, mostly the Chinese – is in a frenzy of archaic bronze buying. An obvious example was at Christie’s New York sale in March, where a bronze 'Fang Zun' hu (four-ram square wine vessel) from the late Shang dynasty fetched a staggering HK$37 million, six times the estimate of HK$ six to eight million.

As in any market, Chinese antique trends are defined by who is collecting at that point in history. When the Japanese dominated the art market – from the ‘70s into the early ‘90s – the taste was for Song pieces, their simplicity gelling well with the Zen ideal many Japanese cherish. Chinese buyers first entered the market in the late ‘90s. "I had one, or two Chinese 1995, more and more started coming in the late 90s. By 2005, it was booming," recalls Nader Rasti. Prior to founding Rasti Fine Art (formerly Knapton Rasti Asian Art), Rasti was a director at Christie's London, where he held his last Asian art sale in 1999.

Many of these new collectors started with buying pieces from Qing – porcelain, ceramics, scrolls, jades, what have you. As Ronald Chak, managing director of the International Antiques Fair, notes, “new collectors are easily attracted to Qing pieces as they tend to be flashier.”

“The Chinese are excited by names like Qianlong. They all want something from a well-known emperor,” French dealer Christian Deydier adds.

From there, this group moved onto Ming porcelain and ceramics, a category which is still going strong, as evidenced by the Xuande fish pond lobed bowl, which went under the hammer for a record-breaking HK$29 million, more than double its estimate, at Sotheby’s Hong Kong last month.

But collectors are also beginning to collect in other areas, as Qing and Ming pieces become increasingly unaffordable, and as they realise the historical significance of older pieces.

Find the full article in the May issue of The Peak.

May 2017 Issue