Jürgen Wild, M+W Group
Release Date: 2009-11-30
You recently returned from Singapore for the 20th anniversary celebration of M+W Group’s presence in Asia. I imagine that twenty years ago you were a very different company. You entered the Asian market very early. What does this say about the philosophy and vision of M+W Group?First of all it illustrates that we are a group which, already twenty years ago, considered our engineering and construction business as a global one. We are always prepared to move with our customers. Twenty years ago we went to Asia to follow the development in the electronics industry; we were a partner for European and US companies when they built their fabs in Asia, at a time when the Asian infrastructure was not as developed as today. They were looking for global contractors, so we joined them as their partner of choice in Asia.
It was not just your choice to go to Asia it was also the choice of your customers to invite you to go with them. What do you believe was the competitiveness that you already had at that time and that you developed over time to be the preferred partner of your European customers to operate in this new environment?
Our company always builds on understanding the customers’ requirements in all disciplines, focusing on customer value and reliability. We are looking at how we can support customers in energy efficient and environmentally friendly solutions. We are not a partner for one part of the project only, but for turnkey solutions,, always considering competitiveness of the facility design and construction.
You said that in the beginning you followed the electronics industry. Over time the industries that support these facilities have evolved and changed. We just had the financial and economic crisis last year which of course changed the set up of the global economy to some extent. The world economy will be greener and new sectors will arise in the coming years. How is this affecting your business strategy? Are you focusing on different industries and do you see a shift where your business goes?
That is a peculiarity of our company; growing up with very sophisticated requirements for semiconductor and flat-panel industry initially we have been trained in all different disciplines and acquired relevant qualifications. This knowledge can be transferred to other hi-tech industries which require similar competencies. In the semiconductor industry we learned about the importance of process knowledge and developed an understanding how to adapt such highly competitive global industries. Offering new competitive services and solutions is essential to presenting yourself as a valuable partner for your customer. This knowhow is one of the key competencies which enabled us to access business areas like photovoltaic (PV), which today is our second biggest global market segment. A third pillar is the life sciences industry comprising of biotech, pharmaceuticals, chemicals and nutrition. Other segments today cover energy, science and research, IT, telecoms and automotive industry.
To stay at the forefront of technological developments in different industries you have to very much focus your R&D activities. This of course is a very different R&D activity than, for example, the PV industry itself. How does the process work here to offer solutions that put you ahead of the pack?
Key point in partnerships and team-ups with leading industries is to see what they require from us in regards to new facility solutions. Automation is one of the keys: supporting our customers with more integrated automation solutions specifically in some of the high tech industries and optimizing tool layouts of new and existing facilities is essential for our customers competitiveness in their markets.
As you said, you enter new markets often with existing customers. That is a very comfortable way of expanding internationally. To which extent have you been able to transfer from serving your existing customers abroad to working with domestic customers?
This is another peculiarity of M+W Group; unlike others we develop our local operation as quickly as possible. Operating in China we want to have a local set up. Of course there is back up from the group, but the best practices we bring to our customers, are not always German. This and our global network, whether in the U.S., Singapore, or any other location makes us both a local and a global partner. This is particularly important in China, where we have become a leading player for the electronics industry since our customers built up their plants in the 1990s and at beginning of this decade. We are their partner of choice with our global background and our strong local presence.
How did you go about becoming a Chinese company? Every company that we have interviewed has said that “we want to be a Chinese company.” Some actually manage but for others it just remains a word game. How did you manage to transform?
Our Chinese activities started in 1994. Since then we managed more than 200 hi-tech projects. Today we employ an impressive 550-600 people. We are proud of our well-trained and well-educated Chinese employees; of course, we employ a number of expats, but the majority of our employees is M+W Group trained Chinese experts. So we are talking about a real localized company in China, which operates independent to a very big extent. This localization is essential in order to push this company forward. Setting up operations in China means very little without key certificates. We are one of the leading companies holding licenses enabling us execute projects as a general contractor in China.
One of the things we have discussed with the CEOs in the wind industry is that these are high growth industries. The Chinese are trying very hard to catch up quickly and the Europeans who go to China are very often surprised by the fact that a factory which takes three years to build in Germany takes eight months to build in China. This must create a very interesting and challenging situation for a company like yours.
Complexity of a project plays certainly a role in how fast a factory can be build. To construct a facility in eight months is a challenge, but realistic as our own track record shows.
You of course offer a lot to your Chinese partners. What is it that you learn from China?
