Taipei Times: What is Taiwan's market potential in your business?
Joerg Wolle: DKSH deems Taiwan a strong pillar that outperformed other markets in recent years. We reported annual sales and profit that grew by double-digits here, from NT$5.5 billion (US$178 million) in 2003 to NT$12 billion last year. We expect the figure to increase to as high as NT$15 billion this year.
Of our four business units -- consumer goods, healthcare, technology and specialty materials -- healthcare contributed about 92 percent of our revenue.
PHOTOS: FANG PIN-CHAO, TAIPEI TIMES
A couple years ago, we decided to expand consumer goods service, especially the general consumer goods, which we call "fast moving consumer goods." Our current principals include Nivea and P&G. We believe this sector has huge potential with increasing demand.
In the past, foreign trading companies could hardly get a foothold in Taiwan, because Chinese people are very entrepreneurial. I remember when I visited Taiwan for the first time in 1988, there were 53,000 trading companies here already. Now, as more and more foreign companies want to come to Taiwan or sell their products here, it's our opportunity to provide our expertise and know-how to them.
Another trend that drove up our business in the last couple years is outsourcing, as multinational companies tend to focus on their core competence. We also look forward to working with more local companies. One major local client is Maywufa (美吾髮). With the pan-Asia reach and huge investment in human resource and information technology, we have more advantage than local competitors. We are late to the market, but not too late.
TT: How much have you invested or do you plan to invest to make inroads into new business segments?
Wolle: To meet increasing demand, we launched our second logistics center in Longtan (龍潭) last month. The center is 33,000m2 and can handle twice the goods than the first one in Chungli (中壢). We also allocated more than NT$100 million to enhance our information technology and infrastructure for this year.
TT: One major weakness of doing business in Taiwan, as indicated by foreign investors, is the lack of direct cross-strait transportation. Since DKSH also represents Taiwanese manufacturers who sell their products to China, how does the traffic ban affect your business?
Erik Trock-Jansen: For businesspeople, of course it will be more convenient for us if direct links are opened, but it seems that this will not happen soon. However, this is not really a key issue in Taiwan's business environment.
TT: What is the key issue?
Trock-Jansen: The key issue is to use the strength of Taiwan's highly educated population to secure a leading position in IT, biotechnology and even pop culture. By doing so, Taiwan can add more value to its industries. Outsourcing industries with lower value will also enhance Taiwan's competitiveness.
Wolle: Every country has certain problems and opportunities. Comparing countries across Asia, I think overall, Taiwan has a pretty good business climate, including stable rules and laws, infrastructure, and quality and reliability of human resources. Overall, we see more opportunities than weakness in Taiwan.
TT: As the Chinese economy is booming, what is the business outlook in that market?
Wolle: It is difficult for foreign service providers to operate in China, because the regulations are not relaxed [enough] yet for us to get the license. To do business there, we need to work with local distributors, but we need to ensure the local partners reach our quality standards, especially in healthcare and consumer goods. Besides, as China is a huge country, it's very difficult to build up a good network across all of China.
However, we are very successful in the engineering field in China, partly due to the demand [related to the] 2008 Olympics. We also see business increasing in specialty raw materials, as China is a big sourcing market.
TT: What are your expectations and goals for business in Taiwan?
Trock-Jansen: We have a good beginning this year with perfect infrastructure and a new warehouse in place to meet the demand. We expect sales to grow by double-digits, and hope to get a strong footing in the market. As sales in Taiwan only constituted up to 7 percent of our global revenue, we hope to push the figure up to 10 percent in three years.
Wolle: For the fast-moving consumer goods sector, we hope to boost the sales to ... the equivalent to our healthcare division soon. Although we have been here for 50 years, from the growth momentum point of view, this is just a beginning.
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