Esquel Group

Esquel Group is one of the world's leading producers of premium cotton shirts, with production facilities in China, Malaysia, Vietnam, Mauritius, and Sri Lanka, and a network of branches servicing key markets worldwide. The company's operations are vertically integrated, from producing cotton, buttons, and packaging to design and manufacturing.

Company history
Esquel was founded by Yang Yuan Loong in 1978. The company was one of the first to invest in China when the country opened up in the 1970s. Today the company is led by the founder's daughter, Marjorie Yang.

Historical financial results
2000 Revenues: USD 500,000,000

Business strategy
"Esquel's core strategy for years has been to go upmarket. In the late 1980s that meant our operations had to reach Japanese quality. Now we want to reach Italian quality, which is the best in the world. To do that, I wanted to invest $150 million in a brand-new fabric mill to increase our capacity and make us the mill with the highest quality in China... We grow our own high-quality cotton in western China--why not make the most of it? My bet is that with the end of quotas, more people are going to invest in the low end than the high end. If Esquel can reach the pinnacle of quality, profit margins are better and competition is less. The first company in China to get there is going to have a big advantage... it is critical if we want to be the best shirtmaker in the world. My goal is for Esquel to be a billion-dollar company by 2008, double what we are now." -- Marjorie Yang interviewed for Fortune Nov. 14, 2005

Labor
History:

2000 Esquel joined Global Compact

2002 Esquel adopted company code of conduct

Policy:
 * member of Global Compact
 * all factories certified by WRAP
 * company code of conduct (based on WRAP and codes of major customers)

Campaigns against company: None found.

Major reports:
 * 1) Global Compact Communication on Progress
 * 2) Measuring Sustainability: A Snapshot of a Hong Kong Company

Human rights
2000 Esquel joined Global Compact

Environment & product safety
History:

2000 Esquel joined Global Compact

Policy/projects:


 * Environmental strategy
 * cost: USD50-100 million a year, or 10 percent of the company's USD500 million fixed assets.
 * ISO 14001 certification for plants in China, Malaysia, Mauritius and Sri Lanka
 * China: USD29 million low-emission thermo-power plant, which produces a steady supply of electricity (up to 30,000 kilowatt) and steam (100 tonnes/hour). Compared with normal power plants, Esquel's has a higher energy efficiency rate of 53 percent versus the 40 percent in others, and a lower operation temperature of 900 degrees Celsius versus 1,100 degrees in others. It also controls emissions with its circulating fluidized bed, which adds limestone into coal to reduce sulfur-oxide emissions, and its electrostatic precipitator in reducing emissions of particulate matters. As a result, its emissions of sulfur dioxide (around 1,000 milligrams per cubic meter), nitrogen oxides (less than 250 mg/m3) and dust (around 120 mg/m3) all meet or exceed the Guangdong and the national emission standards. (also see Hong Kong Chamber of Commerce Clean Air Initiative)
 * China: USD7 million wastewater treatment plant, which biologically treats the 22,000 tonnes of wastewater produced daily by the Pearl River Delta factory.
 * China: organic cotton farms in Xinjiang province

Reports
 * 1) Global Compact Communication on Progress
 * 2) Measuring Sustainability: A Snapshot of a Hong Kong Company

Social responsibility initiatives

 * Support for schools in Xinjiang region of China: book donations, renovations, exchange program for high school students from Hong Kong and United States, Eco-Mobile, scholarships for students whose parents are HIV positive

Lines of business

 * Cotton production
 * Yarn spinning
 * Fabric production (cotton woven & knits)
 * Garment production (primarily cotton shirts)
 * Accessories (buttons, labels, tabs, packaging)
 * Retail (two shops in China for PYE brand)