A Westerner looking at China could learn how focus on and support for the development of key industries can really make a difference; the amazing thing about China is to see how fast words are followed by action. It takes commitment to build up an industry. National initiatives are put in place, declared a priority and than pushed forward. This applies for instance to the PV industry, wind industry, or even electric car industry, which has been of particular interest to us recently.
And there is definitely a political commitment for electric cars in China.
As you mentioned, China has recognised the need for investment in environmental protection technology in many of the new initiatives and is therefore going forward with a commitment to electrical powered cars as well. A key factor for success is the speed with which such initiatives are implemented.
How are you preparing yourself for the future? A lot of markets that China is investing in today are relatively young and China’s ambitions are bigger than where it finds itself today. A lot of Chinese players that are domestic today will have to go global in order to be competitive. There will be efforts to reduce the cost-to-quality ratio. What is the future that you see for M+W Group in China to support Chinese companies with international ambitions?
That would be the next step for us. In the same way we supported European and U.S. companies when they went to Asia, we can support Chinese customers when they go to other regions. Our global presence, with operations in Europe, Asia, the US, and the Middle East is enabling us to serve our clients starting with feasibility and site selection studies with our comprehensive services all the way through design, construction and handover of projects.
So if we come back in twenty years you will have the twenty year celebration of helping Chinese companies move to Europe.
That is indeed probable. When I go back to China, I will discuss this with the local management. Of course China is a big market and a huge exporter. There are big players in the Chinese industries; if they want to go abroad, then we will be there for these customers with the appropriate knowhow.
We have the press release from your celebration last week. You said “the willingness to tackle management’s challenges continues to be a fundamental part of our corporate culture in 2009.” What are the main challenges that you want to tackle in the coming years?
One of the main challenges we face is that we are a fast growing company. M+W Group is constantly seeking new business opportunities and new business areas. The company’s core business is always combined with hi-tech and surrounding industries. That is why the overall issue of green technology is fundamental to our company. Our own headquarters almost is a zero emissions building, with photovoltaic panels, its own water circulation system and an integrated cooling system. M+W Group is developing into a partner of choice for green technologies and energies.
You said that you are a global company as well as a Chinese company. Germany is a world leader in many of the green industries – if we talk about PV, solar thermal, wind, energy efficiency, perhaps one day electric cars. They have to compete one day with the Chinese but we’ll see. To what extent do you position yourself as a German company with German excellence in engineering? To what extent are you a global company? And to what extent are you a Chinese company? There must be some confusing situations at times on who you want to be.
I’m glad you asked that question because obviously some of our roots are in German engineering culture, a concept which we have introduced to our global businesses. For example our American or Russian colleagues have been trained in the German engineering tradition, simply because we believe that German engineering has the highest reputation and excellent quality, which of course is an asset for us. However no one is going to partner with us purely because of the “made in Germany” mark, this alone will not win you a contract in China. Our strength is, that we cultivate our global spirit through the sharing of experiences of our 4.500 employees around the globe in order to create value to our customers.
So it’s a German technological excellence with a cultural adaptation.
This allows us to pick-up the excellent competencies in each country and to make it a best-in-class solution.
If we look ahead five years from now what do you think will be the role that China will play in your business? Today Asia occupies 50% of your business. What do you think will be the role of China within Asia and within your overall business? We have to see how fast different economies will move out of this crisis. A lot of expectations are on China being a frontrunner and that green will be important.
It’s no secret that the role of our Chinese organisation is becoming more and more important. In five years time we will almost certainly have more than 1,000 people in China. As we have mentioned, there are a number of new business opportunities. M+W Group will also be looking for the next generation in technology in China in the PV and other industries. We look at the complete segment of green energies; we have a great deal of experience in environmental protection, so we are interested to grow this business segment further. The electronics industry is another possibility, with a market of more than one billion consumers. There is huge growth in health care and the pharmaceutical business where a leading contractor like us would have very good prospects. Suffice to say that in terms of our growth, China will play the most important role for us.
Is there anything important you would like to share with your Chinese counterparts, China’s political leadership, and the business community?
The topic of green development is a very important commitment for M+W Group. It is a shared commitment, where we can align ourselves to partner up on technologies, whether it be water infrastructure, energy efficiency, or green buildings. We believe that we are a partner of choice for these industries and we will strive to contribute even more in the future.
| Company: | M+W Group |
| Position: | CEO |
| Country: | Germany |