Taking on the Challenge of Cultivating the Gigantic Chinese Market
The Core of Sumitomo Electric’s Water Treatment Technology, Zhongshan in China
The production base of POREFLON™ modules has survived a tough period
POREFLON™ modules, the sales of which are expected to expand, are exclusively produced at Zhongshan Sumiden Hybrid Products Co., Ltd. (ZSH) in Zhongshan in Guangdong Province, China. ZSH is about 1.5 hours by sea from Hong Kong and about 1.5 hours by car from Shenzhen or Guangzhou. ZSH was established in 1995 and started operations to produce fluorine resin-related products. The production of POREFLON™ modules started in 2004. It was in 2006 when the commercial production system of POREFLON™ modules was completed in response to the introduction of the modules to sewage treatment plants in Korea; however, it was extremely difficult to maintain this system. Jinyu Zhao, Director of Manufacturing Dept. , who has been involved in the operation from the initial stage says,
“We were in a situation where the factory could not continue its operations unless POREFLON™ modules could be sold, and this tough situation continued for some time. The unstable production volume led to a low employee retention rate and it took a long time for the factory to achieve its current commercial production style.” To overcome this situation, marketing activities in China have been strongly promoted since the start of production.
Our motivation to cultivate the market backed by our confidence that our membranes are revolutionary
Sales and marketing activities in the Chinese market are conducted mainly by Sumiden Asia (Shenzhen) Co., Ltd. (SEAC), which sells a variety of products such as electric power-related products, information and communication equipment, and semiconductors. POREFLON™ modules are also handled and Ziyu Wang of the Beijing Branch of SEAC is one of the staff in charge of the modules. Wang studied engineering at university and first encountered POREFLON™ modules when he was engaged in design work for water treatment membranes.
“Revolutionary. That was my impression. I was convinced that this membrane would contribute to solving various environmental problems, notably including water shortages, in China. I wanted to expand the use of POREFLON™ in the Chinese market myself and decided to join SEAC.” Mr. Wang is in charge of the entire Chinese market. The targets include end users in various fields such as the dyeing industry, final disposal sites (waste disposal sites), and public sewerage systems. He focuses on marketing activities for public sewage use with high needs particularly in rural areas. From users who had actually introduced the membranes, “an overwhelmingly high evaluation was obtained” (Wang). He says that he would continue to properly and promptly find customers’ needs and issues of concern, thus aiming to further increase market share in the future.
The passion of partners for sales expansion marking a new chapter in history
In addition to SEAC, the key to success in cultivating the Chinese market is “partners for sales expansion.” Among them is Mr. Canhui Song, General Manager of our sales agent, Suke Environmental Technology Co., Ltd. He majored in environmental engineering at university and subsequently took a water treatment-related job, where he encountered POREFLON™ modules as a customer. “We tested the actual equipment and found that the energy consumption was low and the modules had high mechanical strength and a long life. They were stain-resistant with a high water permeate flow. I was surprised at their high performance compared to existing membranes. I was convinced that the membranes would bring about innovation in water treatment.”
With the aspiration of contributing to “improving the water environment in China,” Mr. Song established a sales agency for the purpose of expanding the use of POREFLON™ modules in the Chinese market. At the initial stage, however, the reaction from the market was weak. With a belief that the modules would eventually be acknowledged, Mr. Song made an all-out effort to cultivate the market and POREFLON™ modules have been rapidly penetrating the Chinese market since 2015 without losing momentum. “I love Sumitomo Electric’s membranes as much as my wife,” says Mr. Song.
He is devoting himself to his sales activities not by trying to sell membranes but by trying to solve customers’ problems.” It is Jian Li of the Shanghai Branch of SEAC who acts as a bridge between partners for sales expansion like Mr. Song and the Sumitomo Electric Group. “My role is to coordinate between the needs of the partner and our company for sales expansion and share information to develop a system to face the market in a mutual way with the same stance. The purpose is not merely to create profits but also to create a new history—the environmental conservation business—in the Sumitomo Electric Group. I believe that it is our mission to develop the water treatment business into a new chapter of our history.”
Initiatives to reduce the production cost and raise employees’ awareness
Since 2015, POREFLON™ modules have rapidly penetrated the Chinese market. This is attributable partly to the outcome of the sales efforts but most significantly to the progress in cost reduction. It was Hidenao Shima, of the Sales Dept., Water Processing Div., Sumitomo Electric, who was commissioned first to cultivate the Chinese market, where the business was weak, with an eye to global business development of POREFLON™ modules. “Good quality products do not necessarily sell well in China. When I took up my new post in China, membranes significantly less expensive than POREFLON™ were dominant in the Chinese market. Price competitiveness was the key to success in cultivating the Chinese market.” Shima strongly requested the manufacturing staff of ZSH to reduce the production cost.
This request was received by Shinsuke Kawabe and Kenji Ihara, of the manufacturing group. They were engineers who had entered Sumitomo Electric as production engineering specialists.
“We took various measures such as a review of the materials, improvement of the yield rate, and improvement of the work efficiency at the production site. However, the most important matter for promoting improvement was to create an environment where employees at the production site could work with high motivation. So we set targets and enhanced the motivation of individual employees” (Kawabe). “We established a system whereby all members proactively participated in the project and we successfully raised individual employees’ awareness of eliminating waste and unreasonable activities” (Ihara). Consequently, the production cost could be significantly reduced and price competitiveness could be ensured. Finally, we could achieve a robust annual sales increase of about 50% in the Chinese market, starting in 2015.
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