Relevant Legacy

Most Chinese and those familiar with the Chinese cuisine would have tasted Lee Kum Kee sauces in one way or another. It reminds the Chinese of home whenever they consume the sauces and it reminds me of my childhood - I grew up dipping my favorite dishes in their signature oyster and soy sauces. Later, I experimented with its range of sauces such as black beans, chilli and plum and the various premix sauces in cooking. On board a Cathay Pacific flight, I was reminded that I am flying to Hong Kong to get behind the scenes of the brand and what it stands for - as I see an advertisement of its flagship oyster sauce on the inflight entertainment screen at my seat.

My thoughts of meeting a group of senior 'generals' of the company vanished when I was greeted with a youthful team of executives. With their smiles and warm greetings, they whisked a group of us to a café and refreshed us with coffee and cakes, as we waited for another group from Malaysia to arrive.

Business first

Powered by a mission to promote Chinese cuisine worldwide and herbal products (via the Infinitus International Company), Lee Kum Kee International Holdings has grown from selling oyster sauce in 1888 to operating four factories in Xinhui (China), Hong Kong, Kuala Lumpur (Malaysia) and Los Angeles. It also has a sales and marketing office in Singapore.

Despite the economic crisis, chief operating officer George Tsang said it did not impact the business significantly, as the food industry remains recession-proof. "The difference is whether the consumers eat at home or not." He said sluggish growth is experienced in China and Asia, as its US office sees a dip in the restaurant businesses as more are eating at home. "Our business in Europe experienced a slow down due to the currency exchange, but it is picking up. Looking at the markets, our businesses have generally experienced good growth rates."

Food safety mandate

To meet food safety standards, the company's facilities have achieved accreditations for testing for certain compounds in 2001, ISO/IEC 1705:2005 and IAF-ILAC-ISO. Its laboratories are equipped with systems that test for heavy metals, mineral content, raw materials such as oysters and sugar and high-performance liquid chromatography (HPLC) tests for additives, preservatives and antioxidants. In fact, in its 300-people strong factory in Hong Kong, there are more than 40 people in the research and development department. In its Xinhui plant of 2,500 people, it has 100 employees in the laboratory department. The plant is also one of the largest contributors to the town's economy.

With zero tolerance on food safety and quality, the company has embraced a pharmaceutical-grade production process for its sauces. "We value risk assessment and food safety and we invest in government-certified laboratories to inspect materials. We also run people development and training programs to ensure that our development is up to date," said Tsang.

"Our products are in over 100 countries, resulting in a complicated process to meet overseas market demands and requirements on certifications. We have a regulatory and safety team that keeps abreast of the regulatory changes and new European Union whitepapers. We work with our suppliers to comply with the laws and certifications such as hazard analysis critical control point (HACCP), good manufacturing practice (GMP), Halal, Krosher, British Retail Consortium (BRC), ISO 23000, ISO 14000 and ISA 8000, which is a social responsibility accreditation."

Stressing that achieving the various accreditations is for a total quality management system and safety, Danny Khoo, regional marketing manager for Southeast Asia, Middle East and Africa said the company has worked to becoming environmentally sustainable. "Two years ago, the Xinhui facility started using solar energy in its fermentation process and we aim to gradually reduce the energy needed to produce the sauces." Now, about 10 tons of water is heated daily in the plant by using solar energy.

"Leveraging on lean manufacturing, we see results in waste elimination, more accreditations and a sustainable water treatment system," he added. The weight of the glass bottle has also been reduced from 300g to 260g and the company does not use many PET bottles as it considers them expensive to recycle.

Creating the winning formula

To create tasty sauces, staff can volunteer to be part of taste panels consisting of five persons each. They take blind tests lasting 15 to 20 minutes of new and/or improved sauces. Functional lights are used in the test room - red light is used to take the color off the product and spotlights are used to imitate natural lighting. The in-house trained panel usually engages in one session fortnightly.

"The female staff usually forms the majority of the taste panel members. They would have passed our selection process and they like to eat, have sensitive taste buds and are articulate in their responses," said Biggar K.P. Cheung, senior quality assurance manager. "One or two samples are usually used in one session, with the stronger sauce such as chilli being placed as the last sample so as not to overwhelm a milder sauce. Water is usually used to clear the taste in the palate and unflavored rice or noodles are normally used as carriers for the samples."

Using technology

In the control room, the production process is monitored by 16 screens and four computers that show production sequences such as cooking, weighing and cleaning are functioning smoothly. Production data such as cooking temperature, concentration of solutions and raw materials used are stored in computers and can be recalled when needed. Such data is recalled for auditing purposes and to provide product information to its customers.

With 300 tanks and a capacity to produce 6,000 liters of sauces in a production shift of eight hours, the Hong Kong factory uses a hotfill line from Germany that costs HK$50 million ($6.42 million). The factory boasts of packaging lines that include two glass bottle lines, two canned lines and a plastic line.

Grooming the next generation

The family-owned business has seen the leadership of the Lee family grow. The management has for example created the Family Council consisting of members of the Lee family. It has even set up a family learning and development center to equip the family members to better manage the business.

And as part of its corporate social responsibility (CSR) effort, since 1999 the company has donated more than RMB20 million ($2.95 million) to the Lee Man Tat Secondary School. Named after the group chairman, the school also receives yearly scholarships for its students and teachers from the company.

With its best-selling products manufactured using processes

With its best-selling products manufactured using processes by regulatory and certification bodies, as well as taking proactive steps in giving back to the society and the environment, Lee Kum Kee has proven itself to be relevant to the times, while passing on its tradition and its values to generations to come.