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SPECIAL REPORT S
TUESDAY, OCTOBER 3, 2006
INSIDE: NINE-PAGE SPONSORED SECTION IN CO-OPERATION WITH DISCOVERY REPORTS
The market economy has taken root in the eastern states.
Thousands of new businesses have been opened, including many
by western German firms and multinationals. Photo: EPA
Union of the states is
still a work in progress
Issues are still being resolved, but ties with Europe are stronger than ever
T
HE TWO POST-WAR
German states became
one on October 3, 1990 – a
day that reunified
Europe’s most populous nation
less than a year after the infamous
Berlin Wall came down.
During the 40 years they existed
side by side, the Federal Republic
of Germany and the German
Democratic Republic developed
different political, economic and
social institutions. Establishing the
terms of political union proceeded
quickly in the months following
the collapse of East Germany’s
communist order in late 1989.
Uniting Germany economically
and socially has been more
complicated and has demanded
more time than many had
expected during the euphoric
excitement of 1989-90. Even now,
German unification remains a
work in progress.
The first concrete step towards
economic unification came on July
1, 1990, when the Federal
Republic’s deutschemark became
the sole currency of the soon-todisappear East Germany.
Although the East German
mark had become almost
worthless, Bonn agreed to a 1:1
exchange for salaries, wages and
certain categories of personal
savings and a 2:1 exchange for
most individual and commercial
accounts in eastern banks. Implicit
in the agreement on currency
union and the concurrent plans
for merging the economic and
social welfare systems of the two
German states was the
understanding that Bonn would
shoulder much of the financial
burden of closing the economic
gap between unified Germany’s
eastern and western states.
That turned out to be a more
costly undertaking than anyone
anticipated in 1990. Initial
assessments of eastern Germany’s
competitive potential proved to be
far too optimistic. Eastern industry
was mostly technologically
outmoded and heavily overstaffed. The agency responsible for
privatising eastern enterprises, the
Treuhandanstalt, quickly found
that investors had little interest in
acquiring eastern commercial
assets unless offered substantial
incentives or subsidies.
Obsolescence and inefficiency
were made worse by the physical
legacy of the former East
Germany’s economic policies: the
eastern landscape abounded in
toxic waste sites and crumbling
public infrastructure. The joy
sparked by the breaching of the
Berlin Wall gradually gave way to a
more sober realisation of the full
magnitude of the task of
rebuilding the east from the
ground up.
The public and private sectors
responded with a massive
programme of aid and investment.
Transfers to the new eastern states
passed 1 trillion deutschemarks in
the spring of 1998.
Public and private investment
has done much to bring the east’s
basic infrastructure up to par with
the west. Since 1990, 11,263km of
roads and 4,827km of rail lines
have been rebuilt or newly
constructed. More than 500,000
housing units have been built and
3.5 million existing residences
have been renovated.
Eastern Germany’s
telecommunications system was
completely replaced with state-ofthe art technology and now ranks
among the most advanced in the
world.
The market economy has taken
firm root in the eastern states.
Many thousands of new
businesses have opened in the
east, and both western German
and foreign firms, led by
multinational giants such as
Siemens and General Motors, have
set up shop there.
This flourishing and steadily
expanding private sector testifies
to the scale of the economic
change that has occurred in
eastern Germany since unification.
However, the full extent of this
change is often overlooked:
eastern Germany’s economic
progress is invariably measured by
how close it has come to matching
western German performance
levels rather than how far it had
left its old command economy
behind.
Germany’s ongoing public
discussion of social unification has
been able to draw on an
abundance of evidence, statistical
and anecdotal, that has regularly
been offered in the press.
Easterners and westerners alike
have been surveyed often about
their views of one another and
their assessments of the quality of
life since unification. Substantial
as differences of opinion on
specific issues have been, one
general trend has been clear since
the union of the two German
states: few Germans in either half
of the country would want to see a
return to the past.
Even if most eastern Germans
have no interest in turning back
the clock, there has been much
talk of the rise of Ostalgie (“eastern
nostalgia”) and the development
of a distinct eastern identity rooted
in the experience of life in the
former communist state.
Attachment to various customs
and fixtures of everyday life of the
communist era takes many forms.
The decision to change the signals
at pedestrian crossings, for
instance, prompted a tongue-incheek protest campaign
throughout the east not long ago.
Rather than words, pedestrian
signals in Germany rely on
silhouette figures, one standing
and one striding, to indicate when
it is safe to cross the street. The
squat little man who had long
presided over eastern street
corners briefly became a hero after
authorities announced he was to
be replaced with his leaner, more
angular western rival.
As with discussions of
Germany’s economic situation
since 1990, assessments of the
progress of social unification are
usually cast in terms of how far
eastern Germany has come to
resemble western Germany. This
tendency obscures two important
points: the impact of unification
on western Germans has not been
merely financial, and today’s
Federal Republic is not simply a
bigger version of its preunification self.
Unification came as a
consequence of the end of the cold
war. Beyond laying the
foundations for the merger of the
two German states, the peaceful
resolution of the east-west conflict
opened the way for Germany to
play a larger role in Europe and on
the international scene.
Germany, with its sovereignty
fully restored by the 1990 “TwoPlus-Four Treaty”, has extended its
commitment to European
integration by taking a leading role
in helping the formerly
communist states of eastern
Europe on their way towards
membership in the European
Union and Nato.
Unification has also provided
Germany with the chance to
address long-outstanding issues in
its relations with eastern European
nations arising from the war.
Recognition of the change in
Germany’s international status
that came with the end of the cold
war and unification, underlies the
fact that October 3, 1990, marked
the start of a new and more
constructive era.
S2 GERMAN UNITY DAY
TUESDAY, OCTOBER 3, 2006
SOUTH CHINA MORNING POST
MESSAGE
Germany
Population
Capital
82.4 million
Berlin
SchleswigHolstein
MecklenburgWestern Pomerania
Bremen
Hamburg
Brandenburg
Lower Saxony
Berlin
SachsenAnhalt
North Rhine
-Westphalia
Language
Cologne
Saxony
Hesse
RhinelandPalatinate
Thuringia
Frankfurt
Saarland
BadenWürttemberg
German
Ethnic groups
German
Turkish
Other
Bavaria
Munich
91.5%
2.4%
6.1%
(largely Greek, Italian,
Polish, and Russian)
Religions
34%
Muslim 3.7%
Unaffiliated or other
Natural resources
GDP
Agricultural products,
cereals, vegetables,
and livestock
US$2.73 trillion
28.3%
Major industries
Key trading partners
France, Britain,
Italy, Netherlands,
United States,
Belgium, Austria,
China
Iron, steel, coal, cement,
chemicals, machinery,
vehicles, machine tools,
electronics, food and
beverages, shipbuilding,
and textiles
Germany saw a 0.9 per cent increase in GDP in the second quarter of this year, the highest recorded since early 2001. Photo: Reuters
Feel-good year sparks
surprise economic surge
The World Cup is only part of the reason why the business community is smiling
Nick Walker
T IS TEMPTING to think that
the shy smile often seen on
German Chancellor Angela
Merkel’s lips these days is a
reflection of the promising growth
figures emerging from Germany’s
feel-good World Cup year.
After the economic
sluggishness seen between 2002
and last year, the German
economy has moved up a gear to
record a 0.9 per cent increase in
gross domestic product in the
second quarter of this year,
according to the Federal Statistical
Office.
I
Climate
Generally temperate with cool, wet winters and
mild summers
SCMP Graphic
Source: CIA World Factbook
This represented the highest
growth rate since the beginning of
2001, and followed a 0.7 per cent
increase in the first quarter of this
year.
The growth spurt in the world’s
fifth-largest economy has
surprised Germany-watchers.
Coincidentally, this figure
matched exactly growth seen in
the euro zone. Both posted 0.9 per
cent growth in the second quarter,
outpacing the United States and
Japan.
The German businessman is
smiling again, thanks to an
upswing fuelled mainly by
domestic factors, particularly
investment in construction and
equipment.
“If there aren’t any big
surprises in the third and fourth
quarters, then economic growth of
around 2 per cent for the whole of
2006 is realistic,” Bert Rürup,
chairman of the board of
economic advisers to the German
government, told the Handelsblatt
newspaper.
The German economy has
faced huge challenges since the
dawn of the millennium. The
modernisation and integration of
the economy of the eastern third
of the country continues to be a
costly, long-term process, with
annual transfers from west to
east amounting to roughly
US$70 billion.
While eastern cities still show
symptoms of the commandeconomy thinking, remarkable
progress has been made in a
relatively short time. Structural
rigidities in the labour market –
including strict regulations on the
laying off of workers and the
setting of wages on a national
basis – have, some observers say,
contributed to an unemployment
rate that is high by European
standards.
However, these measures have
also instilled a sense of civic
responsibility in employers that
makes German employment law a
model of responsible legislation.
And this legal framework
functions with the vigour and
farsightedness one would expect
of the historical homeland of
socialism.
Germany has a workforce of
38.9 million, a figure that has risen
by 0.5 per cent in 12 months.
“The upswing has gained in
strength and breadth,” said
economics minister Michael Glos.
“The situation in the labour
market has improved noticeably.
The outlook for this year is
downright positive.”
Domestic and international
observers believe the World Cup
this year has contributed to
growth in employment, although
figures to prove this are not yet
available.
In a bid to sustain this year’s
momentum into the medium
term, the federal government has
launched an initiative to
encourage innovation and
entrepreneurialism, and foster
synergies.
Under a recently unveiled
programme, the federal
government will provide
¤15 billion (HK$148.5 billion)
over the next three years to
promote innovative technologies
and improve co-operation
between science and industry.
The key objective of the
programme is to increase budget
expenditure for research and
development to 3 per cent of gross
domestic product by 2010, a goal
formulated by the EU in its Lisbon
Strategy.
The government is already
providing support for hi-tech
start-ups and innovative SMEs
through corporate tax reform and
a systematic reduction of
bureaucracy.
The new programme is
expected to boost financing for
research projects by banks and
investors and improve Germany’s
climate for venture capital
investment.
GERMANYQUIZ
1 How many years has Germany been reunited? 2 What two seas does the Kiel
Canal connect? 3 Where is carmaker Porsche headquartered? 4 How many
times has Germany won the World Cup? 5 What part of Germany is Pope
Benedict XVI from? 6 What is the name of the German-language international
school in Hong Kong? 7 In which countries is German the first language?
8 What are the only four ingredients allowed by law in German beer? 9 What
was the capital of the former West Germany? 10 In which German city is mainland Europe’s busiest airport?
Answers
1 16 2 The North Sea and the Baltic Sea 3 Stuttgart 4 Three 5 Bavaria 6 The
German-Swiss International School 7 Germany, Austria, Liechtenstein,
Luxembourg and in over two-thirds of Switzerland 8 Malted grain, hops,
yeast and water 9 Bonn 10 Frankfurt
Protestant 34%
Roman Catholic
IT IS my great pleasure, on
German National Day, to convey
my very best wishes to all our
friends and partners in Hong
Kong, and to all Germans living
here.
On October 3 each year,
Germany celebrates an event that
changed German history and
world history: the reunification of
our country which was divided by
the Allied Forces after the second
word war.
At the end of 40 years of
separation, it was the people of
Germany themselves who, by a
peaceful revolution, brought
about unification and
contributed to the end of the cold
war.
The unification of Germany is
one of the most successful
political achievements in Europe,
a complex process which in some
ways has been completed
politically and by law, but which
is still an ongoing task in the
minds of the people.
This year, Germany was given
the opportunity to play host to
people from all over the world at
the Fifa World Cup 2006. The
World Cup was appreciated by
our visiting friends as a major
sports event and a celebration of
German hospitality.
Many people coming to our
country already knew about our
famous German virtues such as
discipline and efficiency, but
were surprised by the
overwhelming friendliness and
cordiality of the German people.
The positive impact of the World
Cup on Germany will be felt for a
long time to come.
Both bilaterally and within the
growing European Community,
Germany is and will be a reliable
partner of Hong Kong. Nearly 550
German companies in the field of
trade, transport, logistics and
finance are present here. Hong
Frank Burbach
Kong, “Asia’s World City”, retains
its role as the most important
“gateway to the Chinese market”.
This market astonished the world
with its impressive growth rate.
“The dynamism of China has
no rival” was the expression used
by the German Chancellor Angela
Merkel during her first official
visit to China in May this year.
Furthermore, Hong Kong
serves as a springboard for
German companies to do
business with Japan, Korea,
Southeast Asia, India and
Australia.
Germany is known for its
world-famous cars, but it was
mainly telecommunication and
information technology as well as
synthetic materials and
medicines which, according to
the Hong Kong Trade
Development Council, raised the
growth in bilateral trade by up to
78 per cent last year. Germany,
last year, asserted its position as
the seventh-biggest trade partner
of Hong Kong.
Germany is also an important
partner of Hong Kong in the field
of environment technology and
infrastructure. The exchange of
delegations in this field is rising,
allowing Hong Kong
representatives to gain advanced
knowledge of German
technology. For example, a
delegation from Hong Kong
visited the equestrian
competition in Aachen recently
in view of the Olympic Games
2008 equestrian events being
held in Hong Kong. The
Transport Department is also
planning a visit to venues of the
Fifa World Cup next month.
There are also excellent
cultural exchanges between Hong
Kong and Germany. Many firstclass German cultural events are
featured at the Hong Kong Arts
Festival each year.
The Goethe-Institute’s “Max!”
Film Festival of German films has
become a must on the Hong
Kong cultural calendar.
Respectively, Germans also show
a great interest in the life and
culture of this vibrant city.
Features on Hong Kong are
frequently shown on German
television and attract a huge
audience.
I would like to take this
opportunity to express once
again my gratitude to all our
partners in Hong Kong for their
co-operation and friendship and
extend my best wishes to them.
