Li & Fung Group Chairman Victor Fung yesterday denied a news report that the company will lay off more employees. Fung said this after the Greater Pearl River Delta Business Council Special Meeting.

"The news report that the company would lay off 1,000 staff is totally inaccurate. In fact, the number of staff at year end is higher than the number of the staff at start of the year," he said.

"But in such economic climate we need to cut costs by 10 percent by (among other things) reducing the number of business trips," he added.

According to the Hong Kong Confederation of Trade Unions, it had received news from staff of Li & Fung, a firm that specializes in global merchandizing, that it will retrench 450 employees (or half the size of its toy purchasing department), after it had laid off 60-70 employees recently.

Without explaining if the group had plans to sack 450 staff, Fung, a member of the chief executive-led Task Force on Economic Challenges that deals with the financial tsunami, added it will be the last resort for the group to lay off its staff. But when it does so, it will do it in a careful and responsible manner.

Fung, who is also chairman of the Greater Pearl River Delta Business Council, said it is most important to maintain Hong Kong's competitive edge as an exporter in global trade to ride out the financial storm. He was pleased that the government-run Export Credit Insurance Corporation has recently doubled the insurance guarantee for Hong Kong exporters. Such an arrangement is very important, he said, because it is vital to production order, which creates job opportunities. He added that if enterprises are guaranteed insurance, banks would be willing to offer them loans.

(HK Edition 11/18/2008 page2)