ID :
66240
Wed, 06/17/2009 - 19:51
Auther :

RIGHT PARTNERS, 'GUANXI' KEYS TO UMW'S SUCCESS IN CHINA


From Vincent Low Seng Guan

BEIJING, June 17 (Bernama) -- For UMW Holdings Bhd, having the right
partners and maintaining good relationships with them were key factors for the
success of its investments in China.

Its president/group chief executive officer,Abdul Halim Harun, said
it was not luck but the company's philosophy of 'Know your partners and know
them well' that played a key role.

"Finding a business partner is like looking for a partner to marry. We must
know each other before tying the knot," he said in an interview with Bernama.

Abdul Halim said UMW has eight investments in China and four were
profitable.

"It shows that we've made the right move and worked with the right
partners," he said.

He said Wuxi Seamless Oil Pipe Holdings, which UMW has 22.3 percent stake,
was the group's most profitable investment in China; it was listed on the New
York Stock Exchange in 2007.

He said the investment in the oil and gas sector which started in 2002,
which was his brainchild, was now generating a revenue of RM1 billion.

"The sector is now the second largest contributor of the group's revenue and
80 percent of the income comes from overseas," he said.

Abdul Halim said China's hugh market and potentials attracted the company to
invest there.

He said UMW then stationed a staff there to gather information on the market
or partners.

In the same year, UMW set up a 100 percent-owned company, UMW Oilfield
Service, in Tianjin to repair pipes.

UMW then partnered Beijing Huashi Hailong Petroleum Machinery Co Ltd to set
up Shanghai Tubecote Petroleum PipeCoating (STPP).

Abdul Halim said it was through its partner in the STPP that the company was
introduced to Baoji Petroleum Steel Pipe, a subsidiary of China national
Petroleum Corp.

"UMW and Baoji Petroleum later entered into a joint venture to form Shanghai
BSW Petropipe Co Ltd.

"This is where the Chinese 'guanxi'(relationship) comes into play," he said.

"Many joint ventures in China failed as a result of the partners'
relationships turned sour. We must develop and deepen the relationships.

"It is through these relationships that bring us more partners," he said.

Abdul Halim said through joint ventures with Chinese partners, UMW has
established six plants in Shanghai, Jiangshu, Wuxi and the latest in
Qinhuangdao.

The new 1.3 billion yuan (RM666 million) Zhongyou BSS Petropipe Co Ltd
plant, a joint venture with Baoji Petroleum Steel Pipe Ltd, was recently opened
by Prime Minister Najib Tun Razak while on official visit to China
recently.

He said the company would not only like to boost its investments in China
but diversify them.

Six years after it set foot in China, UMW has become one of the biggest
Malaysian companies there, with projects ranging from distribution of industrial
equipment, manufacturing and assembly of component parts for oil and gas
industry.

Abdul Halim said besides manufacturing oil and gas pipes, UMW also has a
licence to distribute Toyota folklifts in Zhejiang province and Shanghai.

He said the group was also diversifying its business and its lubricant oil
manufacturing plant in Xinhui in southern Guangdong province would be
operational within a year.

The plant is a 60-40 joint venture between UMW and Hong Kong-based Dah Chong
Hong Holdings Ltd, he said.

-- BERNAMA

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