FRANK BURBACH
Consul-General of Germany in
Hong Kong
GERMAN UNITY DAY S3
SOUTH CHINA MORNING POST
TUESDAY, OCTOBER 3, 2006
Gateway to northern Europe
The nation’s largest port is, like Hong Kong, a major shipping centre for goods made on the mainland
Matthias Umlauf
Hamburg has a population of 1.8 million with a per-capita income of ¤46,000 (HK$454,236), making it Germany’s richest city. Photo: Rainer Kiedrowsk
centre covering the whole range of
trade and logistics-related services,
from extended and modern
warehouse facilities, inter-modal
transport and distribution
networks to a highly developed
service infrastructure including
specialised lawyers and
consultants, according to Gunnar
Uldall, Hamburg’s Minister of
Economy and Labour.
These services have a long
tradition in Hamburg, but these
professions have expanded greatly
in the past two decades. Germany
is the world’s largest exporter of
goods, or “Exportweltmeister”, a
title that over the past few decades
was held either by the US, Japan or
Germany. However, in recent years
China has quickly climbed up the
ranks and is now third after
Germany and the US.
Because the booming world
economy is being driven largely by
a rapidly growing China, the export
sector has become even more
important to Germany’s economy.
Ulrich Ellerbeck, member of the
board of HSH Nordbank, said
Germany was benefiting more than
other European countries from the
rise of China. German companies
had strong expertise in sectors
where Chinese demand would
increase rapidly in the coming
years: tailor-made industrial
machinery, health-care products,
information technology,
environmentally friendly and
energy-saving products and
technology. With the exception of
last year, when exports to China
were virtually flat, volumes rose at
strong double-digit rates, climbing
by 26 per cent year on year and
reaching ¤6.2 billion in the first half
of this year.
However, while Germany was
even able to post a slight surplus in
bilateral trade with China at the
end of the 90s, the bilateral trade
balance has moved towards
increasingly large surpluses for
China. This trend of moderately
unbalanced trade growth can be
observed in the container trade
statistics as well, as the number of
empty containers returning to
China has risen to 15 per cent.
While the first decade of
Chinese investments abroad was
dominated by the search for
natural resources, Chinese
Beatles made their mark with
a little help from Hamburg
Nick Walker
OR EARLY 1960s Hamburg
youth, jaded with the
austerity and honking jazz of
the early post-war years, the
opening of the city’s Star Club
heralded the electrifying arrival of
rock ’n roll in Germany. And the
group that opened the club on the
now legendary night of April 13,
1962, was none other than The
Beatles. Not a home-grown band,
but who could have wished for a
more illustrious opening act?
Even during their Hamburg
sojourn, The Beatles were a stellar
group. Indeed, just over a decade
later, John Lennon remarked: “We
were never a better band than
when we were in Hamburg.”
Located in the heart of the
Reeperbahn, a neon jungle of
bordellos, girlie bars, mariners’
taverns and tattoo parlours, the
Star Club contained a tiny stage
with a backdrop consisting of an
image of the Manhattan skyline on
a tatty curtain.
Cramped and smoky, it wasn’t
the most salubrious of venues, but
The Fab Four endured three stints
at the club that year, earning
modest house-band wages and
living at a nearby guesthouse.
This was not The Beatles’ first
visit to Hamburg. During the
preceding two years they had
played at The Indra and The
Kaiserkeller bars.
In early 1961, The Beatles
played at the Top Ten Club for
three months. During this time
they were recruited by fellow
Briton Tony Sheridan to be his
session players.
The recording was produced by
studio legend Bert Kaempfert (who
later become known as the man
who arranged Strangers In The
Night for Frank Sinatra) and the
result, the cheesy Mein Herz Ist Bei
Dir Nur, was credited to Tony
Sheridan and “The Beat Brothers”.
It entered the German Top 50 –
and so it happened that The
Beatles hit the charts for the first
time, albeit under another name
and on the back of a lesser
performer. But they soon made
amends and before long were
household heroes.
F
Robin Lynam
N GERMANY MOST of it takes
place in September, and in
Hong Kong it continues into
November, but whatever the
actual dates on which
Oktoberfest is observed, it is
unquestionably one of the biggest
and heartiest parties of the year.
By tradition, the festival in
Munich – where it was first
observed in 1810 to mark the
marriage of Crown Prince Ludwig
of Bavaria to Princess Therese of
Saxe-Hildburghausen – lasts for
about 16 days, beginning on the
Saturday of the third weekend in
September, and continues until
German Unity Day on October 3,
or shortly thereafter.
It usually takes war, pestilence
or an equivalent disaster to
prevent this immensely popular
celebration being held. It has
been cancelled only 24 times
since 1810, for reasons ranging
from cholera to galloping
inflation.
It has, however, been held
without interruption since 1950.
The Munich event attracts
visitors from all over the world
but has preserved a uniquely
Bavarian character. It still takes
place in the Theresienwiese,
named for Princess Therese, and
is opened by the mayor of
Munich, who ceremonially taps a
keg of beer.
Beer plays a central role in the
celebration. The major Munich
breweries produce special
Oktoberfest beer for the festival
and it is estimated that 30 per
cent of their annual production is
consumed in the course of the
celebrations. Last year, 6 million
mugs of beer – which works out
at about one each per visitor –
were sold.
Some visitors, of course, do
not drink, while others go to it
with relish. The latter require
strong heads. Those are not just
any mugs. Part of the tradition of
the festival is that beer is sold in
one-litre, heavy glass receptacles,
each of which is called a “mass”.
That beer helps to wash down
almost equally spectacular
quantities of food. Last year,
459,279 roast chickens, 219,443
pairs of sausages and 88 roasted
oxen were consumed.
I
H
AMBURG, GERMANY’S
second-largest city after
the capital, Berlin, enjoys
the kind of relations with
China that mark it out as a dynamo
for future growth between the two
nations.
Reasons for this include
Hamburg’s world-famous port, its
position as a transport and
distribution hub between the Baltic
region and Asia, the city’s
eminence as a national media hub
and, last but not least, its ranking
as the world’s third-largest aircraft
manufacturing site.
Prime Minister Wen Jiabao’s
visit to the Hamburg summit last
month underlined Hamburg’s
position as a leading location for
Chinese companies in Germany
and Europe. While Hong Kong is
regarded as the gateway to
mainland China, Hamburg
performs a similar role with
regards to northern and
northeastern Europe.
Landing in Hamburg after flying
from Hong Kong or some other
large city in Asia, one’s first view of
Hamburg is startling – a green
oasis, only a few tall buildings, a
lake in the centre of the city.
Nevertheless, the Free and
Hanseatic City of Hamburg was
West Germany’s largest city before
re-unification in 1989. Today it has
a population of 1.8 million and
with per-capita income of ¤46,000
(HK$454,236), is also Germany’s
richest city.
Having never been a large-scale
manufacturing hub like the Ruhr
valley in the western part of
Germany, the city’s fortunes were
built on trade. The container port
of Hamburg, ranked a close second
in Europe after Rotterdam, is
thriving on booming trade with
China.
Every fourth container handled
is either coming from or going to
China. Of course, all these goods
are not for the German and
Hamburg market only. One third
of China-related container
turnover uses Hamburg as a
transport and logistics hub, going
further east to neighbouring
economies such as Poland, the
Scandinavian countries, the Baltic
States or western Russia. Hamburg
clearly benefited from the lifting of
the iron curtain in 1989, having
regained its traditional hinterland
in the east.
Today, Hamburg – like Hong
Kong – is a highly efficient logistics
Put on your drinking
cap – it’s Oktoberfest
Night by night the band’s raw
sound came together, despite the
technical limitations of bassist
Stuart Sutcliffe and drummer Pete
Best (who was replaced in 1962 by
another visiting Liverpudlian,
Ringo Starr). Over many months,
John Lennon, Paul McCartney and
the then-teenager George Harrison
played with a ferocity and
brilliance that would, a few
months later, become evident to
millions of record buyers.
Moreover, The Beatles were,
even at this early point, crafting
rebel music with a self-awareness
that sharply distinguished them
from war-generation parents and
“the authorities”. After all, this was
the ’60s.
(From left) John, George, Paul and
Ringo, soon after the end of their
Hamburg sojourn, sporting their
famous moptop hairstyles.
Los Angeles-based
ethnomusicologist and exmember of a Beatles cover band,
John Silverman, notes: “Hamburg
is where The Beatles learnt their
craft to a world-beating standard.
They felt very much at home in
this city, a port that has enjoyed a
vibrant arts scene since the days of
the Hanseatic League [of the 13th
Century]. And it was only after
Hamburg that this most prolific
and industrious of bands started
working with Teutonic efficiency!
Their two years in Germany were
truly formative.”
An intense romance between
Stuart Sutcliffe and local girl Astrid
Kirchherr gave the Hamburg
Beatles story a compelling subplot.
Stuart, an art student brought into
the band by Lennon, fell headlong
in love with the hauntingly
beautiful blond photographer,
and, as he entered Astrid’s
thrilling, provocative world of art
and existentialist radicalism, he
gradually lost interest in his night
job. It wasn’t long before Stuart
proposed to her.
A Beatles insider from their
early days, Astrid actually wielded
considerable influence over the
band, and remains to this day one
of the two surviving ex-Beatles’
best friends (and, some say,
conceived the “moptop” hairstyle
for them).
Tragically, Stuart and Astrid’s
relationship was short lived; who
knows how The Beatles story
would have unfolded had Sutcliffe
not died of a brain haemorrhage in
1962, aged 22.
Another enduring friendship
was formed during this time.
Hamburg artist Klaus Voorman
became close to The Beatles. In
fact, he was the person who
introduced Stuart to Astrid. Later,
he was responsible for the iconic
monochromatic cover of The
Beatles 1965 masterpiece Revolver,
and more recently the covers of
the Anthology compilations, which
brought the group to a new
audience in the mid 1990s.
Voorman was also an
accomplished bassist and played
on many of John Lennon’s most
famous solo recordings.
By the time The Beatles left
Hamburg at the end of 1962, their
first hit, Love Me Do, had already
crept up to No 17 in the British
charts.
The phenomenal Beatles story
had begun in earnest. Chapter
One: Liverpool, Chapter Two
Hamburg, Chapter Three: The
World.
There’s an intriguing coda to
this track. The only time The
Beatles ever recorded a song in
another language was the song
Komm, Gib Mir Deine Hand, also
recorded in English as I Want To
Hold Your Hand.
Unusually, Komm, Gib Mir
Deine Hand was recorded in a
Paris studio rather than their usual
Abbey Road studios in London.
But one can’t help imagining the
four ex-residents of Hamburg
enjoying a few north-German
recollections between takes.
companies today are increasingly
looking to new export markets. The
enlarged European Union, a
market with 450 million
consumers, is the biggest western
market, even overtaking the US.
Last year alone, Chinese
enterprises invested
US$278 million in the EU, of which
more than US$80 million went to
Germany.
According to Stefan Matz,
director of international business
at Hamburg Business
Development Corporation HWF,
Hamburg’s investment promotion
agency, Hamburg, whose relations
with China have been
strengthened by 20 years of
partnership with its twin city,
Shanghai, is the most important
site for Chinese companies in
Europe. As well as leading shipping
companies such as Cosco and
China Shipping, Chinese global
players in manufacturing
industries such as Baosteel Group
or Chinatex have set up their
European headquarters in
Hamburg. About 400 Chinese
companies are in Hamburg, a
number that is steadily increasing
as newcomers benefit from its
established network.
Hamburg’s potential for future
Chinese investment lies in the
transport, logistics and distribution
segments becoming, even more
than they are today, China’s
gateway to Europe – Eurogate. In
this regard, Hamburg’s function in
Europe is the same as the role
Hong Kong has for China – being
an excellent location to extend
business relations to the
hinterland.
The writer is a senior economist
with German bank HSH
Nordbank
Traditional Bavarian dishes
are eaten throughout the festival
and include brezen, the salty,
knotted bread from which the
American pretzel evolved;
kasespatzle, the local noodles
served with cheese and fried
onions; and sauerkraut, the
fermented cabbage which goes
particularly well with the local
wurst, or sausages.
But there is more to the
Oktoberfest than just food and
drink. The event celebrates
Bavaria’s traditional local dress
with a costume parade that
typically involves around 8,000
people. Traditional brass bands
perform, as do contemporary
rock groups. Other events include
a marksmanship competition for
crossbow-archers.
Revellers traditionally consume
huge quantities of beer, which
comes in one-litre glasses.
About 72 per cent of the
people who attend Munich’s
Oktoberfest come from Bavaria,
and a further 13 per cent or so
from elsewhere in Germany. The
rest come from overseas, but if
you cannot make it to the
Munich Oktoberfest, chances are
that an equivalent event will be
held somewhere near you.
In Asia, Oktoberfests are held
in both Singapore and Hong
Kong. Singapore’s Erdinger
Oktoberfest takes place this year
from October 12 to 15 at China
Square Central, while in Hong
Kong, the region’s largest
Oktoberfest celebration takes the
form of the Marco Polo German
Bierfest, an annual event since
1992.
This year’s event lasts from
October 29 to November 18 and
includes nightly performances by
The Notenhoblers, a German
band.
For details visit the Bierfest’s
website at www.gbfhk.com
S4 GERMAN UNITY DAY
TUESDAY, OCTOBER 3, 2006
Sponsored section in co-operation with Discovery Reports
SOUTH CHINA MORNING POST
Bayer brings renewed innovation focus to Asia
Reports by Pamela Sun, Rubelyn
Alcantara, Michèle Schmit
and Dawn Denecke
B
ayer may be more than 140
years old, but today the German chemicals and pharmaceuticals group is on the cutting edge of business more than ever.
That’s thanks to an undying commitment to innovation and a willingness to
revamp itself to serve prevailing market
needs – especially those coming from
Asia.
While Bayer’s organisational chart
may be new, its commitment to innovation is as old as the company itself.
Throughout its history, Bayer has distinguished itself with novel ideas across its
businesses. Among the most notable is
aspirin, a Bayer innovation that is still
one of the most widely used drugs on
earth. In the polymer business, Bayer
produces polyurethanes, as well as the
polycarbonates that go into DVDs and
CDs, automotive glazing and new digital printable films and agriculture.
