Bag supplier wants U.S. foothold

By Dan Nakaso
Advertiser Staff Writer

Patrick Lau failed at his first attempt to import products from his uncle's Chinese plastics company.

'Iolani graduate Patrick Lau and his wife, Mio, are director and director of operations, respectively, of Savor Brands, a food-packaging manufacturer based in China. Richard Ambo • The Honolulu Advertiser

Then Lau turned to plastic bags and other "flexible food packaging" in November and his Savor Brands Inc. has since signed up 20 Hawai'i food customers.

Lau hopes Hawai'i will be the first U.S. foothold for Savor Brands and his uncle's $640 million company, Foshan Plastics Group Co. Ltd. based in Guangdong Province.

"We set up this operation to serve the local companies," Lau said. "But our main focus is the Mainland."

Savor Brands' sudden appearance in the relatively small world of Hawai'i wholesale plastic packaging means more choices for customers and some concerns that even more local business will give way to sometimes-cheaper Chinese imports.

Wayne Yamada, general manager of Wholesale Unlimited Inc., which wholesales retail snack foods, had been looking for a company to provide sealable bags and Savor Brands offered the lowest price.

Yamada has since given up on his Japanese-brand bags and ordered 1 million plastic Savor Brands bags for his company's more than 400 crack-seed products — from cashews to cuttlefish.

"The quality they could meet," Yamada said, "but the cost was much better."

Pricing was one of the key decisions for Lau after he set up a four-person office in Kaka'ako's Foreign Trade Zone for Feng Zhao Zheng, his uncle and chairman of Foshan Plastics Groups.

"China has a bad image of low-quality," Lau said. "So if I came in with something that was a dirt cheap, a too-good-to-be-true thing, that wouldn't be good, too. If it was cheaper than cheap, I'd be skeptical."

Lau said, however, that China's lower labor costs means he can continue to offer lower prices than U.S. competitors.

"We can sustain the pricing, that's not a problem at all," Lau said. "We have economies of scale."

The idea behind Savor Brands was to test plastic products that might appeal to American businesses, beginning with Hawai'i customers.

Lau, 31, was born in Honolulu and graduated from 'Iolani School in 1991. For some of his business deals, Lau has tapped into home-grown connections. And some of Lau's customers consider Savor Brands more of a local company than one based in China.

"It's family oriented," said Karen Fujimoto, the owner of Carousel Candyland in Kahala Mall.

Lau, she said, "can tell his uncle if there's anything wrong with the bags, rather than going through a middle man, which can get very, very complicated."

Some of Lau's competitors insist they're not worried.

"We're used to being the most affordable in the Islands. So if they have better pricing, we're just going to have to compete," said Chris Lindsey of Islands Marketing, a food processing and packaging machine company. "We're really proud to have our (bags) made in the United States. Chinese-made things are not usually as good quality."

Gilbert Yamada, one of the owners of packaging wholesaler KYD Inc., said Hawai'i food packagers have long been doing business with Asian bag producers.

"You've got product coming out of Korea," Yamada said. "You've got product coming out Japan. You've got product coming out of China. That's nothing new."

KYD's bags are made in Hawai'i, Yamada said, so "our labor costs are higher. Price wise, we cannot compete. But we have the same opportunity to bring in from foreign sources, too. If they have a better price, we also have contacts to bring in these plastic bags from the Orient."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.