PAQ International, which also supplies its products to companies such as luggage brand Samsonite and French supermarket Leclerc, will use the funding to assist its move into retail later this year.

Chief executive Kelvin Yau states that PAQ plans to acquire other manufacturing and distribution businesses in China, as well as developing a retail business in territories including China and the UK. The company intends to position its retail outlets inside or close to major electronics stores.

Nomad and broker Zimmerman Adams led the fundraising, with Hichen Harrison’s assistance as co-broker.

PAQ was established in 1996 providing a low-cost manufacturing platform for original equipment manufacturers (OEMs). In recent years it has shifted its focus towards its higher-margin business of own-branded bags, improving gross profit margins from 10.6 per cent in 2004 to 38.2 per cent in 2006.

The company’s audited turnover for 2006 was HK$22.4 million (£1.4 million) with operating profits of HK$10.0 million.