Bayer has developed pesticides that
are less harmful to the environment. Today it is looking at green biotechnology
in which plants produce active substances for medicines. Bayer spent about
HK$19 billion on research and development last year, making it one of Germany’s top R&D spenders.
The company realised a few years
ago that it needed to restructure its cen-
Wolfgang Plischke
tralised organisation. In 2002 it created
distinct subgroups; Bayer HealthCare
for pharmaceuticals and medical products, Bayer MaterialScience for polymers and advanced materials, and Bayer
CropScience for agricultural products.
The group’s mission is to help prevent,
diagnose, alleviate and cure diseases, to
contribute to ensuring a sufficient supply
of high-quality food for an ever-increasing global population and contribute to
people’s quality of life through products
in the fields of communications, mobility, sports, home living and the environment.
The reorganisation has been accompanied by an expansion of Bayer HealthCare.
In the beginning of 2005, Bayer
bought Roche’s consumer health division, making Bayer one of the world’s
three largest suppliers of over-the-counter remedies.
Now Bayer is aiming to buy the remaining shares of Schering, its largest
acquisition ever. “We will create a significant pharma specialty company,”
said Wolfgang Plischke, Bayer’s board
member responsible for innovation,
technology and the environment and the
Asia-Pacific region. The merged entity
will concentrate on gynaecology, andrology, oncology, diagnostic imaging and
specialty drugs for haematology, cardiology and diseases like multiple sclerosis. Based on 2005 sales, Bayer Schering
Pharma is estimated to have an annual
turnover of more than HK$90 billion
and be among the world’s top 10 specialty pharmaceutical companies. In China,
Bayer Schering Pharma will be amongst
the top 5 international pharmaceutical
companies.
Bayer’s restructuring also included a
spin-off of its traditional chemicals business, leaving Bayer free to focus on
higher-growth areas where its inventiveness is put to best use. In fact, that strategy drove the whole corporate reorganisation. “We tremendously changed our
portfolio businesses,” said Dr. Plischke.
“We are suited now to compete even bet-
ter in the segments we are in because we
focus on the innovation-driven part of
the business.” The approach is paying
off so far, with Bayer achieving one of
the most successful years in its history in
2005.
As Bayer’s businesses have grown in
depth and scope, it has also expanded
geographically. Asia has risen in importance in the past 15 years. The company
has invested HK$32 billion in capital expenditures, acquisitions and R&D in the
Asia-Pacific region since 1990. In 2005,
Bayer’s 14,000 Asia employees generated sales of HK$46 billion – about 17 per
cent of the group’s total.
Bayer has been in China since 1882
but its operations there really gained
strength in the early 1990s, when it established a holding company and set up a
production facility in Beijing. Today,
Bayer has 19 companies, 10 plants and
almost 4,900 employees in China, which
is its fourth largest market.
To meet the needs of China’s rapidly
growing manufacturing and construction sectors, Bayer recently opened a
polymer factory in Shanghai Chemical
Industry Park which is part of a HK$14
billion investment. It is the company’s
largest investment outside Germany.
Bayer is hiring hundreds of people and
training them for work in the high-tech
chemical production facility.
Beyond that, Bayer is planning a
HK$202 million expansion of its pharmaceutical factory in Beijing and is look-
Radio pioneer aims to keep railway strategy on track
F
or the past century, TELEFUNKEN has been synonymous with
quality and leadership in technology. The company created the first wireless communication between North
America and Europe and the PAL system
for colour television. Today, TELEFUNKEN RACOMS continues to live up to
its innovative reputation, offering its military expertise to provide new applications for a hi-tech civilian market.
Two areas show strong promise for
the radio pioneer. Its TrainCom division
develops and installs data links between
train units and rail traffic control centres
for a range of railway applications, from
high speed trains to mass transit. The second is radio communication, based on
high-frequency military applications for
the homeland security market. Police,
fire and border control can reap the benefits of TELEFUNKEN’s solid technical
military
know-how.
TELEFUNKEN’s
TrainCom
technology
is used in the
Maglev train
in Shanghai,
which operates up to
430km/h. It Dieter Scharr
can also be
used by train operators for CCTV video
surveillance or to provide passengers
consistent internet and GSM mobile
phone access on high speed trains.
Consistent availability is essential as
transmission interruptions can cause a
train to stop. “We deliver a link for the
whole track,” said Markus Schütz, managing director of TELEFUNKEN RA-
COMS. “If
you use a
satellite you
cannot keep
running in
tunnels
where satellites do not
work.”
TELEFUNKEN’s
Markus Schütz
customers
gain high security, resistance to jamming disturbances and autonomy from dependence
on satellite providers. The core philosophy is to deliver complete turnkey systems, installed and tested, with integrated
software.
The firm plans to set up marketing,
final assembly, mechanical and electronic production in China. “We will pro-
ceed step by step – not with a big bang,”
said Dieter Scharr, managing director of
TELEFUNKEN RACOMS.
Last year, his company opened a representative office in Shanghai and engaged a consultant there to analyse the
Chinese train market. Joint ventures and
licensing relationships with local entities
will play a significant role, too.
“We will be testing our strategy on a
monthly basis to confirm we are on the
right track,” Mr Scharr said.
The Chinese train market alone is
estimated to be worth more than US$200
billion a year. Over the next three years,
TELEFUNKEN RACOMS hopes to stabilise its position in China.
“If we succeed, I foresee huge potential for trains and metros,” Mr Schütz
said. “TELEFUNKEN has an established
tradition. After having survived for 100
years you know it will continue on.”
ing to extend its crop protection business
in China. It expects China to become its
third largest market in coming years, edging out Japan.
Underpinning the growth strategy is
Bayer’s driving philosophy of providing
socially responsible solutions tailored for
individual countries. In China that means
polyurethane for home insulation that reduces energy consumption, and agricultural products like environmentally safe
crop protection agents and state-of-the-art
hybrid rice.
Bayer is also focused on China’s
growing diabetes problem. Some 40 million Chinese now suffer from the disease.
Diet changes accompanying the country’s
economic boom could push that number
up to 100 million by 2020. Bayer’s Glucobay is the number one oral diabetes medication in China, where it enjoys 35 per
cent market share. Moreover, Glucobay is
the number one prescription product
amongst all pharmaceutical products
available in China.
Another new medicine that holds serious promise for China is Nexavar. Bayer
expects the Chinese government to approve its use for treating kidney cancer by
the end of the year. Among other indications, Bayer is also researching the drug’s
potential impact on liver cancer. Considering that more than half of the world’s
liver cancer occurs in China, Nexavar
could prove to have widespread benefits
there in the future.
Bayer’s sense of social responsibility
extends beyond selling helpful products.
“Bayer as a company defines itself as a
good corporate citizen. For us business
activities go hand in hand with efforts to
improve the social conditions of people
in the countries in which we operate,”
said Dr. Plischke.
In China, for instance, the firm provides tools for diabetes therapy and information about proper diabetes care
through a program called Diabetes
House. Another Bayer initiative called
Agri-care teaches farmers how to apply
pesticides safely so that both the farmers
and the environment are protected.
Bayer also supports the rural development in China, through a microfinance
partnership with several organisations
through the international NGO Mercy
Corps, to fund a community development project in Fujian province.
The company’s social commitment
in China is particularly focused on the
active support of education and scientific research. “As an inventor company,
we consider support for education, research and science to be extremely important,” said Dr. Plischke.
A core element of this commitment
is research co-operations with different
universities throughout the country. At
the Tongji University in Shanghai,
Bayer has established a professorship
for sustainable development and initiated a course of study on this theme together with the university. “At Bayer, we
are committed to the principles of sus-
tainable development. We want to balance economy, ecology and social responsibility. That is why we particularly
support scientific research on this topic,”
said Dr. Plischke.
Another example for joined scientific exploration is a research co-operation
agreement signed in 2001 with China’s
leading research institution, the Chinese
Academy of Sciences. The aim of this
cooperation is to intensify academic exchange in research and development and
to improve mutual access to each other’s
excellent research facilities.
In public health Bayer has established together with the Tsinghua University in Beijing the “Tsinghua-Bayer
Public Health and HIV/AIDS Media
Studies Program”. It helps to raise public awareness of the disease and its dangers by training Chinese journalists to
cover the topic accurately and conscientiously.
Bayer sees all of this as part of its
long-term plan for China. When it invests somewhere it makes a commitment. “We go into a country and we stay
there,” said Dr. Plischke.
Bayer is Germany’s top chemical
and pharmaceutical company and a
major player worldwide. Together with
Schering it has more than 110,000 employees working at 434 subsidiaries
worldwide. But its ambitions stretch
even further. Bayer aims to be among
the top three global companies in every
sector it operates within.
Global leader in cutting
equipment sharpens its
focus on Greater China
I
n everyday life we will probably use
paper products cut by IKS Klingelnberg knives, from business cards to
newspapers and tissues.
The world market leader, which generates 43 per cent of sales from its paper
division, also makes high accuracy cutting equipment for the wood and metal
industries.
Through past acquisitions, the company is able to offer its customers a
broader product portfolio.
“We make their lives easier by providing the right solutions and cutting
profiles with the right materials,” said
Thomas Meyer, president and chief
executive of IKS Klingelnberg.
“We take away their headaches.”
IKS Klingelnberg knives cut all
wood varieties – soft, hard or mixed. A
recently developed high-speed knife for
slicing thin layers of veneer, as thin as
0.05mm, lasts three times longer than
that of its competitors, the company says.
Non-ferrous metals such as aluminium and copper require high precision
slitting. IKS Klingelnberg’s extensive
knowhow in metal cutting has allowed it
to work with Bao Steel and Tong Ling in
China.
Besides selling knives, IKS Klingelnberg also offers comprehensive cutting solutions with training and seminars. The company ensures a thorough
understanding of its applications and offers a readiness to share knowledge.
IKS Klingelnberg aims to double
sales in Asia over the next eight years,
where it is already concentrating on
Chief executive officer Thomas Meyer
large, global customers. Seventy-five
per cent of its products manufactured in
China are supplied for the local Chinese
market, with the rest for export. Global
players producing in China need tighter
tolerances and quality control, assured
by IKS Klingelnberg’s cutting solutions.
The company depends on its people
for worldwide standards of quality. It is
expanding its Shanghai office by seeking
out English-speaking engineers, technicians and sales staff. It motivates employees by encouraging flexible processes and responsibility, and offering generous profit sharing.
“Shanghai will become the Asian
hub as we strive for the leading position
in the market,” Mr Meyer said.
Mainland plants hold hope of
revolutionary energy solutions
W
ith China’s economy showing double-digit growth, it
comes as no surprise that in
Beijing alone more than 1,000 cars are
registered every day. To help the mainland meet its future energy needs, German company Lurgi is testing a revolutionary technology that will utilise
China’s natural resources to produce
alternative fuel.
The century-old firm has been at the
forefront of the construction of process
plants worldwide. More than 70 per cent
of southwestern Europe’s biodiesel production passes through Lurgi plants.
Aside from its technical expertise, Lurgi
can deliver technology at the lowest production cost.
In 1964, Lurgi built an ethylene plant
in China. The firm has since built more
than 150 plants in Greater China, mainly
factories to make petrochemical products and synthetic fuel. But with new
technology, the mainland has little need
for the latter.
“China is rich in coal and can use its
resources to make value-added products
from coal, and that’s where we come in,”
said Lurgi executive board chairman
Klaus Moll. “We introduced the methanol-to-propylene [MTP] technology to
the mainland.”
Lurgi provides the technology for
MTP and key components.
Aside from producing fuel using
Lurgi technology, the firm can also help
China produce textile and plastic products out of the country’s vast coal reserves.
Another recent Lurgi venture is a
biodiesel plant for China. The 15,000tonne demo facility, scheduled to be
operational in 2008, will use as feed-
Klauss Moll (left) and Stephan Reimelt
stock a Chinese plant called jatropha,
which grows abundantly and exclusively in the region.
Lurgi, which has an office in Beijing
with 35 employees, supplies the technology and services for building the plants.
“We are here to listen, adapt and execute these projects,” said executive
board member Stephan Reimelt. “We
enjoy the trust and confidence we get
from our Chinese clients.”
Over the next few years, Lurgi sees
China’s contribution to the company’s
annual turnover exceeding its present 25
per cent share. But more than the additional revenue, Lurgi views China as its
global biotechnology laboratory, where
it can perfect a solution for the world’s
energy requirements.
“China is giving us a glimpse of the
future global demand for fuel,” Mr Moll
said. “At its present rate, the world population will grow from 6 billion to 10 billion by 2025.”
GERMAN UNITY DAY S5
Sponsored Section in co-operation with Discovery Reports
SOUTH CHINA MORNING POST
TUESDAY, OCTOBER 3, 2006
LBBW helps German firms Pioneering engine maker
to open businesses in region revs up China operations
D
G
ermany’s third largest independent bank, Landesbank
Baden-Württemberg
(LBBW), is opening doors
for German companies to do business in
Asia by going beyond traditional services offered by universal banks. Aside
from financing, leasing, money market
placement, securities and foreign exchange trading, real estate brokerage and
equity investing, it runs German Centres.
The centres house an LBBW branch
office in Singapore and a representative
office in Beijing. The centre offers practical advice on how to start a business in
the region, office space and events management. In addition, it has a solid inhouse business infrastructure with law
firms, auditors and a central office support unit.
LBBW’s goal is to support German
companies establish a foothold in the
Asian market. LBBW helps German
companies by providing financing for
production facilities in the mainland,
looking for necessary documents and
facilitating financial transactions with
banks in Asia.
The funding of the very first German
Centre in Singapore in 1996 was part of
LBBW’s longsighted process for Asia.
The centres serve as a halfway house for
the bank’s clients with business in the region. The 18,000 square metre facility in
Singapore is the largest of all LBBW run
German Centres and is home to the
bank’s operative branch in Asia.
Currently, LBBW is present in China
with two representative offices in Shanghai and Beijing and another 7,500 square
metre German Centre in Beijing’s Chaoyang district. LBBW also has representative offices in Tokyo, Mumbai and Hanoi – each site important for its surrounding region.
