Sime Darby 's Success in China

By Zhang Suhua

?

Sime Darby 's Success in China

By Zhang Suhua

The inauguration ceremony of the Sime Darby 10，000-ton Wharf in Weifang， Shandong Province on December 28， 2010， signifcant for promoting the development of the Yellow River Delta.

In the economic and trade cooperation between China and ASEAN countries including Malaysia， enterprises and entrepreneurs of the two sides are making concrete efforts to promote common prosperity of China and ASEAN while realizing their own development. Sime Darby Berhad from Malaysia is one of the typical business representatives.

Double Award Winner

Since 2011， the China-ASEAN Business Council has held the annual activity of appraising and electing “Successful Chinese Enterprises in ASEAN” and “Successful ASEAN's Enterprises in China”， to sum up successful experiences of enterprises on both sides in expanding the market of the other. A Malaysian enterprise was found on the list of ASEAN winners in 2013 and 2014. It is Sime Darby Berhad.

Sime Darby Berhad is a time-honored multinational enterprise group in Malaysia. Initially engaged in the rubber industry， it has developed into a multinational corporation with over 100，000 employees worldwide and businesses in over 20 countries and regions. Its core businesses cover planting， real estate，industry， electrical machinery and energy， and public utilities. In the 2013 Forbes Global 2000 List， Sime Darby Berhad ranked the 542nd. By 2014， its market value reached 54 billion yuan（$8.5 billion）， and its total investment in China stood at 7 billion yuan （$1.1 billion）.

Serving China for 20 Years

With the concept of “developing a sustainable future”， Sime Darby Berhad has upheld respect and responsibility for customers，entrepreneurship and promoted the core values of excellence and integrity. Such a corporate culture has laid a foundation for its successful operation and smooth progress in China.

Entering the Chinese market in 1994， Sime Darby Berhad mainly deals with port construction， heavy-duty machinery， automobile sales agency and palm oil sales. It has set up branch offices in Shanghai， Shenzhen， Guangzhou，Shandong， Hainan， Shantou， Chengdu，Changsha， Yunnan， etc.

Te company has a corporate philosophy of sustainable development. It should be said that its success in China has always been permeated with this corporate value and culture.

For example， Sime Darby Motors started with three car repair shops in Guangzhou，Shenzhen and Hainan in the 1990s， gradually expanding in the market. It has formally established 10 BMW 4S stores in China in 10 years since 2003.

The year 2011 saw the establishment of the 10th Sime Darby Motors branch company in Chengdu. Sime Darby Berhad President Tun Musa Hitam attended the inauguration and declared: “The 10th branch company in Chengdu witnesses Sime Darby Motors's frm belief in the Chinese auto market， and shows the great success achieved by the company in the Chinese market.”

Te Sime Darby Motor's success in China is inseparable from the company's core values and service concept. Luo Jianfang， General Manager of the Hainan Bow Yue Vehicle Trading Company of the Sime Darby Motors，said in an interview: “Serving China for over two decades， Sime Darby has been deeply rooted in the Chinese market， and provided ‘Sime Darby-style' services for Chinese auto users. In addition， the company upholds the core value of integrity， advocates inclusive， invigorative working atmosphere， and expects that of all employees. In our company， everyone believes in and respects others on the basis of integrity. The harmonious working atmosphere makes it possible for employees to focus on working more actively， and ensures professional and heartfelt services for our consumers.”

For another example， the Weifang Sime Darby Water Management Company also upholds the core value of “being as excellent and graceful as water”， carries forward the entrepreneurial spirit of “responsibility， cooperation， innovation and efficiency”， practices the enterprise tenet of “serving the society，boosting development， rewarding shareholders and prospering employees”， adheres to the production concept of “putting safety first，providing quality water， reducing the cost，enhancing efciency and having strong guarantee”， and follows the business philosophy of “putting customers first， providing best services and seeking win-win development” to build the brand of “Sime Darby Water”.

The signing ceremony of the Sime Darby Student Exchange Scholarship Program on June 12， 2012. Mr. Tun Musa Hitam （middle）， Chairman of the Sime Darby Board of Directors，attended the ceremony.

In 2013， the company was rated by Weifang City as the “Five-Star Water Works in Standardized Management of Urban Water Supply” and “Advanced Enterprise in Standardized Management of Urban Water Supply”.

Social Responsibility

While developing its businesses and gaining commercial interests in China， Sime Darby attaches great importance to the cultural and educational exchanges and its corporate social responsibility in China.

In 2012， Yayasan Sime Darby， a foundation set up under the Sime Darby Berhad， and the China Scholarship Council signed a cooperation agreement for a “Sime Darby student exchange scholarship program”， providing special scholarships for Chinese students pursuing advanced studies in Malaysia and Malaysian students taking up advanced studies in China.

The scholarship amounts to 2.5 million yuan （$390，000）. According to the agreement，over a five-year period starting from 2012，the foundation will select a number of excellent Malaysian students to study in famous Chinese universities for academic degrees， and outstanding Chinese students to study in frstclass universities.

Sime Darby Wharf in Weifang， Shandong Province.

At the signing ceremony， Tun Musa Hitam said he hoped this scholarship program could help train more outstanding young people of the two countries， contributing to the exchanges between the enterprises of the two countries. In September 2013， the frst batch of 10 Chinese students subsidized by the Yayasan Sime Darby formally began their undergraduate studies at Universiti Kebangsaan Malaysia.

In July 2014， the super typhoon“Rammasun” landed at Wenchang City，Hainan Province， causing much damage. Te Hainan Bow Yue Vehicle Trading Company of the Sime Darby Motors responded by sending in personnel and materials to the aficted area，and consulted with the local government to undertake post-disaster reconstruction.

