Geplaatst: 24th June 2018
Sino-Dutch “the Belt and Road” Leiden business seminar
Beijing is the starting point of the “Belt and Road”, and Rotterdam, the Netherlands is the end of the “Belt and Road”. On June 22, the Sino-Dutch “the Belt and Road” Leiden business seminar was held in Holiday Inn Leiden, by Jomec Group and the Sino-Dutch “the Belt and Road” Development Center. The seminar focuses on how “the Belt and Road” between China and the Netherlands will promote the economic and trade cooperation between the two countries and mobilize the Sino-Dutch knowledge and production capacity for the benefits of the two countries.
Speech by Zhang Guosheng, Commercial Counselor of the Chinese Embassy in the Netherlands
Dutch parliamentarian member Fannie gave a speech at the meeting
The Chinese and Dutch government officials and civil societies attending the meeting held extensive discussions on a few sensitive topics that they are currently exposed to in the “Belt and Road” economic and trade activities. The participants were enthusiastic and heated, and expressed enlightening views from different angles on how to promote “the Belt and Road” Initiative. The seminar was hosted by Guo Yufang, Chairman of Jomec Group.
Many Dutch business representatives delivered speeches at the meeting. Cabooter Europe-China Specialist Peter introduced the important role of the EU-China Specialist in the “Belt and Road”. Ms. Esther, a partner of Jomec, introduced the relevant legal issues and solutions for the “Belt and Road” European and Chinese companies. Mr. Maarten, the partner of Jomec, introduced the problems and solutions of the Sino-Dutch mergers and acquisitions in the “Belt and Road”. Director of the Municipal Development and Economics Agency, Henk, introduced the development and opportunities of the Dutch real estate industry. Jan Boone introduced the solutions for the Dutch renewable energy industry and China’s contribution to the renewable energy industry.
Two panel discussions were also held in the forum. The first focusing on political issues, while the other targets on business issues.
Geplaatst: 30th January 2018
Chengdu Dutch Village Project Match-making Meeting
On 25th Jan 2018, Jomec group and Baifang Agriculture jointly held the Chengdu Dutch Village Match-making Meeting in Holiday Inn Leiden. During the meeting, the participating companies from China and the Netherlands have reached initial agreement on the cooperation. China Dutch the B&R development center is the co-organizer of this event.
Besides the organizer Jomec and Baifang Agriculture; co-organizer China Dutch the B&R development center, many Dutch agriculture technologies companies (e.g. Rijk Zwaan, Delphy, Urban Farmers, Floating Farm, Niek Roozen design), research institutions (Wagningen UR), official organizations (Chinese embassy, Dutch Innovation Quarter etc.) also attend the meeting. Parties had in-depth discussion on the action paths and other project details.
Chengdu Dutch Agriculture Village project is devoted to the introduction of agriculture technologies. Under the context of “the belt and road” initiative, the project operator and local government mainly focus on the European leading agriculture country, the Netherlands; and wish to land Dutch agriculture project in Chengdu and establish a world-class agriculture technology and agro-product demonstration center, agriculture technological research center and trading center in Chengdu via the favorable policies and government support. The project operator hopes to cooperator with Dutch partners in the following five domains:
- Agriculture technologies: introduce advanced horticulture design, greenhouse technologies, seeding technologies, agriculture machine technologies to the project;
- Introduce the agriculture research center and technology incubators; cooperate with Wagningen University in terms of agriculture R&D;
- Introduce Dutch agriculture cooperative and agro-food auction system; establish Dutch-Sino agriculture industrial association to facilitate the cooperation;
- In-depth cooperation in green agriculture and agriculture tourism etc;
- Cooperation in agriculture financing and investment;
After this meeting, parties have reached initial agreement on cooperation. The project will be financially supported by Chinese parties and technologically backed by Dutch parties. The project will achieve substantial fruits in the second half of 2018.
Geplaatst: 23rd June 2017
Successful acquisition of Holiday Inn Leiden
Jomec International, as the financial advisor of the Chinese investor, successfully assisted the client in acquisition of Holiday Inn Leiden (a four-star hotel in the Netherlands). Jomec International has rendered a full set of buyer-side advisory service, including project investigation, valuation, offer drafting, negotiation etc, until the close of the transaction.
Holiday Inn Leiden has been standing by the city Leiden since 1968, as the first hotel in the Europe under the name of “Holiday Inn”. The acquisition cover the Holiday Inn Leiden property, Leiden Convention Center and the access to the land in the surrounding areas. This will be the first footprint of the Chinese investor in Europe. Considering the complementarity in the advantages between hospitality and the Chinese investor’s own business, the Chinese investor has the confidence to inject fresh blood in to the historical hotel, and boot the revenue and profitability of the hotel.
“With the globalization trend of Chinese economy, an increasing number of Chinese enterprises began to seek high-grade assets with a global horizon.” Said by the head of Jomec International, “Although Chinese foreign exchange policy is becoming more stringent, the global M&A trend will not change fundamentally, the successful acquisition of Holiday Inn Leiden is a very good example. Under this context, we will continue to deliver the best outcomes for our clients through our extensive experience in China-related deals”.