Although LBBW constantly reviews
opportunities to further expand in China
and make available more services to its
clients in the future, as a banker, Dr.
Siegfried Jaschinski, chairman of the
board of managing directors of LBBW,
cautions German companies from losing
sight of their local and other global markets. “We advise them that even if China
is booming, it is not good to have all eggs
in one basket but to focus on different
markets,” said Dr. Jaschinski. “They
should invest in different markets with a
long term view. China is a growing market but they will need resources to afford
the market. Those entering should have a
eutz is that rarest of corporate
combinations: a company
steeped in history and experience but with the innovative heart of a hitech company.
The German engine maker has been
in business since 1864, and has been
operating in the mainland for 20 years.
Over the next decade, Deutz intends to
become a German-Chinese company.
“Everything done in Germany will be
done in China and the other way around.
It will be one interlinked company,” said
Deutz chairman Gordon Riske.
As the world’s oldest engine manufacturer with annual sales of about ¤1.3
billion (HK$12.9 billion), it has become
one of the leading independent suppliers
of diesel and gas diesel engines.
“We only focus on engines,” Mr Riske
said. “We don’t build trucks or other
equipment, so our customers don’t have
to worry about competing against us.”
The engines are found in all kinds of
applications: construction and agricultural machinery, compressors, commercial vehicles, power generating plants,
power units, materials handling equipment, and also in ships.
The company’s long history has
earned it a reputation for reliability and an
extensive list of well-known references.
Throughout China, Deutz gas engines
can be found in biogas projects in Shenyang, in projects with sewage and landfill
gas in Beijing and Shijiazhung, and in
power plants operating with mines gas in
Huainan in Anhui province.
Gordon Riske and Andrea Bleesen
Engines using natural gas can be
found in power plants in the central province of Qinghai and in a SINOPAC offshore platform in Bohai Bay oil field.
Innovation has always been a priority
for Deutz, which spends above the industry average – 5 per cent to 7 per cent of
turnover – on research and development.
Though highly successful in construction equipment engines, it is increasing activity on its on-highway engine
division. Its latest truck engine, known
as the TCD Turbo Charged Diesel
Engine 2013, was developed in partnership with Volvo to meet future emission
standards.
Deutz’s innovation is matched by
company quality. With a global staff
turnover of less than 2 per cent, the com-
pany’s employee dedication and stability
provides peace of mind for clients.
Deutz’s chief executive in China has
been with the company for more than 10
years.
These qualities are appreciated in
China, which is one of Deutz’s most important growing markets for the future.
The company has its own sales and
service offices in most coastal cities, and
it plans to extend its existing joint venture
activities for diesel engines and open a
subsidiary for its gas engines activities in
the near future.
Its goal is to double its China sales
within the next four years, both through
the expansion of its joint venture and the
addition of more joint venture production
facilities.
Chief executive officer Siegfried Jaschinski
long-term view and good resources.”
LBBW was born out of a merger in
1999 of Südwestdeutsche Landesbank,
Landesgirokasse, and the commercial
banking business of Landeskreditbank
Baden-Württemberg. With its acquisition last year of Baden Württembergische Bank and 100 per cent takeover of
Landesbank Rheinland-Pfalz, LBBW
now has 12,500 employees globally, a
balance sheet total of more than 400 billion Euro and a pre-tax profit of one billion Euro. It is also the central bank of the
savings banks in Baden-Württemberg.
In the state capital of Stuttgart it acts as a
savings bank through BW-Bank, with a
70 per cent market penetration rate.
As a state bank, LBBW is approximately 35.6 per cent owned by the savings banks of Baden-Württemberg, nearly 5 per cent by the savings banks of
Rhineland-Palatinate and the Landeskre-
ditbank Baden-Württemberg, 35.6 per
cent by the state of Baden-Württemberg
and 19 per cent by the city of Stuttgart.
While a state bank’s efficiency is often
questioned, LBBW’s asset base and return on equity over the past six years
compared to other commercial banks is
the best counterargument.
A key to its success is the full service
it offers to its clients. Whether it’s leasing, credit or factoring, LBBW has it.
“We try to keep as many clients as possible with the most products possible.
We could deliver everything that a corporate client wants,” said Dr. Jaschinski.
Long-term commitment to its clients
is vital to LBBW, too. The mergers that
form today’s LBBW brought with them
tens of years of ‘Hausbank relations’
with corporations that had business with
the Groups’ former financial institutions.
The bank invests in private companies,
owning minority shares. This way it supports and protects the firms, mostly family businesses, especially from shortterm profit orientated financial investors.
LBBW has investments in some 70
companies in the state.
Caution and a steady commitment to
its clients are among the leadership qualities that Dr. Jaschinski brings to LBBW.
One of his long-standing policies is that
the staff in LBBW branches should preferably be employed at the branches long
term since an abrupt change in the employment structure may prevent bank
employees from knowing their clients.
“Banking is a question of culture,
well thought change of culture, of steady
growth and not too many strategic
changes. LBBW’s history shows that
success is here and you could use this
banking strategy over the years,” said Dr.
Jaschinski.
Crushing success for coal equipment pioneer
A
s China’s economic boom progresses, the country’s consumption of coal is sky-rocketing.
About 67 per cent of China’s electrical
power comes from coal, creating an explosion of demand for coal crushing
equipment made by AUBEMA, an industry pioneer on the mainland.
The German manufacturer got into
China before any of its competitors in
2000, and found instant success. Within
the first six months of operations, it
racked up ¤2 million (HK$19.9 million)
in sales. Business has been so good it
opened a subsidiary last year called Beijing AUBEMA Crushing Technology.
The company’s success is partly due
to its quality. Although its equipment
costs more than cheap imitations, its per-
about 70 per cent of the comformance is exponentially
higher.
pany’s business, it also makes
machines for crushing limeThe company sells machines and a whole process.
stone and fertiliser.
This involves understanding
AUBEMA’s mission is to
provide for the fundamentals
the type of coal being used and
custom-designing machines
of life: food from fertiliser,
from standardised modules to
housing from limestone and
suit customers’ needs. Service
energy from coal. This stratealso sets the company apart.
gy has helped it triple turnover
Norbert Britz
Managing director Norbert
in the first five years of the
Britz has an unusual appreciation of his decade and is helping meet the demands
customers.
of China’s growing population.
China now accounts for about 40 per
“If a customer has a problem, we
never argue,” he said. “In this business, cent of the company’s turnover.
people usually start arguing about cost
Mr Britz said: “I see a booming
before anything else. But we first go China for the next 20 or 30 years, espethere and fix it and then talk costs.”
cially for our business. Energy is needed
Although coal equipment makes up and we can help them save energy.”
S6 GERMAN UNITY DAY
TUESDAY, OCTOBER 3, 2006
Sponsored Section in co-operation with Discovery Reports
SOUTH CHINA MORNING POST
Business booms for Beurer
as region embraces a more
health-conscious lifestyle
L
Lexzau Scharbau’s member of the managing board Oliver Oestreich (left) and chairman Jörg Conrad.
Freight forwarder
always willing to
go the extra mile
L
exzau Scharbau (Leschaco)
was founded in 1879, but its
current owner, Jörg Conrad,
still benefits from the extensive experience of its founders.
He lives by the motto “Progress is
born of experience”. With customer relationships dating to the 1920s, the firm
blends tradition with innovative technology.
Sea and air freight are its main businesses, making Leschaco the primary
German freight forwarder for sea
freight in the chemical industry. The
firm serves a growing automotive segment, along with textile and machinery
users. It runs trucking, chartering, insurance, warehousing and container operations.
The 1,200 employees of the familyowned concern are spread across 16
countries. “As a medium-sized company, we provide a worldwide network,
wherever our customers are,” said Mr
Conrad, who is also chairman of Leschaco.
Despite its size, this fully owned
company has surpassed its larger rivals
in its customer orientation. Always
ready to go the extra mile, it differentiates itself through better logistics and
error-free processing. Chemical, automotive, tank container and other customers benefit from Leschaco’s knowledge and efficiency as they compete in
global industries themselves.
The firm’s pre-eminence in logistics
relies on its IT capabilities. It offers
tools such as tracking and tracing, and
links an integrated ERP system, using
paperless shipping instructions for a
transparent process.
The freight forwarder combines
technology and thorough industry
know-how. Dangerous cargo requires
special handling to prevent accidents.
“Whoever we are working for must
feel comfortable that we know how to
handle their cargo and understand the
specifics of their market,” said Oliver
Oestreich, a member of the managing
board of Leschaco.
In 1991, Leschaco opened an office
in Singapore, where most of the chem-
ical industry is headquartered. It then
opened branches in Japan in 1995, and
in Indonesia, Korea, Malaysia and
Thailand in 1999, which also accommodate automotive and machinery customers. The Hong Kong office was
opened in 2001.
Most recently it set up a representative office in Shanghai in March, with a
staff of six for customer service and
sales. Meanwhile, it is expanding co-ordinators in its local agent offices.
The Shanghai office will support the
global network, particularly as exports
from Asia increase. Leschaco will continue to invest in China and India, which
represent its most promising future
markets. The growth in Chinese trade
has prompted the company to open
offices in Manzanillo, Mexico and soon
in Los Angeles, to handle trans-Pacific
business.
“China will contribute significantly
to the wealth of our network,” Mr Oestreich said. “We want to be the sole
source provider in the chemical segment there.”
policy to ensure that its
ong before the health
products – manufactured in
and wellness boom beChina and Hungary – are
came a global trend,
worthy of its ISO 9001 certi87-year-old German company
fication and meet the strict
Beurer had pioneered the
European medical stanmanufacturing of electric undards.
derblankets and heat pads to
Quality control is among
provide warmth to the Eurothe tasks of its daughter
pean market.
company in Hong Kong,
Living up to its reputation
Beurer Far East. The second
as a trendsetter in providing
round of inspections is done
premium quality products for
in Germany.
health and well-being, the
Beurer expects its reveUlm-based firm was one of the
nue to double in the next
first German companies to do
three years due to an ageing
business in China. The familyand more health-conscious
run business stepped into Beurer managing directors Marco Bühler (left) and
population. Fifteen per cent
China to diversify its medically Georg Walkenbach see revenue doubling in three years.
of sales will come from
developed product range. Today, it offers everything from diagnostic award-winning new products account for Asia, and a sales office will be established
in Shenzhen by the end of the year.
scales, blood pressure monitors and heart 30 per cent of Beurer’s annual turnover.
Focusing heavily on design, 10 per
“We want to give people a better,
rate monitors to massagers and pedicure
cent of the annual revenue is allocated to- healthier life and that is why we aim to be
sets.
“We constantly aim to invent some- wards research and development. Beurer number one in providing premium health
thing that hasn’t been on the market be- believes that a product should not only be and well-being products world wide,”
fore,” said Marco Bühler, co-owner and useful and reliable, but also good looking. said Georg Walkenbach, Beurer’s manmanaging director of Beurer. These The company has a double inspection aging director.
Schmid converts sunlight to energy
U
sing energy more efficiently is a
global concern, and China is trying to meet the challenge
through photovoltaics (PV), a technology
which converts sunlight into electrical
energy.
PV is used to interconnect solar cells,
which consist of silicon, to form solar
modules.
Schmid, a family-owned firm since
1864, makes turnkey PV equipment, from
wafer manufacture though production of
solar cells, to assembly of modules.
The company also produces equipment for the production of printed circuit
boards and flat panel displays, which it
exports worldwide.
Manufacturers Multek, Meadville
Group and Unimicron, turn to Schmid for
PCB processes such as etching and plating lines. For PV components, customers
require complete factories or single solutions.
“We are competitive on price performance,” said Christian Schmid, the fifth-
Chief executive officer Christian Schmid
generation chief executive and managing
director.
“Customers save money during production, because of better yield and higher quality.”
Schmid supports customers with
aftersales service, teaching them to
optimise the machines, providing spare
parts and working closely with engineers
on modifications.
While innovative German engineer-
ing sets the firm apart as the technology
market leader, similar processes in the
German and mainland factories ensure
identical quality standards.
The company has operated in China
for eight years. Benefiting from wage
flexibility, it employs half its workforce
in facilities in Shenzhen, Dongguan and
Kunshan, with a new one coming online
in Zuhai.
The firm is also collaborating with
Chinese, German and Korean universities on photovoltaic research. With Asia
accounting for 80 per cent of sales, highend opportunities in China appear particularly promising.
The clean energy sector there will be a
major focus, as the firm continues to add
capacity, increase solar efficiency and reduce production costs.
“We have the most modern PV manufacturing concept and equipment available,” Mr Schmid said.
“Our unique technology will be a big
step in China.”
Atlantic Zeiser
makes its mark
by protecting
product brands
F
ifty years
ago, Atlantic
Zeiser began
with a vision to
create an identity
for many different
products.
The
company manufactures numbering boxes and
numbering equipment used for in- Klaus Oesch
dividually numbering bank notes, cheques and tax labels.
The serial numbers on yuan and euro
notes are some of its notable products circulating around the world.
Many applications have been developed over the years, including passport
machines now used by about 30 nations to
individualise passports with numbers and
the latest biometric security features using
radio frequency identification (RFID) technology.
Atlantic Zeiser controls a dominating
market share for bank notes. Riding high
on the booming Chinese market, it hopes
to introduce another innovative application that will provide brand protection for
consumer products such as clothing and
pharmaceuticals.
“There is vast potential in the area of
product individualisation, which is a prerequisite for brand protection. Our goal is
to boost brand protection in China, where
a lot of counterfeit goods are produced,”
said Klaus Oesch, chief executive of Atlantic Zeiser.
Atlantic Zeiser provides many solutions. One process involves placing an individual visible mark combined with or
without an invisible mark on products. As
the item moves from factory to distribution outlets, its ingress and egress is recorded in a database. At a retail shop, a
special pen reads the mark to determine
whether the item is genuine and whether
the individual mark corresponds to the database.
The key to Atlantic Zeiser’s success is
the importance it places on research and
development. Fifty engineers work on customised and new products in its R&D facilities in Germany.
