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 user 2005-05-20 at 3:57:00 pm Views: 64
  • #9459


     BEIJING, May 05 / Overseas expansion is not just the preserve of major enterprises like white-goods giant Haier, and computer maker Lenovo. Shanghai Jielong Industry Corp, a private-sector printing and packaging company with an annual turnover of over 700 million yuan (US$85 million), is gearing up to explore the potential of the US and European markets.

        ”Foreign markets are increasingly within the sights of our company,” said Shen Weirong, president of Shanghai Jielong and chairman of the Package and Decoration Printing Committee of the Printing Equipment Industry Association of China. “Winning customers in overseas markets is important for us to move up in the value added chain as these customers are looking for products with premier quality.”

        The Shanghai-based company, founded in 1973 with initial start-up capital of just 1,000 yuan (US$120), is looking to enlarge its international customer base by enhancing its product design capability and strengthening marketing strategies.

        Its “coming out” strategy is serving as a good example for the hundreds of thousands of small and medium-sized companies in China’s private sector that are keen on tapping the potential of overseas markets.

        According to Shen, foreign customers have different aesthetic values from their Chinese counterparts. For that reason,in 2003 Jielong began hiring the services of three design companies from Belgium, Canada and the Netherlands to help its in-house team design products for customers in the US and European markets.

        In addition, the company has set up three departments responsible for international trade. It also made use of Alibaba, China’s largest business-to-business Internet portal, to seize more opportunities and potential clients.

        And their efforts are starting to bear fruit. The Body Shop, an international personal care and cosmetics chain store operator, became Jielong’s first big client shortly after it strengthened product design capability. Now, Jielong is responsible for supplying packaging, bags and boxes for the Body Shop’s products distributed exclusively in North America – a deal with an annual revenue of several million yuan.

        Meanwhile, Jielong is exporting diversified products such as wrapping paper, gift packing and hard cover picture albums to at least 20 countries and regions.

        Currently, about 10 per cent of Jielong’s products are sold directly to overseas markets. But it should be noted that the company’s major clients in the domestic market are joint ventures and leading Chinese enterprises such as JVC, Nokia, 3M, Disneyland and KFC.

        Without revealing the growth target for international business, Shen said that the company is stepping up efforts to increase its international customer base as much as possible.

        ”We are just starting and there is a lot more room to grow,” he added.

        Overseas customers are not only looking for premier quality but also low cost, Shen said. Printing and packaging costs in China are at least 40-50 per cent lower than in foreign markets.

        China, the country that invented paper and printing, is churning out a growing proportion of the world’s new books and magazines, thanks to rising demand for quality and low cost in the sector, which in turn boosts the development of the country’s printing industry.

        In 2001, Shanghai, one of the country’s three largest printing hubs,boasted 4,000 printing firms. Now, according to Shen, that figure has soared to 6,000.

        But most of the country’s printing firms are small, compete on low production costs, and lack research and development capacity and advanced printing techniques.

        ”Low cost alone will never be a winning strategy,” said Shen. “We need to move up to the value chain and provide the market with high quality value-added products,” he stressed.

        His company has invested millions of yuan in improving its printing equipment. It has introduced state-of-the-art printing appliances such as a seven-colour gravure press and a Mitsubishi five-colour offset press with UV coating, as well as developing ERP (enterprise resource planning) software for the printing industry.

        The Shanghai-listed company saw its 2004 revenue soar 35.4 per cent year-on-year to 717 million yuan (US$86.6 million). During the same period earnings rose to 14.2 million yuan (US$1.7 million), an increase of 43.3 per cent from a year earlier.