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Intertek positioned for big growth in China

(China Daily)
Updated: 2009-01-06 07:49

Wolfhart Hauser, CEO of the London-based firm Intertek, a leading international provider of quality and safety services to a wide range of global and local industries, talks with China Daily reporter Chen Weihua during a recent visit to Shanghai.

Q: How is Intertek's business in China?

A: For Intertek, China is a very important country, as you know, because a lot of products which we can test, inspect and certify are coming from China. And I think whatever will go on in the world economy, the Chinese economy will show a very good growth rate in the future. So China is very important for us today and even more important in the future. That's the reason why I'm coming quite often to China.

Q: How do you think of food certification, after the Sanlu milk powder crisis?

A: I think every government learns from crisis, and if you look into the food sector we also do a lot of food testing. I think you see many crises in the world, not only in China.

All the governments have to learn how to implement quality measures that these things don't happen or happen to a lesser extent. But I would not say this is specific for China, if you look back to the past the disease in Europe. All products not only in food might have problems; you have to make sure that you have high quality supervision and you do the right inspection and testing so that risk is as low as possible. In our technical world, you always have some risks left.

Q: Will it be an opportunity for Intertek to expand in China after the country is paying more attention to product safety and quality?

A: As you see with our cooperation here in the GSV (global security verification) program, we have always been open. We've been the first company starting here in China, with joint ventures. As you know today for a lot of testing, we would not need to have joint ventures any more. That has changed. But we still understand the needs of China in a market, it's important to have close contact cooperation or joint ventures with government bodies here in China. That's positive for both sides.

Q: How do you help potential customers understand your business?

A: First thing is to educate the market and to talk to the press.

Second step is to announce our services in local magazines, technical magazines and newspapers. We have web marketing and sales teams. We have programs tailor-made to our clients (bigger ones and smaller ones). We also organize a lot of trainings and seminars for marketing approach.

Q: Do you have any recruitment plan in China?

A: We are constantly recruiting people in China, and we are growing very fast in China. We already have more than 6,000 people here in China.

The industry is expanding not only here on the coastal areas, some of the industries are moving inland China and we are following them setting up labs and offices there. I think we will have a very good growth rate over the coming years here in China.

Q: How much does China contribute to your global revenue?

A: The revenue side, what we are publishing is overall Asia, the contribution of Asia to our profit is the highest, compared to the other two regions. But you have to reflect that we have to do a lot of selling and marketing in North America and in Europe, because retailers that are our customers there, where we get a lot of orders from, they are in these regions and then the testing and operations are done in Asia.

This is not the comprehensive way to look at it. We have to look into industries. It's clear that most of the revenues we make here in Asia are from textiles, toys and electronics products. It's currently not that much in the oil, chemical and pharmaceutical sectors. But that might change in the future.

Q: Will the unpromising economic environment influence your business?

A: It's very difficult to give an outlook on the world economy. You hear very different opinions. If we see a slowdown in the world economy, then I think it will not affect a lot, China and our business. Because we are not depending on the volumes of products being produced in our business, as I said we usually test the prototypes. So we are depending on the product variety and also depending on the demands in relation to quality and safety, environment issues and corporate social responsibility, and these drivers will stay even if we have a slowdown in the world economy. But that must not mean that we are recession-proof. There are areas where we are volume-driven.

Q: For Chinese exporters, they face heavy pressure from cost rise. How much should those exporters invest in certification in terms of product export?

A: First of all, testing certification is only a very, very low cost base in relation to the other factors you mentioned. And testing certification is very important to sell the product in a lot of countries. So it's not only the design, people are looking for quality if they spend money, especially if there is a slowdown in the economy. When they don't have that much money, they really want to make sure that they buy the right product, and they look a lot more not only into safety, but we see an increasing demand in performance-related issues. People want to know before they buy a product whether the performance of the product is right. So I think the economic slowdown will not affect us a lot.

Q: What's your expectation for China in the next five years?

A: We will grow with the Chinese market. We will also offer more services in more industries. For example, food, we are not a very strong player currently, but we think food is, for Intertek globally and also in China, a very important market. We will add new services which are needed from today on. And we want to stay as the leading company supporting customers here in China for all exports and maybe more and more in the future also for some more domestic market services together with our Chinese partners.