Whether making batteries or woofers, GP's Lo sways to the rhythms of geopolitics

Chairman of Hong Kong's consumer battery giant has spent a lifetime dealing with uncertainty in markets

- Ravi Velloor

If you thought this whole headache of geopolitics roiling business was a recent phenomenon, you need to hear from Victor Lo, the Hong Kong-based business figure, art collector and music buff.

The chairman and chief executive of Hong Kong's consumer battery giant Gold Peak Technology Group - which also makes the KEF and Celestion audio equipment - and its Singapore-listed subsidiary, GP Industries, has dealt with it almost all of his working life.

Back in September 1982, for instance, when Hong Kong was still a British colony and Mr Lo was a decade into working in the company founded by his father in 1964 as a maker of 9V dry batteries, then British Prime Minister Margaret Thatcher arrived in Beijing for talks with Mr Deng Xiaoping to discuss the territory's future.

Emerging from the highly contentious negotiations, Mrs Thatcher stumbled and fell on the steps of the Great Hall of the People.

A superstitious East Asia took it as a bad omen, and the Hong Kong dollar crashed. Within a week of the visit, the Hang Seng Index had dropped by 25 per cent, and a month later, had slumped by half.

"That weekend, I called all my managers in and said 'What do we do?'" recalls Mr Lo, whose batteries compete with brands such as Duracell and Energiser. "We decided that when the markets open on Monday, we will sell all our US dollar income for the next six months. Our income was (mostly) in US dollars, while our costs were in Hong Kong dollars."

The following year, the Hong Kong Monetary Authority announced that the local dollar would henceforth be pegged to the US currency at US$1: HK$7.8, where it has stayed since.

Gold Peak's projections for the year had been for the local currency to average US$1: HK$6. So the peg turned out to be a windfall, when US income was translated into the home currency.