Atlantic Zeiser is also known as a supplier of plastic card personalisation equipment for high-performance applications.
It develops new machines for smaller scale
card personalisation and new technical
features, such as the “Drop on Demand”
full colour printing system.
Messe Frankfurt brings
trade fair flair to Asia
B
ringing together supply and demand may seem simple, but
Messe Frankfurt has found a way
to turn this matchmaking skill into an art.
“It is more difficult than it sounds because you have to bring the right products
together with the right buyers,” chairman
Michael von Zitzewitz said.
The right combination of buyers and
sellers and its solid infrastructure and location in the heart of Europe have made
Messe Frankfurt one of Europe’s leading
exhibition centres.
Messe Frankfurt organises fairs globally, with a growing focus on Asia. It
hosts more than 35 major fairs throughout
Asia, 22 of which are in Greater China including Shanghai, Hong Kong, Beijing,
Dalian, Guangzhou and Shenzhen.
Asia makes up 60 per cent of exhibitors in Frankfurt and 45 per cent of visitors to its fairs outside Germany.
Chinese exhibitors outnumber all
other groups of foreign exhibitors at its
fairs.
“Messe Frankfurt is one of the biggest
organisers of exhibitions on the mainland.
Company chairman Michael von
Zitzewitz
We plan to increase the number of locations in China. We are launching two new
shows in 2006,” Mr von Zitzewitz said.
Messe Frankfurt’s growth in China
can be attributed to the long-term relationships it has developed with key players in
the Chinese exhibition industry.
“Our demonstrated commitment to
Greater China helps ensure our long-term
relations with our Chinese partners and
clients. We have more than 120 staff in the
region and 99 per cent of them are local,”
Mr von Zitzewitz said.
Messe Frankfurt formed the first
Sino-German joint venture exhibition
company in South China last year –
Guangzhou Guangya Messe Frankfurt.
“It was our first real investment in
China and the experience has been wonderful,” Mr von Zitzewitz said.
Awareness of changes in customer
needs and demands is also key to its success.
“In this changing environment we are
constantly looking at new events that are
required by the market,” he said.
Messe Frankfurt is the world’s thirdlargest exhibition complex, with 16 subsidiaries, five branch offices and 50 foreign representative offices, including
Hong Kong, Taipei, Shanghai, Beijing
and Guangzhou. It co-ordinated 117
shows around the world last year.
Every year, about 60,000 exhibitors
and more than 3.4 million visitors worldwide attend Messe Frankfurt’s events,
which focus on the consumer goods, textile, automotive and building technology
sectors. www.messefrankfurt.com.hk
Birkart Globistics expands
movement of cargo worldwide
B
irkart Globistics began building
its Asian network in 1972, starting with a branch in Hong Kong
that provided logistics services for textile
companies. It soon entered other Asian
countries and new industries, such as the
automotive and electronics sectors in
South Korea.
Birkart Globistics, a business segment of Thiel Logistik, has 1,400 employees and a growing global network of
82 offices.
The company creates tailor-made logistics solutions for customers in industrial, automotive, fashion and lifestyle
businesses.
It integrates standard software and
handling procedures around the world.
“We want to provide the same quality
globally,” said Volker Hoebelt, managing director for marketing and sales at
Birkart Globistics.
Goods move constantly between
China and Europe, as well as the mainland and North and South America or
Africa in a triangular flow, while the
trading party is elsewhere, like Singapore or Taipei.
Managing director Volker Hoebelt
“It is a two-way street,” said Mr Hoebelt, adding that Birkart Globistics
linked the markets more seamlessly than
an agent network could through its own
network of branch offices.
The company also transports large
quantities of cargo within Asia, relying
on its branch offices in the mainland, Indonesia, South Korea, Malaysia, Singa-
pore, Vietnam, Taiwan, Thailand, the
Philippines and Australia. It plans to develop business in other countries in the
region.
Loyal, local employees are the key.
Next year, the company will open a regional centre in Shanghai for training its
staff and managers. It is also seeking a
joint venture partner to strengthen its local knowledge for intra-mainland logistics.
The company’s 18 offices in the
mainland have an A-class licence for
freight forwarding, including a warehouse near Shanghai, with another Aclass licence for logistics, trading and
currency transfer services for foreign
companies. Skilled Chinese workers
perform value-added services, such as
“Pick and Pack” for labels.
Along with its new products, the 129year old company maintains its traditions of flexibility and customer orientation. It emphasises rapid decision making and adaptation to customers’ needs.
“We listen to customers and together
with them, we find solutions,” Mr Hoebelt said.
GERMAN UNITY DAY S7
TUESDAY, OCTOBER 3, 2006
Sponsored Section in co-operation with Discovery Reports
Heraeus builds on its
China strengths and
draws up a wish list
H
eraeus may not be a household word, but the German
company’s technologies
touch the lives of millions of
people in many ways.
Heraeus Holding is a private group of
companies with businesses in precious
metals, dental health, sensors, quartz
glass and specialty lighting sources. The
common thread for all of them is knowhow in complex materials technology.
Heraeus was founded in 1851 in Hanau, Germany, by Wilhelm Carl Heraeus. He quickly established the firm as
an innovator by pioneering the melting
of platinum. Later, the company also became the first to melt quartz glass. As
these and other materials found new applications in widely divergent industries,
Heraeus expanded to serve them.
Heraeus products are found in everything from ball-point pens and bone
china pigments to pacemakers and cars.
The company’s platinum products alone
are used in 50 different industries. The
broad portfolio makes Heraeus relatively
independent of fluctuations in individual
sectors.
“Our strategy is to be very, very diverse,” said Helmut Eschwey, chief
executive of Heraeus Holding. “But our
core competence is still processing hitech materials for whatever applications
arise.”
Today the company is a global player, with more than 10,600 employees and
operations on five continents. Some
30 per cent of Heraeus’ sales come from
Asia, where it has a long and successful
history. Heraeus entered Hong Kong in
1974 and the mainland in the 1980s, long
before it was fashionable to do so.
“The Heraeus family has a very longterm strategy,” Dr Eschwey said. “A key
to our success was that we started early
and were patient and persistent. We built
our China house brick by brick.”
Dr Helmut Eschwey
Heraeus has 12 business entities and
1,800 employees in China, and is looking
to hire 300 to 400 more following a sales
increase of 26 per cent last year.
But Heraeus’ China strategy differs
from that of many western companies.
Rather than seeking to exploit low-cost
labour, Heraeus is in China to be closer
to the Chinese market. “Globalisation
cannot be a kind of colonisation where
we exploit developing countries,” Dr
Eschwey said. “It has to be a holistic approach where we say in each country to
make a contribution to the welfare of society.”
That philosophy carries over into Heraeus research and development practises. The company’s 25 R&D centres
include new facilities in China. Dr Eschwey’s advice for other companies entering the mainland market: “Don’t make
the mistake of bringing only second-
class and outdated technology because of
intellectual property concerns. You have
to bring your leading technology.”
Dr Eschwey has four goals for Heraeus in China in the next five years: to
double sales and profits; to be a good corporate citizen and an attractive employer; to remain competitive as Chinese
wages rise; and to meld the company’s
predominantly European culture with
Asian ideas for a global culture.
“A lot of what I do is hiring people
who can really work in a global network,” he said. “They need to understand
technology or marketing or finance, and
they need to understand culture as well.”
Dr Eschwey has a wish list for the
Chinese government. One wish is for
greater transparency in the privatisation
of joint ventures involving state enterprises, so that foreign partners have a better idea of who is buying shares. Another
is for faster approval of environmental
permits.
A third is an emphasis on productivity growth so that as China’s labour costs
increase, the country does not price itself
out of competition.
Most importantly, Dr Eschwey
would like to see the liberalisation of precious metals trading. Currently, gold can
be traded only on the Shanghai Gold Exchange and a Chinese bank must be used
for the deal. Other precious metals, including silver and palladium, cannot be
traded at all.
“China is a huge producer of gold,”
he said. “It would be beneficial for the
Chinese economy as well if the market
were opened up.”
The mainland figures big in Heraeus’
vision for the future. “China is the engine
for global growth and its health is crucial
for the world economy and our business
as well,” Dr Eschwey said. “I always say
three new jobs in China secure one job in
Germany.”
Chinese shipyards
choice of Rickmers
T
Wilhelm Schubert
LGA helps
mainland
meet global
standards
T
he “Made in China” label is often
equated with cheap goods. LGA,
a German firm, is helping the
mainland attain higher levels of production quality by providing tests and certification for all kinds of consumer products.
Its parent company, the LGA Group,
was founded in 1869 by two prominent
industrialists who left a legacy of quality
craftsmanship, which LGA continues to
pursue through the services it offers.
With new products constantly coming out of factories worldwide, LGA has
its hands full testing the safety and quality of new products and coming up with
benchmarks. An example is a whirlpool,
which LGA initially found to have some
hygiene problems. Upon its recommendation, the manufacturer introduced innovations to improve the product.
Globalisation led the firm to expand
its market. “Thirty years ago our clients
were manufacturers here in the region
within 300km of Nuremberg. This has
totally changed,” said Wilhelm Schubert,
general manager of LGA QualiTest.
In 1994, LGA began testing products
in Hong Kong made by European clients
with manufacturing plants in the east, including furniture and do-it-yourself kits.
Today, the share of Chinese manufacturers has grown to 75 per cent of LGA’s
turnover. To meet their requirements,
LGA QualiTest has founded 20 different
laboratories, where it employs almost
350 technical experts.
Early next year, LGA plans to establish a wholly owned firm in China. “The
European Union has very high standards
for consumer products like electric and
electronic goods, clothes, and watches. If
you are not a specialist, you are not
aware of the requirements the European
Community asks for. Only some manufacturers in China have knowledge of
these requirements,” Dr Schubert said.
The planned unit will provide tests
and certification and advise Chinese
producers how to meet European standards, especially in electric and mechanical items, but also in the chemical
and biological contents of consumer
goods.
manent. With our
he Rickmers
deep ties we will
Group continsurely stay there for a
ues the Eurovery long time,” Mr
pean tradition of sailSteffens said.
ing the seven seas. Its
The Hamburgfleet of more than 78
based group has bevessels with a cargo
come a leading supplicapacity of more than
er in global shipping,
2 million tons sails 24
by focusing on ownerhours a day manned by
ship and management
a crew of 1,600.
of vessels, providing
Rickmers’ ties
breakbulk and project
with China began in
liner services in four
1896. “We had the first
continents, and offerliner service connecting a wide range of
ing Europe with
marine services inChina. From the becluding surveying,
ginning, our history Jan Boje Steffens
shipyard inspection
was linked with
China,” said Jan Boje Steffens, manag- and crewing, and investment.
Today, most of Rickmers-Linie’s
ing partner and chief executive.
A long trading relationship with multipurpose vessels are built in China
China allowed Rickmers to identify cus- and used to transport breakbulk, heavytomer needs and provide services not tra- lift and project cargo with minimal damditionally offered by competitors. Break- age risk and broken stowage.
Aside from the regular liner service,
bulk sailing schedules finally became
reliable when Rickmers-Linie’s fleet Rickmers Group has a thriving shipownstarted to sail fortnightly from Europe to ing and management business where
most of its ship orders are placed and
Southeast Asia and the Far East.
The company also offers sailings built in Chinese shipyards.
Rickmers has representative offices
from Europe to the Middle East and India, and from the United States to South in Singapore, Hong Kong, Beijing, Dalian, Shanghai, Xingang, and Qingdao.
Korea and China.
“China is Rickmers’ home away Rickmers has dedicated itself to China as
from home. Some of our staff have lived a core market and is well prepared to
there for a long time, and some are per- broaden its activities there.
Komrowski is always
floating new projects
T
come back,” said Ernst
he Komrowski
Peter Komrowski, the
Group has chanfirm’s chairman and
nelled skills and
chief executive.
knowledge gained over
Satisfied Komrowski
nine decades from difclients can be found in
ferent businesses into a
Asia, principally in Indogroup of enterprises that
nesia and China, where it
focus on providing soluhas been doing business
tions to problems enfor more than 50 years.
countered by companies
The company’s latest
worldwide.
business deal in China is
Back in 1912, 23an order for six new conyear-old Ernst Komrowtainer vessels from two
ski entered the iron and
Chinese shipyards.
steel trade by founding
Komrowski
has
his own company with a Ernst Peter Komrowski
offices in Beijing, Shangpartner.
After 11 years he ventured into ship- hai, Chengdu, Guangzhou and Hong
ping and ship owning, specialising in the Kong. It also has offices and owns comtransportation of long steel bars from the panies in Japan, South Korea, Vietnam
mills to end users. The German firm has and Indonesia.
Besides its representative bureau in
expanded over the decades in various
areas of trading, engineering and ship- Beijing, it will soon open a wholly owned
ping, and its operations span Africa, Asia subsidiary in the Chinese capital.
As the company approaches a centuand Europe.
As a family-owned company, the ry of operations, Mr Komrowski advises
Komrowski Group has the flexibility to the fourth generation to continue to inwork closely with clients. It finds solu- novate in order to provide business solutions to customer demands in planning, tions for clients.
“Our young staff must see to it that
engineering logistics, financing and
we are a step ahead of the competition,”
after-sales service.
“We want happy clients who will Mr Komrowski said.
S8 GERMAN UNITY DAY
TUESDAY, OCTOBER 3, 2006
Sponsored Section in co-operation with Discovery Reports
Thinking globally, acting locally: NORD/LB Norddeutsche chairman Hannes Rehm (left) and general manager of the
Shanghai branch Stephan Popp
NORD/LB plans
one-stop banking
in the mainland
N
ext year could be one of the
more interesting years in the
240-year history of NORD/
LB Norddeutsche Landesbank, particularly in Asia. The German
bank has big plans for expanding in
China.
“Asia is the area for the future for
NORD/LB and the German economy,
especially China,” said Hannes Rehm,
chairman of NORD/LB.
