60 MEMBER NEWS SPECIAL 150 Years of Guanxi The Art of Winning Trust Asia Expert Melchers honest handshake rather than in elaborate contracts Although international laws and directives are being increasingly standardized Melchers business will continue to be governed by Guanxi in years to come Especially in times of crisis the quality of interpersonal relations is the all important factor This has been proven by the successful 150 year history of Melchers in Asia Information about the Group Established in 1806 C Melchers GmbH Co KG is a global owner managed company with its headquarters in Bremen Germany It is one of the leading service providers for companies seeking to gain a foothold in the markets of the future Melchers knowledge of the Asian region and the Group s infrastructures in Asian countries have expanded steadily since 1866 Melchers services include the following Procurement of raw materials and goods Manufacture of goods Import export Sales and marketing Locally based logistics Quality assurance Networking of business partners Market development and selection of targeted markets for sales and purchasing Strategic consulting and support for implementation in targeted markets Overall the Melchers Group now comprises More than 50 companies worldwide chiefly in Europe South East Asia China and Korea 25 branches and representative offices throughout Asia 4 offices in Malaysia Petaling Jaya Kuala Lumpur Johor Bahru and Penang Further local companies in South Africa Ethiopia Sri Lanka and Pakistan Around 1 700 employees worldwide including more than 1 000 in Asia support for product development and manufacture purchasing and procurement sales and marketing trading and retailing The company also engages in import and export to and from Asia as well as internal trade within Asia A partner that opens up new markets Melchers is therefore the top address for small and midsize enterprises SMEs seeking to gain a foothold on Asian markets The Group provides them with a network and infrastructures which in many cases they would be unable to afford themselves Melchers familiarizes the firms with local customs and habits cuts a path for them through the bureaucratic jungle and knows exactly when and where they can achieve their goals and above all with which partner The area of business is of secondary importance Melchers procures raw materials manufactures and markets goods ensures their quality and takes care of the logistics Each new product line can be integrated seamlessly into the Melchers Group individually tailored to suit the relevant local markets and customers Market observer not market maker Today the greatest challenge is the speed of change especially in markets and the flow of goods In order to keep pace with Asia s development the market players need to have a long term local presence they also need a very high degree of flexibility and an in depth understanding and appreciation of the country s culture Those companies which insist on introducing their own infrastructures instead of using those already in place are often doomed to failure Accordingly Melchers definitely sees itself as a market observer rather than a market maker The company has mastered the art of waiting patiently and then seizing opportunities at the most favorable moment Melchers Hanseatic background is another major advantage Like the famous Honorable Merchant the customers widely prefer to put their trust in an The Chinese economy is ailing Many western companies have shown their frustration by withdrawing from the Middle Kingdom For its part the Bremen based Melchers Group continues to enjoy considerable success in China as it does in Malaysia The 150th anniversary of its engagement in Asia makes it the oldest German company still active in China and still held in very high esteem Relationships which mature over time The Chinese call this business practice Guanxi It is based on a wide ranging network of personal relations which is deeply rooted in society This has little or nothing to do with pulling strings or jobs for the boys The Chinese do not establish short term relationships for particular purposes Guanxi on the other hand is synonymous with long term support and assistance The principle applies not only to business partners and colleagues but also to friends and to members of one s family Guanxi relationships are never planned they evolve with the years and extend far beyond the sphere of business The longer these relations are fostered the stronger the network grows and the greater the trust in one s negotiating partner A long serving company Melchers has been practicing this very personal form of networking since the company set up its first Asia office in Hong Kong in 1866 This is reflected in the company logo The three Chinese characters were an official gift in recognition of the firm s services Loosely translated they signify Melchers and Everlasting Beauty These close cultural links are largely responsible for the fact that the Bremen based Group now operates the oldest German concern still in existence in China with 25 local companies and representative offices throughout Asia In Malaysia Melchers established their first office as early as 1958 the year after the Malay Independence Their locally available services extend across the entire value chain The Melchers Group provides

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