From Rocks to Riches--Henry Chuang

Henry Chuang grew up on a farm in a Hakka village in Taoyuan County, Taiwan. In his youth, the thought of moving off to distant South Africa and starting a business there was the farthest thing from his mind.

The Taiwanese economy began growing rapidly in the latter half of the 1970s, and people with degrees in things like political science or literature went into business in droves. Trading companies, in particular, had more orders coming in than they could handle. Many of Taiwan's biggest corporations today got their start back then on a shoestring.

Chuang graduated from National Taipei College of Business in 1978 and joined the tide of those going into the import-export business. His good command of English, an honest character, and the energy of youth stood him in good stead as he took in orders, made purchases, visited factories, inspected products, and came in contact with all sorts of industries and customers. Slowly but surely he acquired the skills needed to run a company.

In the early years of his career, most of Chuang's business dealt with machinery, tools, hardware, and assorted odds and ends. His interest in gems was mostly personal, although he did handle small orders on occasion for processors in Taiwan. As he rubbed elbows with mom-and-pop gem processors, he gradually became familiar with the various operations involved-cutting, polishing, lapping.... As time passed he developed a feel for quality and got to know the people in the business. When he decided to go into gem production himself, he teamed up with his older brother, who had studied jewelry appraising. His decision to process gemstones eventually led him to South Africa, where he has spent the last 15 years.

"A lot of the decisions you make in your life build one upon the other," says Chuang. "Sometimes the decisions actually seem to make themselves for you." Thinking back to when he loaded his entire factory into 20 containers and emigrated to South Africa, the sheer audacity of the move seems rather unbelievable even to Chuang himself. "I was young, and didn't really think a lot about what I was doing. Now I'd think twice," he laughs, "before doing something like that."

His decision to go into gem processing was shaped by external circumstances. Competition among trading companies was growing very intense. Many of the larger manufacturers were setting up their own trading arms, and trading companies had to set up their own satellite factories to remain competitive. Chuang and his brother were importing semi-precious stones from Brazil, South Africa, and India and turning them into finished gems for export primarily to the United States. Business was pretty good, but they had to buy their raw materials from Taiwanese importers, overseas exporters, and mining companies. They wanted to end their reliance on all these middlemen and buy straight from the source. Besides, they were receiving a lot of high-priced orders from Japan for sealstone made of tiger's eye. Tiger's eye was produced in South Africa and exported only in limited quantities, so the two brothers were always thinking about what they could do to secure a plentiful supply.

Then South Africa's minister of mineral and energy affairs happened to stop in at Chuang's Taipei display room, where he encouraged Chuang to set up a factory in South Africa. The idea fit in well with what Chuang and his brother had been thinking about. Chuang threw himself enthusiastically into planning the project. He spent not quite a year buying all the necessary cutting, polishing, lapping and designing equipment, and in 1985 he shipped everything off to South Africa in what was nominally described as a turnkey factory project. He then started anew in South Africa as an exporter.

South Africa, of course, is one of the world's leading gem producers, and South Africa's De Beers has controlled much of the world's diamond trade for over a century. Besides gold and diamonds, the country's renowned mines produce tiger's eye and amethyst (big favorites in East Asia) along with such well-loved stones as malachite, hematite, amber, and many others. Tastes and fashions change from year to year, though, so a gem producer must keep close track of the latest trends if he is to turn out the right sort of gems in the right style and quantity, otherwise unwanted inventories can build up and cause big losses.

Although he's been in the business for almost 20 years, Chuang doesn't dare relax. He goes personally to the mines to look at ores and place bids. Most of South Africa's semi-precious gems are produced in the province of Northern Cape, and in an average year Chuang puts over 100,000 kilometers on his car visiting destinations up to 1,400 kilometers away from company headquarters. Sometimes he will drive some 500 kilometers from Johannesburg to visit a diamond mine in Kimberley before turning north to buy stones in a different mining district. "If you're not in the business, you might think we spend all our time surrounded by sparkling jewels and beauty," says Chuang, "but there's a lot more hardship involved than outsiders can imagine."

The cost of raw materials accounts for about 20% of overhead, but half the secret of success lies in the ability to find good raw materials in the first place. It takes a lot of experience and a certain talent to be able to tell what's good. An expert can usually tell pretty quickly whether he's looking at good raw materials, but even the experts sometimes have to rely on a certain amount of luck. If you're going to bid on stones, says Chuang, you better know what you're doing. Sometimes you can make a bundle if you put in a low bid and come away with high-grade stone.

