When U-Right International started to invest in nanotechnology in 2001, the traditional Hong Kong fashion manufacturer had not expected its business to pay off so quickly.

Then came the SARS epidemic in the spring.

The infectious disease spurred huge demand for medical products - including masks and protective gowns, which U-Right processed with nanotechnology.

Covered with a layer of protective coating on the surface and around fibres, nano-processed garments are water and stain repellent, thus saving time and laundering costs.

"We were originally involved in the technology for maintaining our profits, but the SARS outbreak really has helped in the promotion of the technology," Leung Ngok, U-Right chairman, told China Daily.

The company's profit jumped by 98.2 per cent for the six months ended September.

"In order to maintain the group's profits, we should develop more high-tech features in our products," Leung said.

At present, around 20 per cent of U-Right garments have gone through nano-processing.

"Consumers now do not just compare the prices of goods, but they look at the multi-functionality of the products as well," Leung said.

The Hong Kong-listed company, which operates more than 25 fashion outlets in the city, has expanded its retail market beyond the territory and beyond the mainland. Its apparel retail market has a sales network of more than 300 distribution points on the mainland, covering over 100 cities and around 15 franchise shops can be found in the Middle East.

U-Right is not just a garments retailer, but has also turned into a technology developer.

The company invested in Swedish Texcote Group's nano-processing technology, or Texcote processing, in 2001 and obtained the technology and a patent agreement a year later. The investment in nanotechnology business cost U-Right a total of more than HK$100 million (US$12.8 million).

Besides applying this technology to its brand products, the company processes textile products with the technology for other manufacturers and acts as the distributor of Texcote technology by licensing the patent to its partners.

U-Right's Shenzhen plant has a capacity of around 200,000 articles of nano-treated garments a month. It is constructing a new processing plant of 300,000 square feet in Shunde, Guangdong, which will have a production volume of two million items per month, and is expected to commence production in May next year.

U-Right's Texcote business generated a turnover of HK$53.03 million (US$6.8 million) in the first half ended September, representing an increase of about 16 times from a year earlier period and contributed to 16.8 per cent of the company's total turnover for the first half, compared to 1.2 per cent a year earlier.

"In the long run, I can see increasing focus of the company to be put in the Texcote technology business," Leung said.

He expects the percentage of the company's total turnover contributed by the Texcote business to reach more than 40 per cent by the end of 2006.

"The next stage of our Texcote business will be seeking strategic partners to promote the advantages of the technology and to further explore its various applications," Leung said.

Besides garment products, the technology can be used on shoes, cloth, ties, caps, household products such as bedware and furniture, fabric toys and handbags.

According to Leung, U-Right is now studying the application of nanotechnology to paper, glass, tiles and paint. At the same time, the company is conducting research and development on additional functions of the technology, such as anti-bacteria, anti-ultraviolet, and fire resistance.

Following the signing of the Closer Economic Partnership Arrangement (CEPA), U-Right has also eyed juicy opportunities brought by the pact.

Leung said the company hopes to get more Texcote business, as foreign companies may be able to enjoy the zero-tariff concession under CEPA with their goods processed by the technology.

"Many foreign companies, especially those in Europe, have shown interest in the idea," Leung said.

(HK Edition 12/31/2003 page7)