Optimistic about Chinese Market

ASEAN has been a priority of China's diplomacy with neighboring countries， as well as foreign trade and economic cooperation. Of all the relations between China and ASEAN states， that between China and Malaysia is particularly close. Te frequent exchanges of visits by Chinese and Malaysian leaders in recent years have fully refected the good-neighborly and friendship between the two countries.

With regard to the trade and economic relations， China had been Malaysia's largest trading partner for six consecutive years by 2014， and also Malaysia's second largest export market and largest source of imports. Malaysia has been China's largest trading partner in ASEAN for seven consecutive years. Te bilateral trade value between China and Malaysia accounts for a quarter of the total China-ASEAN trade.

Thanks to the rapid development of the trade and economic relations， Malaysian enterprises enjoy a favorable external environment for investment and trade in China. Dato Sri Lim Haw Khuang， Director of the Sime Darby Berhad， said: “In the context of global economic slowdown， the Chinese economy still maintains rapid growth. Sime Darby， like other multinational companies， is still very optimistic about the future of the Chinese market. Te enterprises of China and Malaysia should further strengthen exchanges and explore more trade and investment opportunities.”

‘Our Own Concepts in Design'

In some people's eyes， the Chinese C919 has many similarities with the US Boeing 787. However， Cao Chunxiao， an academician of the Chinese Academy of Sciences and researcher of the AVIC Beijing Institute of Aeronautical Materials， pointed out: “We do not copy the path of Boeing 787， but have our own concepts in design.”.

In the process of manufacturing， some special materials were needed to lighten the body weight. For instance， the Boeing 787 makes use of lightweight composite materials for 50 percent of the work. However， China is not yet sophisticated enough to develop and produce composite materials. Hence， Al-Li alloy and some Ti alloy are adopted to cover the shortage.

Al-Li alloy is too complicated to hold its composition， technology and control of performance. Because of that， it is seldom used in US-made aircraf. To apply this material to the aircraft， Chinese researchers racked their brains in design and made a great number of performance tests.

“By way of doing research and manufacturing C919， we have accumulated an abundance of experience on application technology. Meanwhile， we also make some innovations on the basis of technology that exist overseas，” Cao Chunxiao said.

However， there were many problems to be resolved in terms of domestic aviation materials. Experiments are still needed to confirm many critical questions before the plane takes of a real runway.

Can the Chinese C919 catch up？ Huang Jun， a professor of Aeronautical Science and Engineering of Beijing University of Aeronautics and Astronautics， believes the experiences of Airbus deserve study.

Airbus started in the 1970s， almost half a century later than Boeing. However， it made big strides to introduce the fight control technique of fighters and apply it to civil aircraft. Inthat way， Airbus caught up with Boeing.

“Innovation is necessary. It's impossible to surpass your counterpart if you always follow its path，” Huang Jun said. However， “innovation” is easier said than done. Huang Jun suggested that shortcuts are not available at present. Only by taking every step steady could a breakthrough be achieved.

C919 is Chinese designed from start to finish. Like CRH and nuclear power， aircraft made in China take advantage of low cost， advanced core technology and premium service as their core competence to compete in the international market.

First Flight in 2016

C919， independently designed by China， possesses independent intellectual property rights. Chen Yingchun， deputy designer of C919，explained in an interview that independent innovation of C919 involved fve aspects: general planning of the aircraft， aerodynamic shape，air frame design and manufacture， system integration and engineering project management.“From the frst drawing， we designed it on our own，” Liu Daxiang emphasized， adding that“independent research is its fash point.”

Huang Jin explained: “Te C919 research team purchased the hydraulic pressure system， navigation system， landing gear， brakes，engines and other systems and equipment globally， and integrated according to its own design scheme. Te same goes for civil aircraf of Boeing and Airbus.”

At present， C919 is more secure， more economical， more comfortable and more environmentally friendly. The passenger space is superior to its rivals. There are 21 users at home and abroad， and a total of 517 aircraft are on order.

According to experts， CRH and nuclear power set a good example for C919 to “go global”. “Like CRH and nuclear power， aircraf made in China take advantage of low cost， advanced core technology and premium service as their core competence to compete in the international market，” said Liu Daxiang.

Next， C919 is expected to undertake system testing on avionics， flight control and hydraulic pressure， airborne system integration testing and full-aircraft static testing. Before its maiden fight， system debugging and installation of devices and instruments for the test need completion. Te aircraf is planned to make its frst fight in 2016.

‘China Heart'

What deserves notice is that the engine on the frst C919 is not made in China， but by CFM International， a commercial aircraft engine manufacturer （a joint venture with Snecma and GE holding a half share respectively）. According to Liu Daxiang，to cut the risk of integration of many technologies and secure the safety and reliability of the aircraft，sophisticated engines are generally used on new aircraf. So far， the engine on C919 is also used by the A320 and Boeing 737.

In the future， however， China will acquire the production line of this engine from France. Tat is to say China will get the technology of assembly and part of technologies of production of this engine. Besides， the China Aviation Industry Corporation （AVIC） has organized experts for research on independently-made engines. Te Type CJ-1000A engine is expected to have equal performance as the imported one on C919.

The AVIC's Commercial Aircraft Engine is developing the demonstrator of independently-made engines for aircraft. The current plan is to complete the development and test run in 2018， and to simultaneously carry out rounds of continuous improvement on the technologies concerning components，system， technique and materials to ensure that the engine meets the technical requirements of C919.

About the author:

A Malay teacher of the Beijing Foreign Studies University， member of the Malay Research Center and Distinguished Research Fellow of the G20 Research Center of the university.