The leading universal bank in northern Germany and one of the largest in Europe, it acts as the central bank for 80 savings institutions in the German states of
Lower Saxony, Saxony-Anhalt and
Mecklenburg-Western Pomerania. The
savings banks own half of NORD/LB
and the rest is held by the state governments of Lower Saxony and Saxony-Anhalt.
As one of Germany’s top banks for
national and international bond issues,
NORD/LB offers a wide range of financial services to private, corporate and institutional clients, as well as the public
sector.
For more than two decades, it has specialised in state and corporate financing
of transportation-related projects, including shipping, aircraft, port infrastructure
and logistics.
NORD/LB has, for example, expertise in creating public-private partnerships for infrastructure projects, which it
honed through extensive involvement
with British privatisation activities.
The bank follows a “think global, act
local” policy. It has offices in all the
major financial trading centres, including
London, Singapore, Shanghai and New
York. A network of more than 1,500 correspondent banks provides representation and service in other locations worldwide.
In a sign of its continuing support of
international customers, NORD/LB last
year formed a joint venture with Norwegian financial group DnB NOR. The new
entity, Bank DnB NORD, has its headquarters in Denmark and is active in Finland, Estonia, Latvia, Lithuania and Poland. The plan is to grow throughout the
Baltic Sea region and offer financing for
the area’s energy businesses, in addition
to the transport sector.
In Asia, NORD/LB’s Singapore
office serves as a regional hub for corporate and structured finance, including
trade, export, and project finance. The
office opened in 1994 and has made its
mark helping finance transportation infrastructure, especially in Malaysia and
Australia. It also counts heavyweights
such as Singapore Airlines and P&O
among its clients.
Singapore was the first step in
NORD/LB’s long-term Asia strategy.
Since setting up in the island nation, the
bank has been looking north to China,
where it is following a step-by-step process to eventually become a top banking
player there. In 1999, NORD/LB opened
a representative office in Beijing and in
2004 added a branch office in Shanghai.
All but one of the 15 employees there are
Chinese.
Among the functions of the Shanghai
branch is to serve as a business conduit
for NORD/LB customers and the German savings bank’s clients operating in
China. And vice versa.
“You have German companies who
are very well taken care of by the savings
banks in Germany, but suddenly they run
into problems in China,” said Stephan
Popp, general manager, NORD/LB
Shanghai branch.
“But we also have Chinese customers
who find that there are hardly any banks
in Germany willing to take China risk.
That’s where NORD/LB comes in. We
are not only looking at the German side
but also at the Chinese side.”
Next year, NORD/LB will be able to
do even more for both sides. It is planning
to apply for a licence to conduct yuan
business, a move it feels confident will be
successful.
At the same time, the representative
office of the State of Lower Saxony will
be closely attached to the NORD/LB
Shanghai branch. This means the bank
will be able to act as a one-stop shop for
Chinese companies wanting to do business in Lower Saxony and German companies operating in China.
NORD/LB aims to be one of the
strongest German banks in China one
day. This means being near to and preferred by clients, but not necessarily
being the first to always come out with
new products.
“Setting a precedent in China is an
awkward task,” Mr Rehm said. “It comes
down to the relationship between confidence and reliability.
“If you are always first, your product
comes out and the cost of a regulation
forces you to cut back and break a promise to a customer, and then you are out.
You can’t be reliable if you are the first in
every new development.”
Vehicle parts maker
continues tradition
of independence
G
Ulrich Wiedemuth
one are the days when car
manufacturers made their own
car parts such as brake systems,
steering and suspension parts and timing
components. In today’s global market,
80 per cent of car parts are
manufactured by independent
companies.
Febi Bilstein is a seventh generation,
family-owned independent company in
the automotive aftermarket industry.
Historically a supplier of parts for
German cars, it has extended its range to
serve makers of other European cars,
and more recently, Korean and Japanese
vehicles.
The company trebled its turnover in
the past 12 years, and is committed to
preserving the independent aftermarket,
from distributor to workshop.
“We consider ourselves consumer
protectors,” said Ulrich Wiedemuth,
general sales manager, automotive
division at Febi Bilstein. “If no
independent workshop existed,
monopolist manufacturers would dictate
the price.”
His firm, traditionally a hidden
champion, is emerging to educate the
market and raise awareness of the
quality that exists beyond original
equipment manufacturers. The trusted
German Febi brand stands for trendsetting, quality and speed.
“Quality” goes beyond the
manufacture of parts to covering cooperation in processes and logistics;
“speed” includes serving customers
promptly and efficiently, having an
extensive range of parts always
available and constantly updating
product information; “trend-setting”
means working closely with customers
to meet their present and future needs.
After operating for 30 years in Hong
Kong, Febi opened an office in
Shanghai six years ago.
The company seeks wider brand
recognition in China by bringing more
European car parts into the market. It
hopes to enhance the reputation of local
manufacturers by offering to put its
quality stamp on their car components.
Febi Bilstein is confident that its
guarantee of quality control and safety is
worth the cost to China and the other
130 countries where it distributes its
products.
“We believe the car, once it has been
repaired, should not come back to the
garage with problems,” Mr Wiedemuth
said.
GERMAN UNITY DAY S9
TUESDAY, OCTOBER 3, 2006
Sponsored Section in co-operation with Discovery Reports
Prost! KHS boosts
its presence in Asia
W
hether you are in Beijing,
Frankfurt or New York,
chances are the can of
beer or bottle of soft
drink you are holding was filled using
technology developed by the German
firm KHS.
KHS has a long manufacturing history dating back to 1868.
“We have the longest track record in
the beer industry. All the big beer companies in the world have KHS equipment
in their plants. Wherever these companies are and when they need a new line,
we are definitely on the list they will
call,” said Valentin Reisgen, KHS chief
executive.
KHS is the result of a merger between Holstein & Kappert and Seitz with
Klöckner in 1993.
Almost equally as old as KHS is its
track record in China, which started
when it shipped equipment to Tsingtao
brewery in 1903.
Today, KHS is one of the global leaders in the filling and packaging industry
with a focus on beverage and turnkey solutions. In an industry where reliability is
crucial, it is one of the three global players serving premium range products.
Its clients include brewers such as
Heineken, Carlsberg, Bitburger, Budweiser and Warsteiner and soft drink giants Pepsi and Coke, as well as non-food
multinational firms such as Proctor &
Gamble. These clients produce more
than 100,000 bottles an hour, making
KHS machines indispensible.
The company’s strong global presence in different consumer products
comes from its range of full services
from consulting to maintenance throughout the whole product life cycle.
Its product portfolio covers everything from inspecting returned used
bottles or new ones, to cleaning the
bottles, filling, putting caps on, labelling,
packaging and palletising.
With drastic changes in the beverage
industry taking place every few months –
from labels to new bottle materials – innovation is ongoing at KHS.
Among the newest technology improvements is the dry aseptic filling
which saves and reduces water con-
Chief executive of KHS Valentin Reisgen (left) and global marketing director
Achim Wapniewski.
sumption, resulting in a product which
retains its quality and naturalness.
The company is also finding new applications for its products outside of the
beverage industry. Proctor & Gamble,
for example, is enjoying faster, more
efficient machines that use less space and
operating personnel thanks to KHS.
The company’s new strategy is to
focus on existing, proven technology,
with modest adaptations to serve any industry. Almost anything found in a can
or a bottle can benefit from the efficiency
and high technology of KHS products.
KHS also hopes to get a bigger slice
of the ¤20 billion (HK$199 billion) global food and packaging pie by having a
stronger presence in Asia.
“We need to be in both India and
China. With the size of these two economies you have to be in both countries offering sales and after-sales service,” Mr
Reisgen said. Although KHS has been in
China for decades, it has lost some business to local competitors, and it hopes to
regain lost ground by offering highspeed, high-performance equipment versus the low-speed, low-performance and
lower-quality machines made locally.
Aside from the German technology
KHS uses to produce high-quality equipment, its machinery can be used in various applications.
KHS has strengthened its presence in
China and Asia by acquiring the majority
interest in the Chinese Guangdong Light
Industrial Machinery Plant 2 (GLM2).
The transaction is expected to be concluded within the next few months.
The majority stake in the company
was acquired from the former private
owners. The remaining shares are still in
the hands of the two managing owners
who will continue to be members of the
company management.
As a manufacturer of filling and
packing equipment, GLM2 with headquarters in Shantou, Guangdong, is perfectly positioned in the Chinese and
Asian market. Because of the fast-growing Asian market, the company will
reorganise its seven regional Asian
offices by creating a separate China unit
from another hub in Singapore that services Australia, South Korea, Japan and
the rest of Asia. KHS has representative
offices in Shanghai and Beijing.
“We see a big potential in the Asian
market and we have an attractive product
to offer. Our customers are knocking on
our door to see if we are with them in
China. We have been requested to open a
full-blown manufacturing site in China.
We have to be where our customers are,
where the business volume is,” Mr Reisgen said. KHS will surely drink to that.
Böhler Thyssen welds
units to new strength
A
s an industrial application,
welding joins two materials together to create a stronger new
product. In 1996, the merger of the welding units of Böhler, a large steel group in
Austria and Germany, and Thyssen, a
major industrial player in Germany, metaphorically illustrated how the joining of
two firms works just as well in the product world.
“Both companies had their strengths,
but each by itself was not strong enough
to be successful in the long run. The
merger of Böhler Welding and Thyssen
Welding formed a large and robust firm,”
said Böhler Thyssen Welding chief
executive Günter Fuhry.
Böhler Thyssen Welding is a 100 per
cent affiliate of the Austrian BÖHLERUDDEHOLM Group, a leading international specialty steel and material company. The company that emerged from
two corporations with almost a century
of tradition between them has maintained its global leadership by focusing
on global brands, technical expertise and
application support to produce the highest quality and technically advanced
welding consumables.
“Böhler Thyssen Welding provides
solutions instead of selling products,” Mr
Fuhry said. Offering the highest quality
solutions is in the “genetic code” of the
firm.
Evidence of its focus on expertise are
the company’s five centres of compe-
Chief executive officer Günther Fuhry
tence which focus on information, innovation, development, technology and
global networking with leading technical
universities and specialists.
Know-how is always available for
working out solutions together with the
customer.
In addition, the company has a collection of strong global brands built up
through a history of acquisitions including Böhler, T-put, UTP, Soudokay, Fontargen and Avesta. The latter is another
big name which was added to the portfolio after last year’s acquisition of Avesta
Welding. Together, these brands make
up the welding consumables division
representing the second largest in the
BÖHLER-UDDEHOLM Group.
With various products and services,
Böhler Thyssen Welding provides customised and standardised welding solutions to its clients using about 3,000 different qualities in a wide variety of industrial applications. It serves different
industries such as energy including offshore and power plants, chemical plants,
petrochemical, environmental and waste
engineering, LNG, transport engineering, the sugar industry as well as the
complete maintenance and repair and
soldering and brazing sectors.
In April next year Böhler Thyssen
will open a state-of-the-art facility in Suzhou near Shanghai. It will represent the
highest quality and productivity, and
facilitate the sharing of ideas. The move,
preceded by the 2004 opening of its sales
office in China, anticipates China’s
growing demand for high-quality welding solutions.
“We are here to provide solutions,
whether standard or tailor-made, for the
highest demands of global customers. In
China we expect that many industries
will demand high levels of welding solutions within a very short time,” Mr Fuhry
said.
Like its high-impact merger in 1996,
the establishment of an additional stateof-the-art facility in China will surely
weld Böhler Thyssen Welding to yet
greater success.
Saco Shipping pioneers direct
Hamburg-Shanghai sea route
T
he European-Asian sea lanes have
never been busier. Saco Shipping
pioneered efforts in 1994 to establish a direct Hamburg-Shanghai sea
route. The result was a bustling maritime
trade between the east and the west.
Out of this unconventional route, the
German maritime firm has become one
of the largest NVOCC consolidated container shippers in Germany, delivering to
more than 140 ports globally.
The major ports it services include
Hamburg, Bremen, Antwerp and Rotterdam.
Saco’s efficient system, coupled with
complementary air and land freight services, has allowed the firm to run full
steam ahead of competition.
The well-oiled system starts before
leaving the port. All a customer needs to
do is fill in a form online. Saco provides
truck booking to ensure that the shipment
is delivered to the client’s doorstep,
whether it is ordinary merchandise or
dangerous cargo such as chemicals.
“Aside from trucks, we have warehouses and CFS stations to provide reliable and good service,” said Saco Shipping general manager Michael Kreutz.
Saco makes good on its promise to
deliver these services through tie-ups in
different ports, including partners in
Hong Kong, Shanghai, Xingang, Dalian,
Xiamen, Ningbo, Qingdao, Shenzhen
and Beijing.
“We have one of the best partners in
Shanghai where we have our own warehouse seaway. Our partnership is working fantastically. We have to learn from
each other,” said Mr Kreutz, who believes
that a healthy business relationship is
nurtured by an exchange of ideas.
With cargo volume from Hamburg
growing 15 per cent annually, the company is looking for more business partnerships, particularly with firms that
have an A-class license.
The firm’s openness is not only limited to ideas, but also to new destinations
outside of China.
Managing director Michael Kreutz
S10 GERMAN UNITY DAY
TUESDAY, OCTOBER 3, 2006
H. Schroeder
is pumped for
business in
the mainland
Schroeder prides itself in
being so specialised that it is
an expert at producing one
thing to perfection – fittings that protect
pumps from moisture and overheating.
The secret is
a unique bypass
valve, which
makes Schroeder fittings more
reliable and less
costly over the
lifecycle of the
pump than its
competitors’
products.
Its custommade products
are renowned in Axel Mücher
the power, steel
and oil and gas industries for their high
quality.
The ingenious design is a result of
Schroeder’s extensive experience in the
business.
Founded in 1889, the company has
been solely focused on pump protection
fittings since 1950. It is the only company in the world that can claim that.
Because it is family-owned,
Schroeder is able to conduct research
and development at a level many public
companies can only envy. It spends
15 per cent to 20 per cent of its revenue
on R&D. Among its latest innovations is
a de-coking valve for use in oil refineries.
Schroeder is now planning to bring
its specialised know-how to China. Although it has conducted some business
there through its Singapore agent, it is
looking for partners in China to help expand sales.