There are many stages to the business, and you can go wrong at any one of them-buying raw materials, tracking fashion trends, hiring technical experts, getting a good price, judging the reliability of customers... Says Chuang, "The gem business puts every aspect of your personality to the test. Success doesn't come easy, especially in a foreign land like South Africa. When you get down in the trenches and bid against the locals at the mines, you'd better be good."

The first two years in South Africa were extremely tough. Chuang didn't have the spare parts to keep his machinery properly maintained, and poorly skilled local workers caused a lot of raw material to be wasted. But having made the move from Taiwan, there could be no turning back for Chuang. He did what he had to do to make things work, expanding his product line-up and training the workers. He managed to find experienced hands from mainland China who were well-versed in the crucial skills of cutting and polishing. Step by step, he built a "gemstone empire" that spanned the entire process, from cutting and polishing to the production and sales of finished jewelry. His products-pins, brooches, rings, buttons, seals, and much more-sell in South Africa and abroad.

By diversifying the product lineup, the company has been able to find uses for just about every sort of raw material, thereby cutting down on industrial waste and reducing costs. About 80% of all ornaments of semi-precious gems in South Africa are produced by Chuang's Evergreen Gems, while Gem City is responsible for handling orders and all wholesale and retail operations. Together, the two companies constitute the biggest dealer in natural gemstone ornaments in South Africa. Many Taiwanese tourists in South Africa make it a point to go shopping at Chuang's facilities. Chuang will often welcome visiting groups himself and give them a brief but entertaining introduction to the gem business.

In spite of the success, however, Chuang emphasizes the great uncertainty of his venture, and cautions small and medium-sized businesses to be extremely careful about investing and emigrating abroad. "There used to be 18 companies here dealing in gems, but now only three are left. That ought to give you some idea of how tough this business is." The situation has grown especially precarious amidst the great political and economic upheaval of recent years in South Africa. The economy is in decline, unemployment is high, crime is on the increase, and South Africa has switched diplomatic recognition from the ROC to Beijing. Across the board, conditions today are worse than ever.

But all is not doom and gloom. When the talk turns to home and children, his face lights up. "Housing and education here in South Africa are generally very good, even better than what you'll find in Taiwan, much less Southeast Asia or mainland China."

There is an old Chinese saying to the effect that "two people working together can move mountains," and this is certainly descriptive of Henry Chuang and his wife. Mrs. Chuang is well known throughout the local Chinese community for her tremendous charm and ability, and when her husband is away on buying trips, Mrs. Chuang watches over the business. Furthermore, she has trained the domestic help to keep the home spotlessly clean, and has even taught her to cook delicious Chinese food. And it's not just one or two dishes either; she has all the skills of the most resourceful Chinese cook.

Chuang cannot hide the pride he feels in his daughter and son. "Jenny is a good student, and she's got a mind of her own. She speaks perfect English and Afrikaans, she's studying French, and it makes me really happy to say that her Chinese isn't half bad either." His son, who was born in South Africa, can also speak Zulu, which his sister doesn't know. "Of course, he has to be able to speak Chinese too. Every family here has to maintain its Chinese cultural heritage."

As deputy chairman of a leading South African Taiwanese community organization Chuang spends a lot of time organizing community activities, and these help the local Taiwanese to keep their culture alive in distant South Africa. Chuang also serves as chairman of a Taiwanese business association established by the Overseas Chinese Affairs Commission (OCAC). For the past ten years, OCAC has organized ten-day seminars every year. Geared to the needs of Chinese business persons overseas, the seminars focus on turnkey factory exports, trends in international trade, and other overseas investment issues. Taiwanese businessmen have found the seminars extremely helpful. For the past two years, furthermore, OCAC has been encouraging participants to stay actively involved between the seminars in permanent organizations, and this has resulted in the establishment of overseas Chinese business associations on five major continents. These organizations are proving a big help to Taiwanese businesses in their efforts to make their way in foreign lands.

As I listen to Henry Chuang describe his experiences doing business in South Africa, it occurs to me that outstanding Taiwanese businessmen like Chuang are themselves just like his raw gemstones, getting cut and polished by the challenges they face overseas, until at last they glitter with a radiant brilliance. Take a closer look. He's giving off a glow of sorts, isn't he?

Take a stroll through Henry Chuang's Gem City. It's not only an education in the process of preparing gemstones, it's a warm and colorful dreamlike experience.

Take a stroll through Henry Chuang's Gem City. It's not only an education in the process of preparing gemstones, it's a warm and colorful dreamlike experience.

Who wouldn't envy Henry Chuang and his wife walking hand-in-hand through their beautiful yard? They crafted it themselves.

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