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Alliances drive global market development in China

This text summarizes remarks made by B&R's packaging market development manager, John Kowal, during the 2010 PMMI MarketTrends panel discussion on 'partnerships to enter and sell to international markets'
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FILED IN:  Package Feature  > Shelf life  > Aseptic
     

If you speak with B&R Industrial Automation’s international sales manager Xiaoguang Hou, doing business in China doesn’t have to be so difficult if you have the right partner. That’s because, since establishing its presence in China in 1996, the controls supplier has brought many machinery builders from Europe and North America together with Chinese OEMs and larger end users, as well as multinationals manufacturing consumer goods in China.

That was the message delivered in a presentation to over 100 attendees of PMMI’s annual MarketTrends conference June 9 in Chicago by John Kowal, B&R market development manager for the company’s new packaging group.

While it’s a prerequisite to have a strong local presence in China’s industrial centers, it’s difficult to build relationships as strangers. To help its global customers get started, B&R routinely makes introductions; shows how to navigate government agencies, trade shows, standards and industry groups; and even helps alliances of smaller OEMs organize shared offices in China. The company delivers technical support from 9 company and 20 partner locations, establishes global pricing for products and training, and operates one of B&R’s 3 global logistics centers in Shanghai.

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He cited recent examples of successful alliances with the automation provider, including a U.S. manufacturer of cutting machinery, a Canadian supplier of assembly systems, Italian food & beverage packaging machinery builders, and German OEMs of medical & pharmaceutical packaging equipment. All the infrastructure and knowhow is in place to do the same with North American packaging machine builders.

For packaging machinery makers from North America and Europe, these alliances can result in various business models. In several cases, OEMs market each others’ complementary low- and high-end product lines in their respective domestic markets. Chinese end users place a premium on critical equipment from the West, such as primary and aseptic packaging systems for food and beverage, while they often use lower cost domestic suppliers for end-of-line machinery. Rising labor costs have contributed to demand for more automated packaging systems.

China itself represents a large market for packaging machinery, but the rest of Asia also goes there to buy machinery. So, B&R has established a network of subsidiary and partner operations in South Korea, India, Japan, Singapore, Taiwan, Malaysia, Thailand, Vietnam and Indonesia.

One of the most intriguing long range alliances B&R China has formed is with higher education. At ten universities, all with B&R equipped labs, B&R sponsors an annual student competition using the company’s automation technologies. The winner spends 2 weeks at the company’s headquarters and R&D center near Salzburg, Austria. (If you read Chinese, visit www.br-education.com).

Download the presentation.

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