Schroeder sees an opportunity in
China’s growing number of liquid natural gas facilities, which can benefit
from its special de-gasification fittings.
China’s expanding nuclear power industry also offers potential.
“China wants to make these nuclear
power plants with a higher power output
than anywhere in the world,” said Axel
Mücher, Schroeder’s managing director.
“Our applications are very good in high
pressure. We are the only manufacturer
who can build a pump protection fitting
for up to 600 or 640 BARs.”
Eventually, if sales increase enough,
Schroeder will consider doing some
manufacturing in China.
“We want to be a part of the big
growth of the China market,” Mr Mücher
said.
H.
Sponsored Section in co-operation with Discovery Reports
SOUTH CHINA MORNING POST
Börlind skin care goes back to nature
R
oses are growing in Afghanistan where farmers used to
harvest opium. The force behind the new crop is Börlind, a
company that manufactures face, body
and colour care beauty products. In another part of the world, Brazil, and in another socio-economic initiative, the company is cultivating a plant called cupuaçu
in a protected rainforest.
The skin-care company makes natural
cosmetics that are marketed under three
main product lines worldwide; Annemarie Börlind, Tautropfen and Dado Sens
Dermacontrol, each catering to different
skin-care needs.
For the Asian market, the company
has developed an increasingly popular
whitening fluid that is safe for the skin.
Börlind also formulates gel cosmetics
suitable for warm climates.
Already active in Hong Kong, the
family-owned company aims to be a player in the growing Chinese cosmetics market by offering its full product lines to the
mainland in the near future.
The mainland cosmetics market has
grown tremendously over the years. Sales
are expected to reach 80 billion yuan by
2010, a growth rate of about 10 per cent,
compared with 200 million yuan in 1982.
Börlind owner and president Michael
Lindner was enthusiastic about the pros-
Börlind founder Annemarie Lindner and son, president Michael Lindner.
pects and potential of the mainland market. Recently returned from a trip to
China, he said: “I was very impressed at
the opportunity.”
Stringent guidelines are in place for
the manufacture of all Börlind products,
which are tested for efficacy and skin
compatibility. No ingredients are derived
from animals, and no animal testing is
performed in Börlind laboratories.
One unique ingredient is Black Forest
spring water, sourced 160 metres underground.
“It is neither preserved nor polluted,”
Mr Lindner said. “It is pure and contains
minerals that the skin needs.”
Other natural components include organic seeds and oils, shown in Börlind’s
own garden. The company develops valuable ingredients by macerating the oils in
the sun.
“It is a combination of high techno-
Prym Group expands in Asia
F
needle work and accessorom jeans buttons
ries for wholesale and retail.
for Levi’s to seals
Third is Inovan, which
for women’s intimanufactures contact elemate garments and contact
ments, surface technology
elements, Prym Group
and components for the
products are everywhere.
electrical, electronic and
Not surprising for a 470automotive industries.
year-old family company
Prym Group’s success is
that had its beginnings in
due to the consistently
Aachen, Germany.
excellent quality of its prodThe key to the comucts, whether manufactured
pany’s success is that it did
in Stolberg, Sri Lanka, Manot get stuck in Germany.
laysia, Hong Kong or
“The family was always
China. As the company
willing to invest in new
readies to open its fifth promarkets. If our customers Andreas Engelhardt
duction facility in Asia in
require local presence we
have to go out of Germany into western Eu- two years, Mr Engelhardt foresees
rope, eastern Europe, the Americas and turnover from its Asian operations, now at
Asia,” said Andreas Engelhardt, chairman HK$500 million, to grow no less than 20 per
cent in China alone.
of Prym’s management board.
The second-oldest family-owned comPrym’s original product is the press fastener. Like its geographical expansion, the pany in Europe is also globally number two
company also went into other product areas, in fastening systems. “It’s my goal to be a
resulting in the establishment of three main successful number two,” Mr Engelhardt
business fields. Foremost is Prym Fashion, said. He believes, after all, in the adage that
which makes fastening systems and acces- it is not the big companies that gobble the
smallest ones, but the fastest that beat the
sories for the fashion industry.
Next is Prym Consumer, which makes slowest.
logy and a vision of Mother Earth, which
we have taken from several cultures,” Mr
Lindner said.
Börlind manufactures its entire range
in Germany, and exports it worldwide
through various channels; from health
food and speciality stores to internet
direct marketing.
In its home market, Börlind commands a 55 per cent market share of German health food stores, and is expanding
to perfumeries and upscale department
store chains. In Asia, it sells through representatives and beauty salons.
Multiple factors can affect the skin,
and customers realise that they must protect their bodies.
“Keep in mind that the ecological
breakdown in skin is increasing with pollution and people are using the wrong
products and eating the wrong food,” Mr
Lindner said.
The company keeps innovating to
find new ways to counteract dermatological damage.
Along with a research and development team, freelance scouts explore the
world to find new projects for development, trekking through rainforests to discover natural resources.
Each year, Börlind comes up with two
or three new products.
“We don’t invent ingredients, we look
for what occurs in nature,” Mr Lindner
said. “But we have to discover them.”
The main task of the research department is to assess the appropriate concentrations of ingredients. For example, an
excessive proportion of tea tree oil can
cause unwanted side effects.
All the testing is carried out on human
volunteers.
The family-owned firm company
been working on discoveries for the past
50 years, since Mr Lindner’s parents set
up their operation in the heart of the Black
Forest.
His mother Annemarie, who is 86 but
looks much younger, has garnered several
awards for her work.
She won a lifetime achievement
award in New York for bringing the first
natural skin-care system to the United
States. She has also received two prizes in
France, a country celebrated for its own
skin-care lines.
Members of the jury included scientists, dermatologists and pharmacists, as
well as objective consumers.
With people recognising the benefits
of natural products, Mr Lindner expects
all markets to expand further.
Annemarie Börlind is not only distributing products, but decades worth of
knowledge behind nature’s true advantages.
China relationship helps lift
supplier of raw chemicals
F
rom coating to textiles, plastics,
waxes and food products, Hamburg-based TER HELL can
easily service many industries around
the globe.
With a reputation of excellence in
providing chemical raw materials, the
98 year-old firm attributes its success
to the Chinese market.
Known as the TER GROUP globally, the family-owned company has a
strong financial background. It expects about ¤300 million (HK$2.98
billion) in sales this year through the
combination of plastics and wax
production, speciality chemicals distribution and its growing China business.
“We have become successful because of our Chinese relationship,
which started more than 40 years ago,”
TER GROUP chairman and chief
executive Klaus Westphal said.
China is the world’s largest producer of gum rosin. TER GROUP ex-
Klaus Westphal (left) and
Wolfgang Schrotz
ports 45,000 of the 345,000 tonnes that
China produces for the global market,
making it the largest exporter of gum
rosin from the mainland.
The company has also built a name
for itself in other lines of business.
Its expertise in speciality chemi-
cals distribution involves assuming
risk in sales from large chemical suppliers to small and medium-sized
enterprises.
It can handle requests for small lots
of chemicals within one day – a task
that might take a large firm 10 days.
“We buy at our own risk from the
producer. We take the material from
the plant to our warehouse, we do the
shipping and handling, we ensure the
quality and then sell to the customers,”
Mr Westphal said.
With 45 per cent of its supplies
coming from China, this is the company’s most important market. TER’s
goal is for its growth rate to equal
China’s in the next few years.
TER is looking for new products
and ventures in China to expand its
business.
Managing director Wolfgang
Schrotz said: “Our partner should have
a business philosophy like ours, based
on reliability and reasonability.”
Peter Adolphs (left) and Matthias
Gunkel
Sensitivity to
market and
local needs
are key to
firm’s success
F
rom repairing radios after the second world war to being the top
global producer of sensor devices
in the chemical, automotive, and printing
and paper industries, Pepperl+Fuchs has
come a long way in six decades.
The secret to the German firm’s success is sensitivity to market needs as well
as adaptability to local needs. More than
after sales service, it places a premium
on providing information on proper
product application.
By marrying German management
principles with Asian capabilities, Pepperl+Fuchs hopes to further increase its
share of the Asian market by providing
technologies mainly in factory automation and material handling for different
applications.
The company started operations in
Singapore 30 years ago and now Asia accounts for 15 per cent of its annual ¤280
million (HK$2.7 billion) turnover. “We
expect to grow in the Chinese market,
where we have had a 30 to 40 per cent
growth rate for the past three years,” said
Peter Adolphs, managing director of
Pepperl+Fuchs factory automation business worldwide.
The company, which has a wide
range of sensor products used in different
applications, counts BASF, BMW and
Heidelberg among its clients. Its bestselling products include the inductive
prox switch and the light barrier, which
uses light emission to recognise intrusion and control closing of doors. To
come up with these technologies, the
firm invests 10 per cent of its annual turnover in its research and development
facilities, mainly in Germany.
The company has been in Shanghai
since 1994, where it produces a wide
range of sensors, sensor systems and bus
systems. This year, Pepperl+Fuchs will
open a new facility in Shanghai to
strengthen customer support.
“Our engineering must be close to
our customers’ world to understand their
demands. If our people understand the
language and the problems, then we can
discuss applications and solutions,” Mr
Adolphs said.
BLG Logistics
distributes
across Europe
A
lthough
BLG Logistics offers a one-stop
shop, its roots are
in the ports business. For automobile logistics, it is
the only terminal
operator with a lo- Manfred Kuhr
gistics chain that
distributes goods inland by rail, road and
barge. It discharges and loads traffic
from deep-sea carriers through two main
hubs, Bremerhaven for northern Europe,
and Gioia Tauro for Mediterranean destinations.
BLG strives to improve its customers’ annual productivity by a savings of
3 per cent to 5 per cent.
“We improve productivity on a per
piece basis, year after year,” said
Manfred Kuhr, deputy chairman of the
executive board of BLG Logistics. “We
understand that car manufacturers need
to boost productivity to cut costs.”
The company invests heavily in developing IT software to monitor transport and ensure rapid lead times and offers power workshops to help customers
optimise their processes.
With HK$7 billion turnover last year,
the 129-year-old firm focuses on three
logistics core competencies: automobile,
contract and container. In the automobile
business, it transports 1.6 million vehicles a year through Bremerhaven alone,
and operates pre-delivery inspection
(PDI) centres for cleaning, repairs and
retrofitting. In the entire network, BLG
moved 4.1 million vehicles last year,
making it number one in Europe.
BLG is with its customers at every
step of their international activities. Last
year BLG established a representative
office in Beijing for Daimler’s passenger
cars and light trucks. Hyundai and KIA
utilise BLG’s network, entering through
its ports and use the PDI centres.
The firm pursues discussions with
mid-sized companies looking to expand
logistics to China. It intends to stay close
to its roots by operating a port in China.
Its expertise can be of valuable assistance to Chinese manufacturers exporting into Europe.
The company is seeking a Chinese
partner to add local knowledge. “We can
bring our extensive European experience, knowledge and IT efficiency into
China,” Mr Kuhr said. “We need a Chinese partner to make it work.”
GERMAN UNITY DAY S11
TUESDAY, OCTOBER 3, 2006
Sponsored Section in co-operation with Discovery Reports
Bank continues to
build ties between
Asia and the west
T
wo cities are marking 20 years
of sisterhood with festive
events. Hamburg celebrated
“China Time” last month, while
Shanghai will follow in May next year.
Berenberg Bank has links with both nations, with headquarters in Hamburg and
a representative office in Shanghai.
When Berenberg sent sailing boats to
China in 1794, it was the first chapter in a
history of milestones. It became one of the
first correspondents with the Bank of
China in 1954, for which it provided the
first foreign exchange loan in 1980.
The 400-year-old German bank has
carved a niche based on the continuity and
quality of its professionals.
“We believe in personal relationships,” said Rüdiger Schultz, executive
manager of Berenberg Bank. “We continue to bridge approaches between the
Asian and western ways of business.”
Tailored customer advisory services
help mid-sized German clients to establish, position and develop their businesses
in China. “We do not produce products,”
said Claus Budelmann, managing partner
of Berenberg Bank. “We want to hear
what the customers are looking for, to
truly help them succeed.”
The bank’s China desk is instrumental
in trade financing and provides an important communications centre for direct
contacts.
Rüdiger Schultz (left), Chen Hongying and Claus Budelmann of Berenberg
Bank. The bank’s China desk is instrumental in trade financing.
Meanwhile, there are a growing number of Chinese firms looking to set up corporations in Germany. As assets build up
in China, international investment banks
are fiercely competing for a share.
“We will focus on trade finance,” Mr
Budelmann said. “But we hope to enter
the investment side at some stage, based
on our long business relationships and
friendships with families, institutions and
companies.”
The bank has been enjoying strong
growth in private banking, commercial
and investment banking, and asset management. Last year, net operating profit
rose by 25.2 per cent. Since 2004, staff has
increased more than 20 per cent, and new
branches have opened across Germany.
Leading light in
maritime industry
prides itself on
finding solutions
O
Markus Grob
Boehringer
cranks up
regional
offices
A
utomotive parts get married,
too. Before final assembly,
manufacturers “marry” the
final body with the power train, which
incorporates the engine, transmission
and axle.
Boehringer specialises in the high
precision turning tools that produce the
crankshaft machining in the power
train.
Founded in 1844, the firm offers
entire customised manufacturing
solutions, from engineering and
programme managing support to
installation and production. It takes
considerable competency to make tools
for parts that are accurate to about
1000th of a millimetre. The entire
process, which lasts three to four years,
also includes customer support and
training.
“We have the total knowledge for
machining a crankshaft, and can
provide a complete turnkey system,”
said Markus Grob, president and chief
executive of Boehringer.
His company followed its four main
customers – General Motors, Ford,
BMW and Daimler Chrysler – to
China. Southeast Asian turnover,
coming from India, China and South
Korea, rose from 2 per cent to 9 per
cent from 2003 to last year.
The company expects the region to
contribute 25 per cent soon, given that
the Asian market is likely to keep
expanding by 500,000 cars annually.
