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French connection

Updated: 2013-04-12 10:13
By Zhong Nan ( China Daily)

 French connection

Wu Bin, who enjoys riding horses, has helped Shantui Construction Machinery become a force in French-speaking African markets. Zhong Nan / China Daily

Armed with a bottle of wine and enthusiasm, Wu Bin is on a mission to crack the French-speaking African market

While most Chinese companies in Africa concentrate on English-speaking regions and battle with Indian, European and American companies for work, Wu Bin has taken a different approach, focusing on French-speaking countries where international competition isn't as tough.

As chief representative of the Africa business department of Shantui Construction Machinery Import and Export Co Ltd based in Accra, the 33-year-old is on a mission to expand the business, which sells bulldozers, wheel loaders and cranes, beyond Ghana and into the Central and West African markets.

"In my experience, the profit we make from French-speaking countries is higher than in English-speaking markets in the Anglophone parts of Africa, because there is less competition with most rival companies coming from English-speaking Europe, Canada and the US, and only a few from Asia," Wu says.

Wu speaks fluent French and gained a master's degree in precision chemical engineering marketing from Paul Cezanne University Aix-Marseille III in 2009, before going on to work at Suez SA's headquarters in Paris as a marketing consultant for one year.

He moved back to China in January 2011 for a senior position with his present employer, which is a subsidiary of Shandong-based Shantui Construction Machinery Co Ltd, one of the largest construction machinery makers in China, and then on to Ghana the same year.

He says Shantui is one of the few Chinese construction machinery makers to have built a presence in French-speaking African markets.

Shantui's Accra office, set up to target growing business opportunities in Central and West Africa, now employs 32 African sales and service supervisors alongside 54 Chinese staff members, selling and repairing its products in Accra, Lagos and Lome.

"Central and West African nations are in the process of urbanization and industrialization," says Wu. "Both governments and companies have limited budgets to achieve the goals they want, so they are choosing construction machinery carefully from foreign machinery makers."

Wu, who is from Wenshui in China's Shanxi province, says Shantui encounters the same competition in Africa as in other parts of the world with the basic norm being that the company that provides the lowest price gets the tender.

The company sold 814 different types of construction machinery in West and Central Africa in 2012, representing about 20 percent of Shantui's global business. Togo, Angola, Nigeria and Ghana were the main buyers, accounting for 60 percent of Africa orders. There were also buyers in Benin, Senegal, Equatorial Guinea and Gabon.

In addition to facing competition from Europe and North America, Chinese firms often have to go up against rival bids from Indian, Yemeni and South African companies in parts of Africa where English is commonly spoken.

"Many Chinese company heads are concerned about the rising cost of employing Chinese workers and a 30 percent increase in the value of the yuan against the US dollar over the past six years," says Feng Nian, president of the Accra-based China Enterprise Chamber of Commerce in Ghana.

Feng says Chinese companies can no longer rely on lower labor costs and price advantage to win bids in a number of industries, including construction, commodities and machinery, especially in Anglophone African countries.

Against some other countries China is in fact at a disadvantage in terms of employment costs. Sending a technician from India to Ghana costs around $900 per month, while the monthly salary of a Chinese technician in Ghana is between $1,800 and $2,000, according to the annual business report of Chinese companies in Ghana 2012 produced by CECCG. This is true even if both technicians speak English.

"It's common for Chinese companies to think that all African markets are the same or similar when they come to the continent for the first time," says Feng. But the reality is that with different languages, customs, legal systems and business regulations, doing business across Africa requires a wide variety of approaches.

"The majority of Chinese companies aren't able to recruit enough French-speaking employees to expand their foothold in parts of Central and West Africa, so early birds like us have an advantage in that we can build business relations in the region now, ahead of them," says Wu.

According to the 2012 World Population Data Sheet produced by the Population Reference Bureau, a nongovernmental organization based in Washington, 355 million people in Africa speak French. This expected to rise to at least 710 million by 2050. French is commonly used in 31 African countries and the official language of 24.

"We see this as a huge opportunity and we won't succeed if we can't reach this part of Africa," says Wu. "There is so much going on in terms of infrastructure, trade and in sectors such as finance, energy and services."

According to Wu, even though the market potential of French-speaking parts of Africa is appealing, few Chinese graduates who majored in the language want to work there because they are concerned about living conditions and being far from home.

In an effort to broaden his contacts in Africa Wu leaves Ghana once a month for other countries, including Chad, Cameroon and Senegal, where he often takes along some French wine for the people he is meeting.

Because English is commonly spoken in Ghana and the country has experienced rapid economic growth, more than 22 construction machinery makers from the US, Japan, Sweden, South Korea and China have entered the market there. In comparison, only large transnationals such as US-based Caterpillar Inc, Japan's Komatsu Ltd and South Korea's Hyundai are capable of setting up sales offices in French-speaking markets such as Togo or Senegal.

"Using English as a working language is the primary reason why more foreign companies are inclined to focus on Ghana," Wu says.

"For us, choosing Ghana for our regional headquarters was simple, as the nation itself is a big market and is close to the French-speaking countries of Central and West Africa. It also has suitable ports to unload our products."

In French-speaking African markets buyers often hire French or French-Canadian consultancy companies to assess quality and price. Because of this Shantui has set up a team tasked with providing all product and other information in French. It is also in the process of recruiting 15 Chinese staff who can speak French and have basic knowledge about the construction machinery made by Shantui in West and Central Africa. In addition, the company plans to open another two sales offices and after-sales offices in Luanda and Yaound in the second half of this year.


(China Daily 04/12/2013 page22)

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