HONG KONG — Li & Fung, the Hong Kong-based sourcing giant, has made major changes to its top leadership. William Fung will assume the role of chairman while Bruce Rockowitz has been named group president and chief executive officer.
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Victor Fung, the current group chairman, will step down by the next annual general meeting in 2012. William Fung will assume the chairmanship when his brother relinquishes the post. In the meantime, William Fung will take on the role of executive deputy chairman.
“Li & Fung has reached a size and scale that requires a new organizational structure,” said Victor Fung. “These arrangements are designed for Li & Fung to manage even more effectively our diverse and fast-growing business across the world.”
William Fung has been group managing director since 1986. In the years since, Li & Fung has grown into the world’s largest sourcing company with a turnover of $15.91 billion in the year ended Dec. 31.
Rockowitz, who was previously an executive director of Li & Fung and president of Li & Fung Trading, will now spearhead the implementation of the group’s three-year plan, which includes developing the company into three global networks: trading, logistics and distribution.
Rockowitz said the executive-level changes are in line with the company’s recent restructuring, which saw the addition of nine new presidents across the three divisions.
“This has been happening over the last eight to nine months. William and I are the final two pieces of the puzzle,” he said.
In its most recent three-year plan, Li & Fung set a target of reaching $1.5 billion in core operating profits by 2013, with trading, logistics and distribution expected to contribute $700 million, $100 million and $700 million, respectively. Rockowitz said the company is bullish on reaching its goals, noting the acquisition in August last year of IDS (Integrated Distribution Services Group), which is the cornerstone of Li & Fung’s logistics and distribution business.
“We’re very positive,” said Rockowitz. “We’re long-term players, so we feel good about [the three year plan].”
Rockowitz confirmed that Li & Fung is also in various stages of completing more acquisitions, although no announcement on that front will be made until August. In the meantime, the company’s biggest challenge is unprecedented price pressure.
“For everyone the number-one topic and focus is pricing. We went from a 20- to 30-year deficit to inflation, which we will have for the foreseeable future and it happened so quickly. But it seems that it has started to settle down because people are buying fewer units, but at higher prices, it’s freeing up space at the factories,” he said.
Rockowitz also pointed out that Victor Fung will be busy after he steps down as chairman, continuing as a non-executive director of the board and chairman of the company’s risk management and sustainability committee, as well as overseeing the Fung family’s other investments and philanthropic projects.
“These are two extremely driven but extremely nice people,” said Rockowitz of Victor and William Fung. ‘The three of us have a great relationship and nothing’s changing. Victor will still be on the board of [the company] — trust me, he’s not going anywhere.”