Monthly Archives: May 2012

More on BASF

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Some additional highlights from BASF:

  • They are moving into the West, primarily because the Chinese government has determined that the East has enough economic development.
  • Talent acquisition (and retention) is a big issue for them.  Multinationals used to have an attractive value proposition for employees (ability to move up, travel the world, etc.), but now so many Chinese companies are multinational that the competition for talent is much more intense.  The trappings of hierarchy–like the size of your office, whether there’s a window, the number of people you manage, and your title–are really important to young workers. Our host told a funny story of being asked to change the title of a position from Junior Chemist to Assistant Chemist because no one wants to a be a junior anything in China.
  • There’s so much opportunity in China that it’s easy for them to lose focus by chasing every good idea.  Keeping a strategic focus is harder here!
  • They see the following segments as key for their growth:  construction, packaging, paint and coatings, pharmaceuticals, food and agriculture, mining, and automotive.
  • They use the German concept of “Verbund” to bring production, technology, sales and customer service, and people management together in “smart integration.”
  • They’re building a beautiful new Asian Innovation Campus on the site of their current production facility near the shipyards in Shanghai.  This will bring all the scientists from various divisions together into one facility.  They hope this will lead to more cross-pollination of ideas.

Environmental regs

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While visiting with BASF, a German chemical company, Tony asked about the nature of environmental regulations in and around Shanghai.

Our host told us that the big change has been in enforcement rather than the enactment of laws. They’ve had stringent regulations but until a couple years ago weren’t enforcing them.  Now that is changing, and it’s good news for BASF.  They’re on the green/sustainability side of the spectrum but face aggressive competition from companies that have lower production costs because they don’t follow the rules.  By enforcing the laws the government is helping to create a level playing field, which BASF appreciates.

We also heard that the Chinese government has a rolling “five year strategic plan” and it’s wise to make sure you’re in line with whatever they’re prioritizing in the next five years.  “Green” is now on the docket.

Friday night on the Bund

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The Bund may be peaceful in the early morning but nighttime is a different story!

On the colonial-era side, the beautiful early 20th –century buildings are uplit in warm hues of orange and gold:

 On the pedestrian walkway there are throngs of people—grandparent types, families with young kids, teenagers running in packs, and tourists from all over the world. (And speaking of kids, we learned that in Shanghai there is an exception to the one-child policy:  if both husband and wife are only children themselves, they may have two children.  If either of the parents has a sibling, they are restricted to one child.  This is because the population is aging and the government wants to ensure there are enough young people to take care of their elders.).

Back to the Bund: the river itself teems with tour boats (lit like Christmas trees) and private yachts:

On the other side of the river, Pudong sports all the ultra-modern skyscrapers, some of which serve as electronic billboards and all of which are lit up at night:

Sightseeing in Shanghai

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Our sightseeing day was absolutely packed:

First up was the Jade Buddha Temple, which boasts two large Buddhas carved from a precious Burmese jade.

Tony, Joe and Matt in front of the Jade Buddha Temple

After touring the temple there was a special tea ceremony.  We tasted different herbal teas and ended up buying one that “wakes you up in the morning” and one that’s “good for detoxifying the liver.”  The energy tea has strong notes of coconut: yum.  Maybe I can kick my Starbucks habit?

Dani and Rasheen check out the tea ceremony

Then off to the Shanghai Museum, where we saw gorgeous Ming and Qing-era furniture, calligraphy, painting and porcelain vases.  The Ming dynasty was around the same time as the Renaissance and Reformation, from the 1400s to the late 1500s.  I kept flashing to that scene in the third Indiana Jones movie where Sean Connery breaks a Ming-era vase over Indy’s head, mistaking him for an intruder.  He’s more concerned about the vase than his son.  “It’s a fake!” he exclaims in relief.

Anyway, my favorite part was an installation showing how the porcelain craftsmen organized their villages to facilitate production—from the mining to mixing with water (to make the clay) to throwing on the wheel to glazing to the kiln.  It was an early factory town!

Then lunch in Xintaindi, a hip shopping and culinary district in the famous French Concession.  Mike said it reminded him of Old Town Pasadena.  I fell in love with a silk dress at a store called Shanghai Tang but couldn’t afford it.

Next was a trip to the top of the Shanghai World Financial Center, the city’s tallest building, to take in the view.  The observation deck is at the top of the opening, and the floor is transparent in many places so you can look below as well as around.

 

Mike looks through the transparent glass

Then finally we saw the “Chinatown of China,” an elaborate maze of reproduction Ming-era buildings and a top destination for domestic Chinese tourists. There we toured the Yuyuan Garden and the Yuyuan shopping bazaar, where a whole lot of shopping took place.  I got a silk robe for my mom and silk pajamas for myself.  Other folks bought pearls and jewelry, chopstick gift sets, paintings and scarves.

The four elements of a traditional chinese garden: rocks, water, trees and flowers, and pavilions

 

The shopping bazaar, complete with Starbucks and Dairy Queen

Goodrich and Technetics: two different job shops

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On our last day in Singapore, (which was, admittedly, a few days ago) we visited two different types of job shops.

Goodrich, which is headquartered in Charlotte, has a unit near the Singapore airport that specializes in the repair and maintenance of different parts of commercial airplanes.  They fix the casings that line the airplane’s engines, they upfit small items like the cabin lighting, and they maintain all the inflatables–like the life rafts and the ramps that passengers use if the airplane crashes in the ocean.

