BUD Fund Special Fund Application and Quotation Guidance

The BUD Special Fund provides grants of up to HK$7 million to support Hong Kong businesses in investing or expanding into Mainland China or economies with which Hong Kong has signed free trade agreements. The scope of BUD funding includes projects related to brand development, upgrading and transformation, and/or expansion into Mainland China and free trade agreement economies. Upgrading and transformation can involve transitioning from an Original Equipment Manufacturer (OEM) to an Original Design Manufacturer (ODM) or Own-Brand Manufacturer (OBM), product strategy, new product development, manufacturing technology upgrades, process and business automation, management systems, business process reengineering, quality improvement, and enhancements in warehouse management, fleet management, and distribution management systems.

Segmented production line expansion is advantageous for BUD Fund applications. For example, when a Hong Kong business establishes a production line in ASEAN countries and applies for the BUD Special Fund, they can receive funding for leasing/fit-out of new units, utilities, purchasing or leasing machinery and equipment, and even acquiring molds, specialized, and computer hardware/software for manufacturing new products.

The government sets a maximum funding limit of HK$1 million for each BUD Special Fund project. When formulating their BUD Special Fund project application strategy in line with their investment plans, Hong Kong businesses should avoid affecting the approval process due to the project’s scale and budget being too large. Evaluating the project’s complexity, required time, and funding for each stage and breaking down the investment plan into different projects can provide more flexibility in project execution.

For the enhancement of existing production lines, after multiple rounds of optimization, BUD Special Fund applications for purchasing machinery, equipment, or molds with the goal of expanding capacity have been accepted. Given the unpredictable economic climate, some businesses view production line downtime as an opportunity to restructure internal production lines and use funding to upgrade equipment, waiting for the right time to rebound.

Crystal Clear Toys Utilizes BUD to Relocate Production Lines to Cambodia

Crystal Clear Toys Manufacturing Limited, a medium-sized toy manufacturer in Hong Kong with over thirty years of history in the toy industry, primarily operated its main production lines in Guangdong. However, due to rising production costs in recent years and fluctuations in the economic environment, the company faced significant pressures. This situation became even more challenging when disruptions, such as the COVID-19 pandemic, led to production line shutdowns.

During this difficult period, the company’s leadership decided on a strategic realignment. They recognized Cambodia as an attractive manufacturing base due to its lower production costs, abundant labor resources, and free trade agreements with multiple countries. Consequently, Crystal Clear Toys Manufacturing decided to relocate a portion of its production lines to Cambodia.

To execute this plan smoothly, the company applied for the BUD Special Fund. With the grant, company executives started purchasing machinery, equipment, and molds required in Cambodia. Simultaneously, they established partnerships with the local government and industrial zones to ensure a smooth relocation and restart of production lines.

The funding not only aided Crystal Clear Toys in successfully transferring its production lines but also provided training and technical support, enabling the company to adapt quickly and enhance efficiency in the new production base. Moreover, due to Cambodia’s favorable geographic location, the company could conveniently provide faster deliveries to its Southeast Asian customers.

As a result, with the assistance of BUD funding, Crystal Clear Toys not only weathered the economic downturn but also achieved greater success in new markets.

Crystal Toy Utilizes BUD to Relocate Production Lines to Cambodia

Crystal Toy Manufacturing Co., Ltd. has over thirty years of history in the Hong Kong toy industry, specializing in the production of high-quality plastic toys. While the company had experienced steady growth over the past decade, increasing production costs in China and uncertainty in the global economic environment began to put pressure on its profit margins.

The company’s management saw the potential of Cambodia as a new manufacturing hub, especially considering the country’s recent economic growth, favorable policies for foreign investment, low labor costs, and production expenses. Consequently, Crystal Toy Manufacturing decided to establish new production lines in Cambodia.

To ensure the success of this strategy, Crystal Toy Manufacturing applied for the BUD Special Fund. Upon approval, the company initiated a series of actions, from acquiring advanced toy manufacturing machinery and molds to establishing a new factory in Cambodia and training local staff to ensure production quality and efficiency.

An important part of BUD funding was technology transfer. With the assistance, Crystal Toy Manufacturing was able to transfer the expertise and technology it had accumulated in Hong Kong to Cambodia, successfully establishing production standards in the new location that matched those of its Hong Kong factory.

Before long, the company’s new factory in Cambodia was operational, significantly reducing production costs and expanding sales to Southeast Asian markets. With the success of this endeavor, Crystal Toy Manufacturing began considering further expansion of its production bases in other Southeast Asian countries.