Overseas Chinese businessman Siegfried Lee has been through thick and thin in the corporate arena. He tells Sun Feier his tenacity and global vision have brought him back from ruin.

Harboring an "international vision" is an irreplaceable asset for overseas Chinese, especially in business.

That well applies to Siegfried Lee Siu-fung, who had had his entrepreneurial roots in Hong Kong in the early 1990s prior to the onset of the crippling Asian financial meltdown, and is something he's most proud of.

Lee is someone who could possibly read the runes, a hard-headed businessman convinced that in wheeling and dealing, particularly in high-end products, it does really matter for anyone to have great exposure with that global insight.

"Many overseas Chinese are trying to tap into the high- quality manufacturing sector nowadays, most of them opting to set up plants and factories in other countries to acquire research and development ability there," says Lee, who now helms Frankfurt-listed ceramic sanitary ware maker ROY Ceramics, which he founded in Munich in 2014.

The group targets the middle-to-high class consumer market, particularly luxury hotels, homes, offices and commercial complexes.

Diversifying technologies could create market favorites, Lee believes.

"Although our technology in smart toilet projects remains a secret, it would be made known in the near future. One thing I would like to highlight is that our technology is a co-working outcome of engineers and designers from many countries regardless of their nationality," Lee, who's the company's chairman and chief executive, tells China Daily.

With an eye on the vast Chinese mainland market, ROY Ceramics took itself to the Shanghai EXPO in 2010, where it managed to rake in a following.

"The Chinese market is definitely our future direction with its huge market capacity and customer base."

Lee predicts that, in future, every company doing business in China would enjoy the same opportunities without any restriction, regardless of whether it's private capital or a State-owned enterprise.

For Lee, his corporate acumen or charisma isn't built in a day.

He shot to prominence in Hong Kong in the early 1990s. He had complete control over then Hong Kong-listed Siu-Fung Ceramics Holdings, and once owned the most expensive house in the city together with "superman" Li Ka-shing.

He saw himself as one of the Hong Kong investors who had played a critical role in the Chinese mainland market at the time. Taking foreign ceramics into China, he created model plants at a cost of 50 million yuan in five mainland cities and provinces, namely Beijing, Henan, Anhui, Shandong and Sichuan.

While other investors focused on purchasing old State-owned enterprises before going public in the domestic or overseas stock markets, Lee focused on building new enterprises, taking full advantage of updated technology abroad.

Economies of scale

During the period, 15-cm white ceramic tiles formed the centerpiece of Chinese homes decoration, but various external tiles and decorative bricks that have appeared in every corner of the mainland for the past 20 years have benefited from Lee's operations.

"We covered the stoneware industry, technical ceramics, advanced ceramics, daily-use ceramics and ceramic sanitary ware in China, which fueled domestic investment in the relating sectors," Lee recalls.

According to official German statistics, Lee's factories had hired around 2,000 German employees - the largest amount among major market players in 1993.

Siu-Fung Ceramics generated reliable liquidity capability for Lee's other investments. While still in his early 30s, he bought what was then Hong Kong's most expensive house in the upscale Deep Water Bay residential area for a stunning HK$280 million. In 1993, he was crowned the "Young Entrepreneur of the Year" through the Hong Kong Business Awards.

However, for Lee, it wasn't a bed of roses to the end. A brutally high inflation rate and tight fiscal policies on the Chinese mainland put the brakes on its economic growth, virtually bringing Lee's businesses to their knees. As the mainland addressed economies of scale, his model plants were gradually squeezed out by his partners or suppliers who had picked up the technology from his model plants.

The last straw came in 1997 as the Asian financial crisis brought things to a head. Siu-Fung Ceramics was delisted from the main board of the Hong Kong Stock Exchange, followed by Lee's personal bankruptcy four years later. His house in Deep Water Bay was sold to the Kadoorie family in 2000.

Rising from the ashes

"Never fall in love with your investment," he counsels.

Lee regrets not having disposed of the house when its market value had doubled, admitting he hadn't treated the property as a real investment as it should have been.

"If you invest in a stock, please sell it at the time when it hits a reasonably high level," says Lee to retail investors. "Otherwise, you'll lose all that you've put into it".

Rising from the ashes, the Lee family bought back their former plant in Beijing, which constituted just 20 percent of their entire mainland business, and relocated to Germany, renaming the company ROY Ceramics years later.

Lee's family also controlled Lee's Pharmaceutical Holdings - a Hong Kong main board-listed biopharmaceutical group targeting drug development, clinical development, regulatory, manufacturing, sales and marketing on the Chinese mainland. But, Siegfried Lee doesn't have a hand in the pharmaceutical operation.

ROY Ceramics subsequently made a dramatic recovery and began investing in real estate in the US city of Houston with the cash generated from the sanitary ceramics business.

Distinct from property developers on the Chinese mainland, Hong Kong real-estate entrepreneurs have stuck to the same business model for decades - with one part responsible for producing tangible goods to create enough profit to support its real-estate thrust - and Lee is no exception.

"For me, the toilet-fitting business is my cash flow," he says. "And, it's a necessary part for me to set foot in the real-estate market".

Alluding to Hong Kong's skyrocketing housing prices, he wants the city government to take charge of protecting the rights of the general public. "When the SAR government's revenue no longer relies on land sales, it's time to lift land supply to build more homes."

He reckons Hong Kong is experiencing an "outflow period" with its people migrating to other places like Southeast Asia to lead a decent life after selling their assets in the city. If that's the case, supply would overcome demand, and the property market can adjust prices itself.

"Reclaiming land is one effective way for Hong Kong regulators to make amends with the current situation. They should give thought to using the various islands we have around Hong Kong," Lee suggests.

"The government should link the outlying islands with the main city zone through infrastructure projects and implement a land reclamation program with environmental concerns addressed before allowing private property developers to build houses."

Still, owning an apartment in Hong Kong is more like making a rational investment, as the real-estate industry's preservation ratio is relatively high compared with that of the Chinese mainland. The value can be preserved quicker than value added, resulting in a lower but more stable profit margin for investors.

Contact the writer at joycesun@chinadailyhk.com

(HK Edition 08/03/2018 page9)