The Dragon Soars

Corporate Profile

By Carmen Pang,Executive EditorThe Dragon SoarsLung Moon finds success in woven tapes.

Chan Fuk-Wah, founder of Lung Moon Textiles, named the company after a popular Chinese saying
that denotes fame and prosperity.There is a Chinese saying that goes something like this: As soon
as one advances through the dragon gate, one’s value increases hundred folds. It was for this
saying that a Hong Kong businessman named his company Lung Moon (lung, in Chinese, means dragon,
and moon means door) and launched his entrepreneurial dream some 30 years ago.Lung Moon Textiles
Ltd., established in 1974 by Chan Fuk-Wah and his wife, is today a $7 million privately owned
enterprise that manufactures woven tapes for well-known global brands, such as Tommy Hilfiger, Gap
and DKNY, among others. Recalling the inspiration behind the Lung Moon name, Chan simply said, “We
like to be famous.” That, and because the dragon symbolizes luck in Chinese beliefs.

Kenny Chan, Lung Moon’s production manager, with dyeing and finishing machinery by
BreitenbachHumble BeginningsChan started his business as a small-scale thread and yarn
manufacturer. He soon noticed the popularity of woven tapes in applications such as handbags,
garments and other fashion accessories. Seeing that suppliers of woven tapes were few and far
between in the early ’70s, Chan established Lung Moon to capture this growing market. After turning
a profit early on, Chan expanded his business by relocating his factory from company headquarters
in Hong Kong to China in 1992 to take advantage of the country’s low land and labor costs. Today,
the company employs about 500 people who produce 150 million yards of woven tapes (including satin
ribbons, velvet tapes, jacquard tapes, care labels and woven-edged labels) annually.According to
Chan, about 80 percent of Lung Moon’s products are sold to exporters or apparel manufacturers in
Hong Kong and the rest are sold directly to overseas buyers. Its two divisions — Lung Moon Elastic
Weaving Factory and Lung Moon Weaving (Zhongshan) Ltd. — operate three plants, including an inhouse
dyeing plant that was set up to meet U.S. customers’ demands, in the city of Dongguan in Guangdong
province. By the end of 2004, an additional factory in the city of Zhongshan will be
operational.“The company business has grown three times since we moved to China,” said Chan. “We
have now about 300 Jakob Müller looms. In the new factory in Zhongshan, we can allocate about 1,200
looms.” In addition, the new 20,000-square-meter plant will house a number of dyeing and finishing
machines by Switzerland- based SB Breitenbach Maschinen AG.The company has a long history with
Switzerland-based Jakob Müller AG. Chan first saw the Müller jacquard-driven narrow fabric weaving
machine at ITMA 1995 in Italy. Impressed, he quickly acquired a number of the machines and has
since expanded the company’s equipment to include Müller’s Varitex narrow fabric looms. Chan said
the printed ribbons manufactured by the Varitex machines have better print quality and softer hand.

From left: Kenneth Kwan, Jakob Müller Hong Kong China assistant general manager;Bill Chan,
Lung Moon sales manager; Chan Fan Miu-Yung, wife of Chan Fuk-Wah; ChanFuk-Wah, Lung Moon director
and founder; Raffaele Micheletti, Jakob Müller HongKong China general manager; Kenny Chan, Lung
Moon production managerFuture Challenges And OpportunitiesChan believes the immediate challenges
facing his company are intensive competition, energy shortages in China, and fluctuating raw
material and transportation costs. He said increasing oil prices, as well as more stringent checks
by foreign customs officials and logistics companies in fear of terrorism, have increased
transportation costs, resulting in thinner margins.To overcome the challenges, Lung Moon reinvests
about 3 percent of its revenues in research and development.“Despite fierce competition, the use of
imported, more sophisticated machines and technology allows us to sell our products at a premium,”
said Chan, “because our production cycles are shortened and our quality is more stable.”In order to
provide a full package of products to its customers, Chan said the upcoming phase of the company’s
development, after weaving, is to provide dyeing and finishing inhouse. Following that will be to
bring the printing process into the company as well.“Our customers require a betterquality
product,” he said. “Only with full control of the processes can we guarantee good quality.”

Winter 2004