Units/subsidiaries
Cotton group: Textiles group: Apparel group: Accessories group: Retail group: Sales offices:
 * Akesu Esquel Agricultural Development Co. Ltd. (China)
 * White Field Farming Co. (China)
 * Xinjiang Esquel Agritechnology Co. Ltd. (China)
 * Guangdong Esquel Textiles Co. Ltd. (China)
 * Turpan Esquel Textile Co. Ltd. (China)
 * Xinjiang Esquel Textile Co. Ltd. (China)
 * Guangdong Esquel Textiles Co. Ltd. (China)
 * Changzhou Esquel Knitting Apparel Co. Ltd. (China)
 * Changzhou Esquel Garment Co. Ltd. (China)
 * Ningbo Esquel Apparel Co. Ltd. (China)
 * Yang Mei Garment Factory (China)
 * Way Yat Industrial Limited (Hong Kong)
 * The Eastern Garment Manufacturing Company Sdn. Bhd. (Malaysia)
 * Esquel (Mauritius) Ltd.
 * Polytex Garment Ltd. - Jaela (Sri Lanka)
 * Polytex Garment Ltd. - Kegalle (Sri Lanka)
 * Polytex Garment Ltd. - Koggala (Sri Lanka)
 * Polytex Garment Ltd. - Yakkala (Sri Lanka)
 * Esquel Garment Manufacturing (Vietnam) Co. Ltd.
 * Guangdong Esquel Textiles Co. Ltd. (China)
 * The Eastern Garment Manufacturing Company Sdn. Bhd. - Paper Product Factory (Malaysia)
 * PYE - Beijing (China)
 * PYE - Gaoming, Guangdong (China)
 * Guangdong Esquel Textiles Co. Ltd. Shanghai Office (China)
 * Esquel China Holdings Ltd. Beijing Representative Office
 * Esquel Enterprises Limited (Headquarters) (Hong Kong)
 * Esquel Japan Ltd. K. K.
 * Esquel Apparel Ltd. (United Kingdom)
 * Esquel Apparel Inc. - Columbus (United States)
 * Esquel Apparel Inc. - Madison (United States)
 * Esquel Apparel Inc. - New York (United States)
 * Esquel Apparel Inc. - Seattle (United States)

Brands
Brands marketed only in China. The company's main business is production for other brands.
 * PYE
 * anywear

Customers

 * Abercrombie & Fitch


 * JCPenney


 * Aeon


 * Konaka


 * Aoyama


 * Lacoste


 * Banana Republic


 * Marks & Spencer


 * Brooks Brothers


 * Muji


 * Burberry


 * Nautica


 * Cortefiel


 * Next


 * Daidoh


 * Nike


 * Esprit


 * Nordstrom


 * Gant


 * Polo Ralph Lauren


 * Hugo Boss


 * Right On


 * Ito-Yokado


 * Ted Baker


 * J.Crew


 * Tommy Hilfiger

Suppliers
Esquel's production is largely vertically integrated.

List of largest shareholders
Wholly family-owned

Countries of operation
China, Hong Kong, Malaysia, Mauritius, Sri Lanka, Vietnam, Japan, United Kingdom, United States

Breakdown of sales
> 60% United States

30% Europe & Japan

< 10% China and other new markets

Source:

Breakdown of employees
53.5% China

16.2% Mauritius

14.6% Sri Lanka/Maldives

10.6% Malaysia

3.2% Vietnam

1.8% Hong Kong

0.1% Other

Source:

Primary industry ranking
(Marjorie Yang, Chairman and CEO; 2004 rank: 44)
 * Fortune Global Power 50 (Women) 2005 rank: 41

Executives
Marjorie Yang (chairman & CEO), John Cheh (COO)

Board members & affiliations
Marjorie Yang (Chairman), Theresa Yang (Vice Chairman), Hau Leung Lee (Indep. non-executive director), York Liao (Indep. non-executive director), Daniel Ng (Indep. non-executive director), John Strickland (Indep. non-executive director)

Contact information
12/F Harbour Centre

25 Harbour Rd.

Wanchai, Hong Kong

Tel:(852) 2811 8077

Fax:(852) 2960 6988

http://www.esquel.com

Related SourceWatch articles

 * Worldwide Responsible Apparel Production
 * Conservation International-- Marjorie Yang is CI board member

External resources

 * Esquel Group Website: Corporate News
 * Murphy, C. 2003. "The Daughter Also Rises: Marjorie Yang took over the family shirt business - then turned it inside out." Fortune (European Edition) 148(8): 50-57.
 * Global Compact
 * Global Compact Communication on Progress
 * Measuring Sustainability: A Snapshot of a Hong Kong Company

External articles

 * Global Power 50, Fortune (via CNN Money), November 14, 2005.
 * Murphy, C. 2003. "The Daughter Also Rises: Marjorie Yang took over the family shirt business - then turned it inside out." Fortune (European Edition) 148(8): 50-57.