Bystronic in Vietnam: Being creative in a challenging market

There are many examples of quick talking foreign companies setting up operations in Vietnam, thinking that their marketing and financial weight would carry them through, but failed to understand the subtleties associated with doing business in Vietnam; consequently, these companies weren’t around for very long.

However, there are also many examples of smart companies that had been operating in different parts of Asia for a number of years and knew the importance of building and maintaining strong business relationships, which could often take some time to cultivate, and it’s these type of companies that are servicing the Vietnamese market successfully. One such company that has many years’ experience creating excellent business partnerships in Vietnam, and indeed throughout Asia, is the Swiss manufacturer of cutting and bending machines, Bystronic.

Anthony Evans, IMNA Vietnam correspondent, managed to catch up with Mr. Johan Elster, Bystronic’s President of the company’s international Business Unit Markets, and asked him about the company’s strategy for the Asian market, and what type of Bystronic products does the Vietnamese market demands.

IMNA:  Could you give our readers a brief understanding of your company’s history?

Mr. Elster: Bystronic is a Swiss company that started operations in 1964, and at that time the company was specialising in glass processing, then in the early 80s we started developing laser cutting technology and produced and released our first commercial laser cutting machine in 1984, and we’ve been pushing the boundaries  of laser cutting technology ever since. Additionally, in the late 80s we also developed water jet cutting technology, which still forms part of our product range to this day. Over the past 30 years we have built a global sales and service network throughout Europe, Asia Pacific regions, North, Central, and South America, the Middle East and Africa. Through Bystronic’s acquisition of other companies between 1997 and 2002 we expanded our product range further and started manufacturing high end bending machines in Germany under the Bystronic brand. As our expansion into the Asian market started to grow during the late 90s we began to realise that if we were to continue this growth we had to find ways of keeping our cost down in this very price sensitive market. So the next logical step was to set up manufacturing in China, which is what the company did in 2002, and presently, we have 2 manufacturing plants in China with 1 producing laser cutting machines and the other manufacturing bending machines. At the moment Bystronic has representation in eleven Asian countries, with own service and sales companies in Singapore, China, Korea, India, Taiwan, and Vietnam, as well as agents in Australia, New Zealand, Indonesia, Malaysia and Thailand.

IMNA: A lot of machine manufacturers that service Vietnam tend to focus their sales efforts on the multinational companies operating here such as Samsung, Canon, and Honda etc. Has this been Bystronic’s Vietnamese sales strategy, or have you expanded into the domestic markets?

Mr. Elster: Well in some cases, particularly when we were establishing our brand in Vietnam, the big overseas companies are always a desirable target market as they’re usually familiar with our brand name, and they’re also less apprehensive when it comes to investing into new technologies. However, with the amazing growth of SMEs in Vietnam, and a lot of these overseas companies outsourcing part manufacturing to local manufacturers, we see the domestic market more and more desirable for potential growth.

IMNA: How would you describe the Vietnamese market regarding their buying habit and investment into laser technology?

Mr. Elster: I would have to say that presently Vietnam is still pretty locked into punching technology, but over the last 5 years we have seen a lot more laser cutters on the market, particularly with second hand machine coming out of countries like Japan, so there’s definitely a growing interest in new technologies. Vietnam has experienced big changes in their buying habits over the last 10 years, particularly for the mid-range machines, and we’ve witnessed a lot more emphasis from companies wanting more efficiency in production, and of course minimising waste while improving quality. We’ve seen a great maturing of the manufacturing sector here in Vietnam, and we’re pretty confident that this will continue.  

IMNA: A lot of machine manufacturers are coming to Vietnam because of the optimism the country has towards future industry growth. How would you compare the industry optimism in Vietnam to the European community, is there still hope for an economic future prevailing in Europe?

Mr. Elster: Yes, you’re right; Vietnam certainly has a very positive outlook for the future and is always moving forward, even though sometimes these industry advances seem to be a case of 3 steps forward and 1 step back, but that’s pretty much the same in many developing economies. However, European company’s optimism tends to manifest itself in their strategic planning for 5 to 10 years into the future, which through my experience, is not a common occurrence here in Asia. So in some ways it’s hard to make a comparison as Asian manufacturers tend to look only at the short term. This short term approach makes it difficult for us to get interest from Asian companies to invest into the high-end technology, even though in the long term they would save a great deal in so many areas of operations. After operating in Asia for almost 20 years we’ve developed a deep understanding of how the different Asian cultures do business and focused on developing strong relationships in all areas of industry. Building a high level of trust and a solid client base in Vietnam has not been an overnight process. Bystronic invested the time, money and effort in establishing our brand here in Vietnam, and we’re more than happy with how our strategy has unfolded.

IMNA: You mentioned that Bystronic has been developing laser cutting technology since the early 80s, so I’d imagine R&D would play a big role in the company’s success. What are some of the products Bystronic are presently developing?

Mr. Elster: Research and development are certainly a big part of our operations, and always will be. Every 10^th employee of our almost 1600 employees worldwide is involved in the development of products and services. So that should give you a good indication of our commitment to R&D. Presently we’re looking into the area of integrated connectivity, Industry 4.0, or the Smart Factory where the whole supply chain is automated under one roof with cyber-physical systems. This is definitely the area where industry is going, particularly in countries and regions where a skilled workforce is hard to find. So software development and increased automation are certainly 2 areas we look at very seriously. We’re also continuously improving our current product range as well as developing innovative laser, waterjet and bending technologies.

IMNA: Not so long ago a machine manufacturer would just make the machine, but now computer technology and software development is an integral part of a machine’s operating system. What are some of the challenges Bystronic faces in this area of product design and development?

Mr. Elster: Yes, it’s amazing to think that in 50 years just how much computer technology has been integrated into machine operations. In fact when we look at the machines themselves there’s not really that much difference between the various brands. A new innovation will appear every now and then, but within 5 or 6 years most of the other companies would have copied it and integrated it into their own products. But with the automation systems and the software that drives them, that’s where manufacturers can maintain a competitive edge. It’s also important to remember that Bystronic’s strength doesn’t only lie in the products we manufacture, although that’s a big part of our success, but in the total solutions package we offer, which always includes a superior after sales service. Vietnamese customers are very loyal if you take time to develop the relationship.