From the Oujiang River to the Nile: CHINT Global is creating a new engine for the “2nd East District” market.
The Tales of 1001 Nights tell us that “One who has never seen Cairo has never seen the world.” With business in over 140 countries and regions, how could CHINT ignore the Egyptian market – the Cradle of Civilization? CHINT expanded its business to this land over a decade ago.
Starting from Cairo, the capital of Egypt, and driving 30 kilometers west along the highway at the edge of the desert, we finally arrive on the 6th of October City, the Giza Governorate. This newly industrialized city has gathered together a number of internationally renowned companies, like Mercedes-Benz, BMW, and CHINT EGEMAC. The company’s Egyptian subsidiary has also set its sights on setting up office here.
“I look forward to the successful relocation of our Egyptian subsidiary this December, to an office of over 550 square meters,” Ma Sheng dong, country manager for Egypt, West Asia, and Africa, said over the phone. It was hard for him to hide his excitement, even over a distance of 7,700 kilo meters and a time shift of 6 hours.
In February of 2017, with Nan Cunhui, Chairman of CHINT Group, Mr. Medhat, Chairman of the Egyptian joint venture EGEMAC, and Lily Zhang, Director and Vice President of Zhejiang CHINT ElectricsCo.Ltd., and CHINT Global President in attendance, CHINT EGEMAC officially began operations as the company’s first plant in Africa.
At the opening ceremony, Mr.Nan said that the Egyptian plant is not only an important part of CHINT Group’s global strategy, but also a pragmatic outcome of mutually beneficial cooperation between the two countries. He is fully confident in the potential of the Egyptian market.
After 4 years, all front-line CHINT staff are sending back a series of excellent business performance reports involving the Egyptian market, realizing the hopes that Nan Cunhui had originally placed in the country.
Expansion into Egypt to Create New Growth Drivers
The growth of a business is never down to one person, but is always thanks to “a group”!
Since joining CHINT in October 2015, Ma Sheng dong has stayed in Egypt for an average of 8-9 months a year. When he first arrived there, he found massive room to expand into the market; the possibilities were endless. In his first two years, he focused on market research and visited almost all electrical markets in Egypt.
Companies stationed abroad are prone to rely too much on distributors to gather local information and make decisions. Thoroughly understanding the market and grasping opportunities there are particularly important. Over five years, from passively reviewing market information to active screening and mastery, from serving customers to guiding them, and from one local employee to nine, our Egyptian business has experienced explosive growth.
“Our two predecessors of Guobiao and Guorui laid a solid foundation for us,” Ma said as he recalled the details of their work in Egypt. “In the context of developing a large electrical platform though, we started to worry about the lack of diversity in our customer structure.” He immediately passed this news back to the local base camp. After properly assessing the problems, he started rectifying and improving his sales channels.
Business diversification became a matter that required immediate attention. While investing capital and energy to help existing customers develop even further, we also worked to find new high-quality partners.
Facing an increasingly competitive market environment and the Egyptian government’s policies and support for local companies, CHINT experienced great difficulty expanding its market share. The strengths of all our teams in sales, logistics, operations, after-sales service, and market development became even more evident.
In 2020, the pandemic suddenly disrupted the Egyptian market. However, CHINT Global discovered its customers’ pain points, strengthened partner loyalty, helped them obtain new orders, and changed its operating model to promote business development. In addition, in order to respond to the ongoing stagnation across many customer projects, the Egyptian team immediately offered preferential payment policies.
We now have nine types of customers in Egypt, rather than just distributors. New customers account for 52% of sales, while our pre-tax profits increased by 14% year-on-year. Our resilience and business development capabilities have improved to a significant degree.
In addition to the continuous development of new customers, Mr. Ibrahim, along-term partner, is also a special friend of CHINT.
