The Swiss Way To Long-Lasting Relations In China
Jakob Müller CEO Christian Kuoni discusses his company's success in the Chinese market.
Jürg Rupp, Executive Editor
Jakob Müller AG was founded in 1887 by Jakob Müller-Schneider as a workshop to repair narrow fabric looms. Soon he began to build his own looms. Already in 1900, a shedding formation was built based on the Jacquard system, and in 1918, the company started production of a narrow fabric loom for zipper tapes. An important breakthrough in 1956 was the introduction of a technology for hook-and-loop fasteners.
Jakob Müller AG CEO Christian Kuoni is convinced of a great future for the Chinese market.
In 1977, the company began to expand its business into many countries of the world, and Jakob Müller Deutschland GmbH was founded. In 1982, the company began to expand its business overseas, starting with the founding of Jakob Müller of America Inc., and followed in 1994 by the establishment of Jakob Müller (India) Pvt. Ltd. The Far East was conquered starting in 1997 with the founding of Jakob Müller Machinery (China) Co. Ltd., followed in 1998 by the founding of Jakob Müller Nippon K.K. in Japan and subsequently Jakob Müller Hong Kong China Ltd. in the year 2000.
Today, the company says "the sun never sets on Jakob Müller AG." Around the globe, there are around 1,000 employees working on four continents and a representative network covering some 60 countries.
Headquarters of Jakob Müller AG, Frick, Switzerland
The Location In Suzhou
TWAsia: How did it all start?
Christian Kuoni : In the mid-1990s, we realized that the textile markets were moving more and more to Asia. So the decision came up to open our own premises. First, after an extensive evaluation of four locations, we opened an office in Suzhou.
TWAsia: And why was Suzhou chosen as the location?
Kuoni : I can say that the authorities in Suzhou did an excellent job, and they still do today. They helped us a lot with a very low level of bureaucracy and supported us in every sense in our investigations, which facilitated our decision to choose Suzhou. We did it the Swiss way: First, we rented a workshop and had a Swiss manager. However, since the year 2000, we have had a Chinese general manager, Zhou Kai, who is still on duty.
Over the years, the operation grew, and in June 1999, we bought a building on a very large piece of land. In 2008, we were able to buy another piece of land and decided to take a break due to the upcoming crisis. We managed the crisis in a positive way and decided in 2010 to build a new building on our own land, because the existing premises were just too small.
The new, 33,000-square-meter building of Jakob Müller China Ltd. in Suzhou will employ some 300 people to serve the Asian markets.
The development has been impressive: In the beginning, Jakob Müller China employed only five people. Today, according to Kuoni, nearly 300 people are working for the company, of which 200 are production staff. Furthermore, Jakob Müller China has four branch offices with sales and service people to be close to the customers in this big country.
TWAsia: And what was the reaction in China to these activities?
Kuoni : Well, in the beginning, our local competitors smiled and pitied us. These times are over. Today, we are the undisputed leader in our segment, and some of our competitors have disappeared. In the high times, we counted 26 companies competing in our business sector.
TWAsia: Did this move facilitate your entrance into the Mainland market?
Kuoni : Very much so. Thanks to our investment every two years with a considerable amount of money, our position in the market has improved steadily with no problem at all.
TWAsia: If you look back, since you entered the Chinese market, have there been any big mistakes along the way?
Kuoni : Nobody's perfect — we all make mistakes. However, I can say there was no big failure that endangered our activities, mainly for two reasons: First, at the beginning of our journey into the Chinese market, the Swiss manager worked step-by-step. We always work in the same way all over the world: In the beginning, we send our people from Switzerland to guide the start. Then, we employ local management who speak the local language and, even more important, have the same mentality. And that is the other reason for our success in China. As mentioned before, since the year 2000, we have had a Chinese general manager, Zhou Kai.
TWAsia: The Chinese market seems to be very important for Jakob Müller, doesn't it?
Kuoni : Absolutely. If we hadn't been present in that strong way in Asia, we would never have had this strong market position.
According to Kuoni, the training center in Suzhou will be equipped virtually in the same way as Jakob Müller's training center in Switzerland, shown here.
The New Building
TWAsia: Now you are building a new factory in China. What are the main reasons for that decision?
Kuoni : The old factory became too small. It was quite impossible to continue working in a proper way. And on top of that, we believe in the future of these markets.
The new building will measure 33,000 square meters (m2), three times larger than the old one. There is still a reserve of land of some 15,000 m2 for a future project. The location is 7 kilometers away from the existing building. All employees, and they are all Chinese, have the possibility to work in the new facility. Kuoni explained that the chosen location was the best: "We evaluated a considerable number of locations, but at this site, it was easy to move the entire existing organization with all logistical aspects, and even to keep our suppliers." The production includes machinery and equipment for the domestic market as well as for Asia and other global markets.
TWAsia: What are your expectations at the new premises?
Kuoni : We are very happy with the new factory. We will have shorter operational sequences and production processes, and better logistics. The R&D department will be much bigger, which is also in favor of our customers. We will have a larger training center, where we can provide even better service to our customers than today. Yes, we have very high expectations.
TWAsia: Where do you see the biggest differences between the Chinese and, for example, the European markets?
Kuoni : Until today, price is the most important issue for a Chinese buyer. If you sell to Europeans, they want the best price/performance ratio. However, both want the best quality. Many Asian producers still work with "one-purpose machines" because their production program is not that wide. On the other hand, the Europeans ask for highest flexibility because of their wide production programs.
TWAsia: Is there any kind of specific Chinese product program, which will be produced in the new factory?
Kuoni : Not at all. Also, the machines that are produced in China have a Swiss heart. Some components for all machinery with the Jakob Müller label are manufactured in Switzerland and delivered to our local production and assembly sites. But, of course, some components used at the Suzhou factory are produced by local suppliers, according to our stringent quality level.
Jakob Müller celebrated the official opening of the new facility in Suzhou June 8, 2012.