“We go where the market is,” Mr
Grob said.
Chinese manufacturers such as
Geely and Cherry also want to grow
quickly. They are in talks with
Boehringer, which welcomes the
potential partnerships. These firms are
more recently formed, and could gain
from the German supplier’s reputation
and engineering expertise.
Regional partnerships could prove
valuable for setting up additional
Chinese offices for servicing. As a first
step, Boehringer will open a sales
service office in Shanghai at the
beginning of next year.
“We need regional offices, to be
able to react quickly. Customers require
service within 24 hours, or else they
might have to close a final assembly
plant. We cannot allow that,” Mr Grob
said.
n a dark, stormy night the
beacon from a lighthouse
serves as the sole guide for
maritime vessels. But German lights
manufacturer aqua signal provides
more than a guide from the shore for
the global maritime industry.
“We are always solutions oriented.
Whatever the problem or the situation,
we try to find a solution together with
the shipping industry,” said aqua signal
chief executive Rolf Wagenfeld, who
considers himself a partner to the
maritime industry.
The 138-year-old firm provides
lighting solutions for cruise and ferry
boats, commercial vessels, military
ships, leisure boats and the maritime
industry by listening to its clients’
needs first. Armed with this
knowledge, the company’s research
and development team then look for a
solution.
The company entered the Asian
market 25 years ago through
Singapore. In 1996 it established a
representative office in Shanghai. The
region accounts for 25 per cent of the
firm’s turnover, including sales in
Japan and South Korea.
“We cannot compete with Chinese
manufacturers on cost. What we offer
our clients are quality service,
solutions and flexibility,” Mr
Wagenfeld said.
The company believes its China
sales of luminaries and lighting
solutions will double in the next three
to five years, and it plans to strengthen
its business in Vietnam.
Rolf Wagenfeld
Five to 7 per cent of the company’s
sales are dedicated to R&D, quality
products and services.
And 99 per cent of its luminaries –
such as navigational lanterns,
floodlights, indoor and outdoor
lighting and even decor beams – are
made in its production facility in
Germany. It will soon introduce a new
series of luminaries to replace the
traditional diodes used in lights by
LEDs.
“We provide more than light,” Mr
Wagenfeld said. The future in Asia
promises to be bright for aqua signal.
S12 GERMAN UNITY DAY
TUESDAY, OCTOBER 3, 2006
Sponsored Section in co-operation with Discovery Reports
SOUTH CHINA MORNING POST
Greener pastures Mainland business is blowing hot as
Electrostar
Schöttle
looks
to
expand
beckon for revived
P
dairy manufacturer
A
bout three years ago,
Nordmilch hired Stephan
Tomat in an effort to save
the struggling company. He
had never worked for a dairy company
– and that enabled him to think outside
the box.
Nordmilch is now the number one
dairy manufacturer in Germany and
number 10 in Europe, exporting milk to
80 countries. In 2004, the company
generated consolidated sales of ¤2
billion (HK$19.9 million).
Nordmilch is the result of a merger
in 1999 of four big northern German
dairy companies.
The pricing war in Europe that
went on for a few decades was eroding
the company’s profitability when Mr
Tomat was brought in as chief
executive in 2003 to turn the firm
around.
“I brought to Nordmilch a targetoriented working style,” Mr Tomat
said. He devised strategies that set
profit goals for Nordmilch for the next
10 years.
He also introduced an open-door
policy, encouraging staff to come to
his office with fresh ideas.
With the financial targets set, Mr
Tomat met the farmers who are
Nordmilch shareholders.
“I announced to them that I have to
basically make ¤100 million per year,
better than 2003. I gave myself three
years for that,” he said.
After two years on the job, Mr
Tomat exceeded his goal by delivering
more than ¤100 million to Nordmilch.
With the successful turnaround of
the dairy company, Mr Tomat has now
set his sights on bigger markets. One
of them is to export milk to China.
In anticipation of a big splash for
Nordmilch into the world’s largest
consumer market, the firm opened an
office in Beijing a few months ago to
search for the best possible way to
enter the mainland market.
To better understand Chinese
business and culture, it is working
closely with a Beijing-based
consultancy company and has hired the
services of a Southeast Asian expert.
“China will become a
more important
market in the future.
Feeding the people
will always be an
increasingly
interesting and
challenging issue”
Stephan Tomat
Chief executive officer
“China will become a more
important market in the future. Feeding
the people will always be an
increasingly interesting and
challenging issue,” Mr Tomat said.
Nordmilch intends to bring not
only its dairy products to China, but its
expertise and technology in cattle
breeding and offer a platform of
integrated business solutions.
Not entirely a surprising move
from a man whose vision is for
Nordmilch to be among the top five
diary companies in China.
The Nordmilch Innovation Centre
is a recent addition to its research and
development.
“We are not launching innovations,
we are constantly launching new
products, which is a big difference,”
Mr Tomat said.
This year, ¤5 million, or 2.5 per
cent of the company’s sales, was
allotted for research and development.
“Nordmilch is in a position to fund
the necessary R&D efforts in order to
become a major player in the industrial
business world,” Mr Tomat said.
Nordmilch is prepared to take on
losses for a few years to show its
commitment to innovation and the
Chinese market.
“We have a long reach. Nordmilch
is really committed to stake our claim
in China. However, we have to prepare
adequately beforehand to enter China
as a strong company,” Mr Tomat said.
Nordmilch’s products come in
different sizes and prices.
By taking advantage of the
economies of scale and tapping its vast
reservoir of 4.3 billion litres of milk, it
can afford to bring down its retail price
to reach more consumers.
“Last year, one litre of our fresh
milk cost 35 euro cents. For that
money, you can’t produce it. The same
quantity of water is eight or nine times
more expensive,” Mr Tomat said.
New products, combined with a
strong branding strategy, are expected
to bring further success to Nordmilch
worldwide.
“We are committed to make our
stake, to come to China as a strong
Nordmilch, as a strong potential joint
venture partner,” Mr Tomat said.
“We will introduce integrated
business solutions in the Chinese
market and not patchwork. That’s a
very important message.”
eople who consider hair as their
crowning glory have the grandfather of Robert Schöttle to thank.
Schöttle invented the hairdryer by reversing the airflow of the vacuum cleaner,
helping millions style their hair.
Electrostar Schöttle, founded 86 years
ago, continues to provide sanitary and
household products of the highest quality.
The German firm carries two lines for a
wide variety of hair care, including hand
towels, soap dispensers and other sanitary
products under the trade name Starmix.
Households, hotels, restaurants and
tourist establishments around the world
carry the Starmix products – from the Marriott Hotel in Paris to the Taj Mahal Hotel
in New Delhi and Xi Yuan Hotel in Beijing.
Electrostar entered Hong Kong in 1970
and the mainland in 1987. The firm has had
a joint venture in Beijing since 1998 but it is
open to more ventures with Chinese partners.
It is important to Electrostar to serve
the market it produces in. Half of its products are sold directly to the Chinese market
and the rest is exported to Germany.
“We certainly want to improve Electrostar’s position and raise our market
share in China,” Electrostar Schöttle chief
executive and managing director Robert
Schöttle said.
The superior properties of Electrostar
products come from the strong focus on research and development to produce new
merchandise that is innovative and environmentally friendly.
Its hand dryer, which features a notouch on/off function using an electronic
proximity switch, was awarded the Blue
Angle symbol for its energy saving attributes.
“Electrostar doesn’t manufacture lowend products. If you buy a Starmix product
you are guaranteed to have a high level of
satisfaction because of the product’s reliability and useful functions,” Mr Schöttle
said.
Export sales manager Thomas Buschmann (left) and chief executive Robert Schöttle
OBE brings innovation and vision to
spectacle makers in Asia and beyond
O
President Ulrich Rümmelin (left) and marketing director Frank Schroeder
BE, a maker of eyeglass parts
such as hinges, is applying its
expertise to new sectors in
the mainland and the rest of the world.
OBE entered Asia 10 years ago
when it established a Hong Kong
subsidiary.
In 2004, it further boosted its
presence by forging a joint venture
with a Taiwanese partner.
The venture, named Globe, is
based in Shenzhen and helps fuel
Asian sales, which now account for a
considerable portion of turnover.
The firm’s values fit in well there.
The family-owned company is more
than 100 years old, and has a
reputation for innovation.
It holds 150 patents, and makes
1,000 products that are replaced at a
rate of 25 per cent a year.
Its products are so innovative that
they have been copied in China.
However, OBE recently won a
five-year patent infringement trial in
Beijing against a local company that
had infringed on the company’s
process patent for making spring
hinges.
“We aim to protect innovation,
and this has allowed us to remain
committed to producing components
that are on the technological cutting
edge,” marketing director Frank
Schroeder said.
“This is also a plus for many
foreign companies investing here
because it shows that international law
does work in China.”
OBE innovation has found its way
outside the optical market. Under the
company’s MIM Plus brand, it makes
small or complex metal parts for use
in mobile phones, aircraft and cars.
The company supplies industry
leaders Airbus, Nokia and AMG.
OBE president Ulrich Rümmelin
said Asia remains an important part of
the company’s growth strategy.
“I travel to Hong Kong and China
a few months a year. In the next few
years we have many plans for
expansion in China,” Mr Rümmelin
said.
Equipment procurer cuts
costs for industrial plants
H
ow can industrial plants save
time and money, and economise on
the foreign machinery
and equipment required
for parts and supplies?
What is the best way to
extend the lifecycle of
machinery, with minimal expense?
V-LINE EUROPE
offers one source for
global procurement of Detlev Daues
maintenance, repair and
operating materials (MRO). The firm
originally located and purchased original equipment manufactured spare
parts for large plants in Saudi Arabia 30
years ago. It has evolved in managing
cross-border supply, and now provides
tailored contracts worldwide sourcing
products from Europe and the United
States.
“We integrate different supply
chain players on one platform,” marketing manager Shahzad Haider said.
“That way, we can lower total procurement costs and reduce cycle times.”
The internet has transformed supply
chain visibility. V-LINE, which invests
almost 2 per cent of its sales in research
and development, links its computer
systems with those of suppliers, logis-
tics vendors and the receiving customer plants.
Having already developed customised digital
catalogues for MRO materials and a tracking system, it is now introducing
proprietary software to
enhance efficiency.
Above all, the firm is
customer-centric.
It
works closely with plant
operators, most of which
are in the steel, automotive and petrochemical
industries. V-LINE follows its customers, such as Volkswagen and Bao Steel,
often moving near them to keep up with
their requirements. That was an important impetus for opening offices in Beijing, Changchun and Shanghai.
In addition, Chinese firms are receptive to learning about the benefits of supply chain management, particularly because they are using more western equipment. V-LINE, historically a frontrunner
in procurement in the 1970s, now perceives huge potential in China.
Managing director Detlev Daues
said: “Turnkey suppliers there could differentiate themselves. They can utilise
our services, to give their customers the
chance from the beginning to outsource
long-term procurement of the MRO.”
Competition spurs Mahr
M
All operations are 100
ahr is a unique
per cent owned. However,
company beMahr is open to potential
cause it actually
partnerships and other openjoys competition. “We
portunities.
like competition, it pushes
In the next few years
us further,” said Thomas
Mahr plans on gaining marKeidel, chief executive of
ket share in the mainland by
Mahr.
serving other provinces and
Since 1861, Mahr has
by combining Chinese and
been the innovation leader
European technology.
in accurate measuring de- Thomas Keidel
To ensure the top level of
vices for a wide variety of
applications in the automotive industry, quality standard from its German headmechanical, precision and optical engi- quarters, Mahr introduces only one or
neering. With 25 years of experience in two new products per year to its Chinese
China, Mahr did not move production operations. This way engineers have intimate knowledge of each new product
there only to save on labour costs.
“We’re producing solutions for and are able to produce it efficiently.
The real driving force behind Mahr’s
China, in China,” said Robert Buchmann, director of sales and marketing success is its employees. “We’re a family owned company and we aim to keep
metrology.
Mahr is also in China to be close to this family orientated climate in all of our
customers. “Innovation is produced out locations,” Mr Keidel said. This atmosof close relationships with customers,” phere allows for better, closer relationships with clients and helps them imMr Keidel said.
A sales force has been active in Hong prove on products and technology.
Boasting a client list of more than
Kong, Beijing, Shanghai and Guangzhou
for more than a decade. Five years ago 30,000, Mahr has the ability to serve any
Mahr opened a production facility in Su- industry that needs precision measurements.
zhou.
Dr Gernot Schaefer
Schaefer Kalk
sets up JV
T
hroughout its 147 years in business, Schaefer Kalk has built an
international reputation for premium-grade industrial products.
Now the German manufacturer is
bringing those same standards to the Chinese market through a joint venture in
Hangzhou.
The China facility will produce precipitated calcium carbonates (PCCs),
which are synthetic crystals made from
limestone and used in fine papers such as
cigarette papers.
“Some paper companies are being
supplied from our German and Malaysian
operations and our Chinese customers
were asking if we could produce them
cheaper,” Schaefer Kalk president Gernot
Schaefer said. “So we decided to move to
China and produce locally for our customers.”
One of his main goals in the mainland
is to develop new customers who are
ready to upgrade to Schaefer’s higher
quality product. “The easiest way to convince customers is to show them our quality. We make products that they can use in
the world market,” Dr Schaefer said.
Schaefer Kalk’s two other lines of
business are lime products for the chemical, steel, construction and environmental infrastructure industries, and trim
waters. Lime, which the company produces out of Malaysia and Germany,
helped build the Schaefer name. The
source of the company’s limestone is very
pure, which makes it suitable for use in
pharmaceuticals and toothpaste.
Schaefer Kalk is preparing to roll out a
new product based on PCCs made with
extremely fine particles. The nano product can help improve image resolution for
photographic papers. The company is
also looking for PCC applications in
China’s automotive industry.
With its Asian headquarters in Malaysia since 1997, Schaefer Kalk is open to
finding partners or acquisition targets to
help it grow in the region.
“Schaefer Kalk wants to be a producer
of high-quality products that our customers trust to get on time and at a reasonable
price.”