Union Concrete

Executive Summary

I recommend that Unicon should pursue the blanket approval process quickly. With the market due to change and allow new players into the market after the hand over to the PRC, our competitive edge is dependant on the preapproval of our products.

We should review our current production process and consider no longer offering products that are not core to our business. Stairs production takes up valuable space that may be reallocated to more profitable products and can be outsourced if the need should arise. Facades, slabs and partitioning walls will be produced in batches and made to stock rather than made to order. This will allow better use of time for staff and machines. A material resource planner and inventory management system will help to accurately forecast the future demands in the industry. Going forward, these systems will also be invaluable with any expansion Unicon may anticipate.

Introduction

UNICON CONCRETE PRODUCTS (H.K.) is part of ITC (International Tak Cheung) Holdings Ltd. They specialize in the manufacture of precast concrete products such as facades, slabs, stairs and partitioning walls. These products are used in large, high-rise residential, office & industrial complexes. The largest chunk of Unicon’s sales (app. 80%) is to the Hong Kong Housing Authority.

HONG KONG

Important centre of economic activity in SE-Asia, it is the economic gateway to People’s Republic of China (PRC). Hong Kong has the world’s largest container port. Hong Kong lacks affordable housing with 6 million people on only 1076 sq kms, there is a serious space crunch. Accordingly Hong Kong boasts the most expensive property in the world. An 800-1500 sq foot apartment in Hong Kong rents for HK$15-35 per sq foot per month and HK $5500-8000 to purchase. The time of this case is set just prior to the turn over of Hong Kong and the start of “one government, two systems”

Issue Identification

Concrete Construction Market

• Precast Concrete Products sold to General Contractors in Hong Kong

• 2 Options for building, Traditional Method or assembling precast concrete facades & slabs

• Not enough market capacity to build all the required buildings 20 market max, 179 needed

• Non standardization of precast products available

Unicon specific issues

• Specifications do not favor changes at the time of superstructure tender. Time is too short to have them approved

• Shortage of skilled labor