It’s a high margin business–especially for things like the inflatables that must be serviced every three years whether they need it or not.  We saw a team of workers folding a ramp to go back into its casing.  It was like a giant origami operation.  James said, “I want them to pack my bags tonight!”

According to the guys in our class who are in manufacturing, the Goodrich operation was extremely clean.

Later in the day at Technetics, a unit of Charlotte-based EnPro Industries, we saw a manufacturing plant on a smaller scale.  Our classmate Joe is an executive at EnPro and the Technetics team really treated us to a VIP tour and reception.

Technetics makes a particular type of pipe fitting that helps seal two pieces.  It looks something like a Slinky.  Like Goodrich, there was no assembly line because each job is different and based upon the customer’s specs.

Recently EnPro had moved one of its US employees to Singapore to become director of business development for Asia.  When asked about how they handle pricing, Brad said you need to set your pricing for the globe and then figure out where to build your product so that your margins make sense.

He also mentioned that the U.S. Embassy team has been instrumental is in helping American businesses figure out how to do business in Southeast Asia.  A recent trade mission to Vietnam was really informative, for instance.  It was great to hear about our government being helpful!

This business was located in a sort of multi-story “apartment complex” for small manufacturers.  We drove up a circular ramp to the fifth floor.  Each floor of the building is leased to smaller businesses that don’t need huge amounts of space.

China as “yesterday’s news”?

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According to our host at DuPont in Singapore, (Peter, an expat from Australia who’s in charge of their Asia-Pacific marketing and business development), everyone doing business in China grapples with intellectual property protection.  Sometimes DuPont will find counterfeits of its products that are still in their development pipeline!

Think of it:  the counterfeiters are so sophisticated they can duplicate products that haven’t even launched yet.  Sometimes the packaging mimics the real thing but the product itself is way off.  And sometimes the packaging is wrong but chemically speaking, the product is a very close match.  That seems to offer some clues about who leaked what.

He also said China still has a unique value proposition for western businesses, but it’s “yesterday’s news” in terms of emerging market upside.

Places like Cambodia, Myanmar and Indonesia are where it’s at now.  He’d just returned from Myanmar, where DuPont is looking at building a new plant.  Dr. Berry pointed out that the West is going to need to figure out how to do business in Muslim countries.

 

A “wow” visit to ZPMC

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Yesterday’s visit to ZPMC was a standout.  Talk about thinking big… they make the cranes that unload container ships at ports around the world (as well as other heavy-duty steel structures like bridges and oil drilling platforms).

Cranes in production

It’s a government-owned company that’s risen to 70% market share in just 20 years of existence.  I suspect this is due in part to their state subsidies, but they’ve also been hugely innovative.  With more that 2,000 design engineers, their intellectual capital (and thus capacity for innovation) evidently dwarfs their competition. They are very proud of this.

Their gargantuan manufacturing facility is on an island outside of Shanghai with more than 3 miles of river coastline. They build and erect the cranes right here, then they use their own fleet of 26 ships to deliver them. They roll the fully-functional cranes off the ships at their destinations–no extra time needed to assemble them at the customer site.  This is a major process innovation that gives them an edge in terms of pricing and delivery time.

One of their special ships carrying five cranes--it looks like it would sink in a storm (to me, at least) but it's specially engineered for the purpose and they haven't lost one yet.

Helen, Rasheen, Rafat and me

Impressions of Shanghai

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Some early impressions of Shanghai:

  • It’s enormous–overwhelmingly so.  It’s the size of five Manhattans, with more than 19 million people.
  • Everywhere you look there are skyscrapers as far as the eye can see.  It gives new meaning to the “concrete jungle.”
  • In the 1980s there were three buildings over 40 stories tall.  Today there are more than 4,000.
  • And they’re still building!  We noticed that when they build residential towers they don’t just build one, they build five or ten at a time.

A partial view from the 100th floor observatory at the Shanghai World Financial Center. Imagine this view extending in every direction and that will give you a sense of scale.

 

A view from another angle; you can see more of the smog

  • Our tour guide said the omnipresent haze was a mixture of fog from the ocean and smog.  It reminds me of Los Angelinos calling their smog “the marine layer.” Ha ha! I’m not convinced fog has much to do with it.
  • We’ve seen far more mopeds and bikes here in Shanghai than in Singapore. People load up their bikes with side cars or trailers and it’s amazing how much they can carry on those things.
  • They have elevated freeways here with flower boxes along the edges.  They also have great digital signs that use a combination of green, yellow and red to show drivers what they can expect in terms of traffic.
  • Speaking of driving, it’s insane.  Yesterday we were on a three-lane road with two-way traffic.  Use of the middle lane was completely random–sometimes our bus would occupy it, sometimes the oncoming traffic would.  The lane markings were purely decorative.  Drivers swerved in and out of lanes, played chicken with oncoming cars, etc.  Our guide said Shanghai drivers need, “Good horn, good brakes, and good luck.”
  • It’s an ambitious city and an economic powerhouse.  The growth in the last 20 years is phenomenal but it’s different from Singapore.  Singapore was all about the master plan.  Everything they’ve accomplished has been conceptualized, strategized and executed with intent and purpose.  In Shanghai it somehow feels more organic.  It’s just this explosion of growth and it sort of feels like the city is just holding on for dear life while it all unfolds around them.

Thank you, Skype

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Most of us have been able to Skype back to our families on a pretty regular basis. For some of us (including my husband and me) this is the longest period of time we’ve ever been away from our kids.  Here I am talking to my son and his grandma.  It soothes even the most “kid-sick” parent–it’s a lifesaver!

Skyping with our son and his grandma