A company doesn’t celebrate its 150th year of operations in East Asia without having gone through some interesting, turbulent and testing times along the way. Founded in 1866 in Hong Kong, Arnhold has managed not just to survive but thrive after enduring cross-border moves, wars and ownership changes. Its last move occurred in 1949 when the headquarters was transferred back from Shanghai to Hong Kong, where it has remained ever since.
Chamber CEO Shirley Yuen visited Arnold Group’s Chairman Michael Green and his son, Managing Director Daniel Green, to congratulate them on their 150th anniversary.
The company had been in China since its beginnings in the 19th century, except for the period when China was closed off during the 1950s-1970s. After Arnhold was set up in Hong Kong by German national Jacob Arnhold and his partners, the trading company expanded across China to the point where it had 37 offices at the turn of the 20th century, including in Hong Kong. By this time, the headquarters moved to Shanghai in 1881 where it remained through conflicts and the Japanese invasion until the change of government in 1949.
From the post-war period to the present, Arnhold has become a top supplier of construction materials ranging from bathroom fixtures and fittings and tiles, to air filtration equipment as well as its own branded bathware and decorative mosaics. In Hong Kong, they count leading developers as key customers and their products are used in major commercial buildings, apartments and hotels.
The company has several sales offices and a factory in Mainland China, as well as showrooms in Hong Kong and Shanghai. Arnhold’s main customers are in Mainland China and Hong Kong, but it also sells to the U.S., U.K., Europe and Australia.
The Green family has owned Arnhold since 1957, when Maurice Green, who worked for Arnhold in Shanghai and Tientsin, now called Tianjin, before World War II acquired it from the Sassoon Group. Maurice’s son Michael later took over from his father and became the company chairman. Michael’s son Daniel, the company’s present managing director, represents the family’s third-generation leadership of Arnhold.
The company endured a tough time during World War I, when as a German-owned company, it was closed by British authorities, and then later during the Japanese invasion in the 1940s, continued to operate under very difficult conditions. “During the invasion, everything closed in Hong Kong including our office. We managed to squeak through that,” said the chairman Michael Green.
Times were again tough for the company after World War II but this actually led to the Green family acquiring Arnhold from the Sassoon Group, who had bought the company themselves from the original owners in the 1930s.
“Arnhold was owned by Sassoon, one of the largest companies in the world. They made a series of wrong decisions and finally decided to pull out of Hong Kong. Arnhold had not recovered after the war so the Sassoons offered the company to my father,” said Michael. “There were seven staff and my father, whose health wasn’t very strong after he was interned by the Japanese in North China during the war, and he acquired Arnhold with a couple of partners.”
Having started as a trading company, Arnhold had expanded into property, manufacturing and shipping in China. “It’s interesting after this big cycle, we’ve ended up back as a trading company,” said Michael with a smile.
“Clearly there are companies more successful than us,” said the chairman modestly. “The thing is we could have done a lot better if we were more aggressive. But I don’t want to be the richest man in Hong Kong and neither does Daniel. We would like to be one of the most respected families.”
“We put together core values. We try to make it really specific about ethics, how we treat each other and conduct ourselves,” said Daniel.
The family’s origins may be European but it has a long history with Mainland China and Hong Kong, having been in Hong Kong since the late 1800s. The family was in Mainland China during the early part of the last century, then left during the change of government in 1949, before returning to the Mainland when it was opening up in the late 1970s.
This led to Arnhold outfitting two of the Mainland’s first modern hotels, the White Swan in Guangzhou and the Fragrant Hills in Beijing, which the chairman himself was involved in.
“We had good long-term relationships with developers in China that have stood the test of time. I went to talk to the people in China and we got those two hotels. And over time it led to 85 more hotels,” said Michael.
The economy is no longer booming in Mainland China, especially in the property sector, but Arnhold continues to grow its business.
“China is such an enormous place. People say there’s a slowdown and I’m sure there is in some sectors, but a small company of our size can still find opportunities,” said Daniel.
“We’re still seeing certain cities grow, we’re seeing a lot of investment in hospitality and that’s been stable. There’s been some slowdown in residential, but for us, it has been offset.”
Arnhold has also increased its business in overseas markets such as the U.S., the U.K. and Australia, with some degree of success.
“In the U.S., when people work with our company, they remark on how efficient and responsive our company is. It’s a testament to the work ethic in Hong Kong,” said Daniel.
“One of our biggest customers in the U.S. had an internal review of all their suppliers. They gave us a copy and we were rated the best supplier,” said Michael.
The Green family is almost unique in being in Hong Kong for generations and running a family firm for well over half a century while not being South Asian or Hong Kong Chinese. However, as with those other families, Hong Kong is certainly home.
“My father’s parents were from Romania. My mother’s mother was from Russia, her father from Switzerland. So we didn’t have strong ties anywhere we wished to go back to. Hong Kong is our home. Our mindset is how do we make a success here for the next generation rather than make as much money as possible and go back home,” said Michael.
The family feels strongly about the company, which has become a firm part of its identity. “My objective is not to have a professionally-run company, but to always have a family member actively involved. I’ve seen a lot of families develop successful businesses, but when they become a professionally-run firm, they lose the emotional attachment and find it easier to sell their shares so it’s no longer a family business. Our objective is to have continuity,” said Daniel.
Having lived through a lot of major moments in Hong Kong history, Michael is unfazed by the current economic climate and political issues. “I’m very positive. I’ve seen so much worse! There are similar problems all over the world, not just in Hong Kong.”
The chairman said his most worrying moment was actually in the sixties when Communist sympathizers protested in Hong Kong while the Cultural Revolution was going on. “There were many disruptions in Hong Kong and people were even attacking each other.”
Michael does feel that Hong Kong currently has some serious issues. “I think what is significant is if you’re a young person who can’t afford a flat, educate your children, or have a well-paying job, that’s important and that’s the government’s job to improve that. But to change the politics, forget it.”
Daniel is also very optimistic about Hong Kong. “Hong Kong is a very exciting city to work in. There is so much passion about business. It’s challenging because it’s very competitive but this also means it’s efficient. I’ve heard from so many people, you can get more done in one day in Hong Kong than in a week in other major cities,” said Daniel.
As Arnhold continues in its 150th year, the company is not content with staying only in Hong Kong. “Our biggest challenge is to have a truly global reach for our brands. We’re doing that now,” said Michael.
“Perhaps we’ve become too used to how business operates in Hong Kong. Wherever we go, we have more things to learn about how people conduct business. Other people have done it and we are confident we can as well,” said Daniel.
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