Libyan born, he created a company called Elmanara, and has cooperated with CHINT for a decade; however, his company suffered due to political factors. He is extremely grateful for his amicable relations with CHINT: whenever he encounters a problem, he flies to Cairo to brainstorm with Ma and his team. From channel sales to distribution cabinet transformation, they continue to give Ibrahim positive suggestions regarding plant layouts, equipment procurement, customer group adjustments, customer marketing model transformations, and other areas.
In 2021, Mr. Ibrahim’s business volume will increase from US $1 million to over US $2 million. He has become a model of mutual growth between CHINT and its customers.
In the past five years, Ma has developed good relationships with the majority of Egypt’s top ten design institutes and contractors, growing them into CHINT clients. From overseas sales representatives to country managers, from single service support personnel to business development specialists, from individual to team operations, responsible for operating and managing local subsidiaries, Ma has not only changed his role, but has also improved his business acumen.
“I am proud of CHINT Global, and being a member of the West Asia and Africa Department. In the past few years, I have received a lot of advice by Mr. Thomas Cheng, General Manager of the West Asia and Africa Department and Mr. Jeff Cai, Deputy Manager, who are both my bosses and my mentors. Through good monitoring and timely correction, they have given many valuable suggestions on multi-tasks, which made us take fewer detour.”
Creating a Global Brand Through Egyptian Operations
The CHINT Egypt subsidiary was formally established in April 2019, forming another milestone in the company’s localization process. This followed on from the CHINT Egypt joint venture plant in 2017, and the Egyptian logistics center and after-sales service center in 2018.
Not long ago, the Egyptian government needed to purchase a batch of wall switches while constructing a new city in Egypt. Due to pricing issues and initial distrust of Chinese quality, CHINT was rejected. After many visits by the Egyptian subsidiary, the order could still not be obtained. Considering that this project would play a key role in continued participation in future city projects, Ma Shengdong and his colleagues decided to bring the products of several of their major competitors into follow-up negotiations and conducted dismantling and burning tests on site.
“To be honest, we were not sure we would succeed, but after comparing all the parts and their flame retardant effects, our products were shown to be of better quality than other competing brands. The customer was surprised by this result and placed an order on the spot.” CHINT ultimately triumphed over its competitors with cheaper products that performed better.
CHINT’s market share in Egypt is now increasing every year. Our current business scope ranges from low-voltage components and household construction switches to dry and oil-type transformers; from self-contained medium-voltage cabinets and ring main units to solar modules, along with a host of other products. Our services cover the fields of power generation, power transmission, power distribution, and electricity consumption.
“The next step is to focus more on supporting our long-standing customers, cultivating new ones, and introducing more new businesses, so that both old and new channels can develop in parallel. We look to enter a high-yield period as soon as possible. Having begun from the simple low-voltage component trade, our supply capabilities now include a full range of products under 35kV. Ma was full of confidence when talking about the company’s future plans.
Localization strategies are particularly important for Chinese companies looking to gain stable footholds and develop in overseas markets. CHINT has always insisted on localized management, an important step in achieving rapid development overseas. From establishing a team that combines management wisdom from both China and Egypt to their localized operations team, Egyptian employees account for more than 60% of staff.
During these years of intensive market development, CHINT has continuously promoted the breadth and depth of its professional services, gradually becoming a well-known international electrical solutions provider. Our products are widely used in the Egyptian power industry, by the government, and in various other projects serving key livelihood industries such as photovoltaics, HVAC, communications, and water treatment.
At the 2020 CHINT Global Annual Conference, with the theme of gathering & change, Lily Zhang, Director and Vice President of Zhejiang CHINT Electrics Co.Ltd.,and CHINT Global President, said that the reasons for CHINT’s success include treasuring their talented individuals while focusing on technology and products; focusing on China while looking at the world; and focusing on internationalization while pursuing a strategy of localization.
At the annual conference, Zheng Beibei, Vice President of CHINT Global, also happily shared the good news about CHINT Egypt with the company’s partners. The development of CHINT Egypt has now become known as the epitome of CHINT Global’s overseas development!
