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June 12, 2015 02:00 AM

DSM execs depict a changing game in Asia

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    DSM Engineering Plastics Asia Pacific
    Ivo Lansbergen said companies in China are in "a different league in terms of speeds."

    GUANGZHOU, CHINA — Ivo Lansbergen likes to think about the philosophical element behind what he calls the “phenomenal speed” in the Asia market.

    As president of DSM Engineering Plastics Asia Pacific, he sees the once dominant paradigm of Western suppliers serving Western customers changing. But more importantly, he understands what sets Chinese customers apart.

    In an interview at Chinaplas 2015 in Guangzhou, he used Xiaomi Technology Co. Ltd. as an example. Xiaomi is the world's third largest smartphone brand and the second largest wearable maker, sometimes referred to “China's Apple.”

    Xiaomi uses DSM's Stanyl ForTii material for antenna splitters on the latest Mi4 smartphone.

    “I can tell you the demands we get from Xiaomi are slightly different. They are in a different league in terms of speeds,” he said.

    “The question is, can a Western company comply with the speed demanded by Chinese local companies?” he said, emphasizing the importance of having local R&D capabilities.

    “My argument would be that a global player like DSM is also set out as a local player in China. … If you are keeping all your trade secrets and all your core development in Europe or in Americas, I think you are going to have a very hard time.”

    But why are the Chinese customers moving so fast and demanding such high speeds?

    “Because Chinese companies need to catch up,” said Li Xuedai, business director Greater China of DSM Engineering Plastics. “The Chinese economy and companies started low and need a higher speed to catch up with global standards.

    “Some people misunderstand that Chinese customers have low quality request,” he added, “Actually Chinese customers have very high request on quality.”

    The cutthroat competition in the Chinese market forces manufacturers to raise the bar, he explained.

    “China is one of the most competitive markets. Everybody is here. Like automotive, all brands are here. If you go to Europe, or the U.S., you cannot see all global brands. But in China, because it's an emerging market and offers so many opportunities, everyone wants to get their share of the market, making the competition more intense than anywhere else.”

    “This market is really about applications,” Lansbergen said, “If you really want to make an impact, it's about understanding what an application is about and what it requires.”

    And that requires more than just technology. “If you look at our people, they are not just materials experts, they also know the industry,” Li said.

    Philosophical element

    DSM Engineering Plastics

    Li Xuedai says companies in China need to move quickly to catch up with global demands and need a material source that can keep up with that pace.

    “There's also a bit of philosophical element to the phenomenal speed in Asia,” Lansbergen said.

    He has been living in China for 1½ years. But his Asia journey started when DSM Engineering Plastics moved its global headquarters from the Netherlands to Singapore in 2012.

    “You move from a place where you work from Monday to Friday and have the weekend off, to a region that's 24/7. I can tell you that's an experience. I'm not going to write that in an Excel spreadsheet and say it's going to generate so much business. I cannot do that. But I can tell you it gives you a different perspective on how business is done in Asia. You cannot feel that from Europe, that's my point,” Lansbergen said.

    “In Europe, it's very abnormal for people to work on Saturday, it's totally not done that you work on Sunday. Here in China, people actually work on the first of May [a public holiday], so the whole mentality [is different], and it's not just China, by the way, this is Asia, the phenomenal speed you see is in everything.”

    Lansbergen added, “I do observe that entrepreneurial behavior in Asia, including China, is very high, not to say in Europe it's not high. They have a different perspective on work life balance, etc.”

    Asia footprint

    Greater China remains the fastest growing market for DSM Engineering Plastics, Lansbergen said, from a regional perspective and from a global perspective.

    At Chinaplas, the company announced the addition of a compounding line in China, the forming of a polyphenylene sulfide joint venture with China's NHU Co. Ltd., as well as a strategic alliance with Ascend Performance Materials Inc.

    Lansbergen said he's pleased with the company's performance.

    China's plastics market in general grows at a speed that's “GDP rate plus a few percentage points,” he said, and DSM exceeded that market growth. “We are gaining momentum…It's been quite nice.”

    Also in Asia, the market in India is coming up. “The Indian economy is doing better now than last year and you see it's coming back in demand for plastics. Ultimately, India is still behind China in terms of growth numbers but also in terms of market development and maturity.”

    He was quick to add that DSM is well established in India with a manufacturing plant to capture the future growth.

    DSM also has a technical center in Japan and considers Japan a very important market.

    “The Japanese value chain is extremely important. You have to be locally present in Japan to be seen as a player not only in Japan but also outside of Japan.”

    A lot of automotive and electronic parts are designed in Japan and manufactured in China or other places, he explained.

    “The specification power, as we call it.”

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