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Mr. Frederick Kan, Chairman of Climax International Company Limited

Top level Outstanding Canadian Chinese

Mr. Frederick Kan, Chairman of Climax International Company Limited, a company listed on the Hong Kong Stock Exchange.

Mr. Frederick Kan was born in a relatively well-to-do family. In the sixties, the turmoil in 1967 led to the first wave of migration from Hong Kong to Canada and that led Fred to Vancouver in 1968 where he subsequently obtained his Bachelor・s degree from the Faculty of Commerce at UBC. After graduation, he gained some valuable banking experience with Imperial Bank of Commerce and Business Development Bank.

Mr. Frederick Kan

As a faithful eldest son and following the Chinese tradition, he returned to Hong Kong in 1978 to manage his family fan manufacturing business.

His participation of the family business was timely and it hit a boom. Expansion ensued. A joint venture with capital/interest from Saudi Arabia led to the establishment of a separate factory at Tai Po Industrial Estate. Other joint ventures were subsequently set up in Malaysia which had since gone public.

After playing an important role in re-organizing the family business in or about 2000, Fred could have rested and led a life of relatively comfort and enjoyed his rounds of golf. But a challenge came to test his commercial skills.

Climax International Company Limited was established by the Fung family some 50 years ago which grew to become the world・s leader as a manufacturer in photo albums and stationery and went public in 1992. At the time, the Company reached its zenith with sales of around HKD500 million and a profit of about HKD70 million.

After the death of its patriarch, the Company had suffered from power struggle and other matters and started to go downhill by losing an average of HKD50m annually since 1996 with an outstanding bank debt of approximately HKD500 million.

After long negotiations, which took one and half years, Fred entered into the second phase of his career and took over Climax・s management and became its Chairman on January 11, 2001.

At the time, Climax was facing very stiff and competitive market conditions but after taking over the management, Fred・s group was able to increase the Company・s turnover by more than 20% for the short period from April to mid-June 2001 and undertook stringent cost control measures. There was also reduction in interest expenses and the Company・s loss attributable to shareholders for the year ended March 31, 2001 was cut down from around HKD50 million a year ago to around HKD32 million.

At the same time, high-level personnel changes were made during the year, both in the composition of the Board of Directors and the structure of senior management. The installation of a new management team enabled the Company to tap into a wide pool of experience in manufacturing marketing and finance. Such measures broadened significantly, and beneficially, the expertise which the Company could draw on.

Debt re-structuring exercise was implanted by the subscription of 2,000,000,000 new shares by a holding company which became the controlling shareholder and the cash injection allowed the Company to reduce bank borrowings by HKD90 million and the provision of additional working capital.

The improvement measures had enabled the Company to return to its full financial health. The first year・s measures had seen 52% drop in the ratio of its total bank borrowings to net assets and maintained a robust market presence across its businesses. The turnover for the year ended March 31, 2002 was increased by 5.52% to around HKD320 million on which a profit attributable to shareholders of around HKD12 million was achieved. This was significant achievement as the pattern of consistent losses - the last financial year・s loss was in the region of around HKD32 million.

With this encouraging result, the Company was well on its way to complete recovery and reinvigoration of business activities. It also restored considerable confidence in its clients, suppliers and business partner alike, of its viability.

In the meantime, the new management team continued to implement rapid and effective changes in production, sales, marketing and finance drawing on its wide pools of expertise and extensive experience in the industry.

The new vitality had resulted in the designation of the group by its most important USVbased client, Wal-Mart, as its :International Supplier of the Year; and a 25 % increase in order value from the same client.

Fred is a devoted husband and father and married to his childhood sweetheart, Evelyna. His devotion and support has allowed his wife to continue her activities as a free thinking artist actively involved in community, charitable and educational affairs for the benefit of the society. He has two sons, one working as an architect in Boston and the other has his mother・s attributes in arts and is a recent graduate specialized in computer animation.

Eyelyna & Fred will be celebrating their 30 years together at Grand Hyatt on September 1, 2003.

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