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Sole Survivors

Monday, June 30, 2008 – The Standard

German and Japanese machines whirl endlessly in one of Hong Kongs few remaining spinning mills as the droning sound of raw US cotton being spun into thread for clothing made in the mainland hums 24 hours a day.

The mill is one of only two remaining in the city where more than 30 thrived just 20 years ago.

This one has only been able to survive the exodus towards cheaper labor in the mainland because it is so heavily mechanized.

But mill owner Woo Pat-nie, the third generation of his family to run the company, now faces another challenge to maintain his competitive edge slashing his carbon footprint.

The companies that are going to make the best of the material resources are going to survive and everyone else is not going to survive. Reducing your impact on the environment is crucial, Woo said.

Woos company is at the vanguard of a realization among a currently small number of factory owners in Hong Kong and elsewhere in southern China that greenhouse gas emissions must be dramatically cut to prevent catastrophic global warming.

He has joined with environmental pressure group WWF in developing a carbon labeling system, which aims to provide a simple measure of how effective factories have been in reducing emissions of carbon dioxide.

The system will be similar to the labeling system used to measure the efficiency of refrigerators.

Chinas rampant industrialization in recent decades has meant it is set to overtake the US as the worlds number one source of greenhouse gas emissions, prompting criticism it is not doing enough to halt global warming.

But Woos move, along with around a dozen fellow factory owners, is not simply an assertion of green credentials he is hard-headed enough to recognize the financial advantage of cutting his energy output as costs rise on rocketing oil, gas and coal prices.

Everyone is facing severe cost pressures. On one side we have the commodities increasing in price, on the other side we have a slowing economy, but buyers are still asking for discounts, Woo said.

Early indications show that the scheme could reduce the companys energy bill by between 10 and 20 percent, the equivalent of the energy needs of almost 2,000 homes, said Woo.

To save 20 percent on your electricity bill and to be able to reduce energy consumption when the whole of China is lacking energy? It is a no brainer.

Liam Salter, head of WWF Hong Kongs climate and energy program, said that the scheme, which he believes is the first of its kind in the world, will allow participants to prove to Western buyers their carbon credentials.

Salter said commitments from US retail giant Wal-Mart and British supermarket Tesco to reduce the carbon footprint of their entire supply chain had created an opportunity for such innovation.

The nightmare scenario for manufacturers is that buyers come out with five different requirements on carbon, which just pushes up costs. This project gives a chance for manufacturers to differentiate themselves in front of buyers, he said.

Initial signs are positive.

Since Woos Central Textiles and fellow manufacturers launched the Sustainable Fashion Business Consortium, a group which aims to promote sustainable development in Chinas clothing industry, this year, they have been contacted by Tesco about their work, he said. The scheme will assess a factorys systems and technologies and the success it has made in reducing its overall carbon dioxide emissions.

WWF hope to trial the system this year before encouraging factories across the Pearl River Delta to use it.

More than 30 percent of the worlds clothes are made in China, mainly in the belt of factories across the border from Hong Kong.

Alex Yeung, from the Hong Kong- based Clothing Industry Training Authority that will train industry workers to use the program once it has been tested, said the initiative showed that Chinese factories were keen to promote a more positive image, following safety and labor scandals that have dogged them over the past two years.

We want to show that we can do more than be pushed, that we can be more proactive [in dealing with problems], Yeung said.

Salter concedes the program will initially be small scale, but insists that if a robust, easy-to-use system can be developed, it could have a significant impact, on both manufacturers and buyers.

This mechanism will help us see how serious the Western companies are, he said.

This is not about bullying your factories into becoming low carbon. You are going to have to offer support to factories wanting to improve.

Woo, who also owns a huge spinning and weaving operation in Guangdong, played down the need to satisfy Western buyers and insisted the move was not just motivated by the need to survive.

It is every factory owners responsibility to be sustainable on an ongoing basis. It has to be sustainable in a business sense, but also in an environmental sense, he said.


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