Kevin Maurice says no exporter should be paralysed by the fear of intellectual property infringement in China. He’s had his intellectual property (IP) stolen or threatened in Germany, Singapore and even in New Zealand, but through good management and good luck, he’s yet to have problems in China.
Maurice set up design and manufacture company Atrax about 25 years ago. His weighing and measuring products are sold to other businesses which then install them in airports around the world. Atrax products – from the small scales which weigh your check-on baggage to the large scales used to weigh cargo for air freight – are in 101 countries from Iraq to The Philippines. One example is Hong Kong International Airport, where every piece of baggage, freight or mail passing through the airport is routed over an Atrax scale.It is a big market. It is close to other parts of the world. Meanwhile, we are a far-flung little dot in the South Pacific. You can only do so much business from here in New Zealand. You need to get amongst it.
The company is well-positioned in China to take advantage of the surging demand for air travel and resultant expansion of airports across Asia. Atrax began manufacturing in China about three years ago, after Maurice sold off the domestic arm of his business to focus on exporting.
There were a number of issues to resolve before Maurice was comfortable with his Chinese operation.
He found it took substantial effort to document his processes so he could rely on them being made to his standards offshore. He has now developed the documentation to ensure a consistently high standard, but he has also employed an engineering manager who spends around half his year in-market.
Maurice also had to find a factory, and for this he relied on his networks. He and another New Zealand business owner have collaborated to establish a factory in southern China which fulfils both their needs. The businesses have complementary technology but are in unrelated industries.
Finally, Maurice had to tackle the issue of IP infringement. While ensuring he has all the necessary registrations in place, Maurice has also taken a much more simplistic approach. He has segmented his business so that there is little contact between the design capability in New Zealand, the manufacturing plant in southern China and the sales centre in Shanghai. He routinely ships bulk goods back to New Zealand where the products are then loaded up with the software. And, whenever he uses a sub-contractor in China, he will ask them to make a piece of steel or electronic part but never divulge what it is for.
“Some of these things are in conflict with Western management styles but I’m the only guy who knows all the parts of the jigsaw.”
Maurice encourages other Kiwi business people to reconsider China if they’ve previously dismissed it as too hard. “It is a big market. It is close to other parts of the world. Meanwhile, we are a far-flung little dot in the South Pacific. You can only do so much business from New Zealand. You need to get amongst it.”