Geplaatst: 29th September 2016
The Project of Direct Shipping Lines Between Huanghua Harbor and Rotterdam Harbor has been signed
Memorandum of Understanding (MOU) of Opening Direct Shipping Lines between Huanghua harbor and Europe (Rotterdam and/or other harbors) Project was signed by Jomec Investment Company and the Government of Bohai New Area during the forum jointly held by Hebei Province and South Holland Province on 29th September 2016.
In accordance with the Memorandum, the Parties agreed to start the PPP (public-private partnership model) project between Bohai New Area and city of Rotterdam. Meanwhile, the Parties have planned to jointly develop the direct routes between Huanghua harbor and other European harbors. The government of Bohai New Area and Jomec Investment Company also signed a Memorandum to build a general aviation industrial park together.
Since the friendly relations established in 2007, Hebei Province and South Holland Province have made fruitful cooperation in the fields of economy, trade, water conservancy, environmental protection, education and agriculture. In May 2016, two provinces signed the “Memorandum of Cooperation between Hebei Province and South Holland Province 2016-2020”, which provided a blueprint for the cooperation in next five years. Governor of South Holland Province, Mr. Smit, claimed he wishes that two provinces should push for broader and deeper cooperation in the field of water pollution control, soil remediation, and facility agriculture.
Images from the Bohai New Area government website
Geplaatst: 22nd April 2016
Mr. Yufang Guo, The Chairman of the Board from Jomec Investment: The Current Situation of Overseas M&A of Chinese Enterprises
In the afternoon of 22 April, the Cross-Border M&A and Hi-Tech Investment Summit (3rd) and the Award Ceremony of Golden Whistle Price (2nd) hosted by Morning Whistle Group and China Association of Private Equity, supported by Cadillac were held in Shanghai. The leading authority in the academy, heads of government and business leaders from the field of cross-border investment and M&A participated in a series of speech and round-table discussion about the topic of Overseas M&A.
Yufang Guo, the chairman of the Board of Jomec Investment delivered a speech titled “The Current Situation of Overseas Mergers and Acquisitions of Chinese Enterprises”. The following is the transcripts of the speech.
Mr. Yufang Guo:
Thank you, the host. Thank you, President Wang. I am very delighted to share my thought with you.
The topics of high-end manufacturing industry with Industrialization 4.0 and Chinese overseas M&A have been discussed during the summit forum hosted by the Morning Whistle Group.
The Investment and M&A have become a popular statement these years. However, the problems are always more than successes in practice.
Let us talk about the current situation about the overseas M&A of the Chinese enterprises. Nowadays, there is a phenomenon of impetuosity in the field of overseas M&A. The conversion rate of international M&A is low, but the success rate after the M&A is lower. The Industrialization 4.0, the Manufacturing Renaissance, the “Going Global” strategy of Chinese manufacturing industry and “look to the most advanced in the world” are aimed at avoids detours by using for reference the experience and lessons abroad. If we operate the overseas M&A with a blundering mood, the detours are inevitable.
Plenty of Chinese companies choose to do overseas M&A businesses due to the financial consideration. The listed companies tend to choose the large overseas company with high profits as the M&A target. Therefore, the PE ratio in China will grow up faster. However, during the M&A, the Target company and Chinese company usually lack a good connection.
Once I was accompanied by a principle officer of a Chinese company doing M&A business in France. A French senior official greeted us. This French Official asked us: “do you have any experience in the field of international M&A? How to recombine this company after the M&A?” The target company is a large French company. The M&A means a recombine of the company management. The principle officer of the Chinese said, “We will retain the whole of the target company including the management, the staff and the production. We hope that the capacity of the company can also be expanded since the company is facing the problem of capacity adjustments in Europe.”
In previous years, the European market is not too optimistic as a whole. Chinese entrepreneurs tend to tell the target companies that the Chinese market is huge enough to accept any product. Our M&A is aimed at helping European enterprises to develop Chinese market. China has a large market. We can solve all the problems you are struggling with. After that, you are still you and I am still I. In the end, it gives us more opportunity to cooperate. The above arguments are quite popular among the Chinese entrepreneur when they are dealing with the overseas M&A business. This is the objective reality which is quite attractive to the target company. Until now, almost all the transnational corporations are facing all kinds of difficulties in China. Why? The current Chinese economic development and the special cultural of Chinese enterprises are different to the cultural of the transnational corporation. These kinds of differences lead to the problems in the process of internationalization of Chinese enterprises.
Furthermore, I would like to talk about the weakness of the Chinese manufacturing industry. All the middle and low-level industry products manufactured in China are over capacity, not only in the Chinese market, but also the world market. This phenomenon mainly exists in middle and low-level industry rather than high-level industry. China is the largest consuming country of the high-end manufacturing products in the world. Some kinds of brands in Europe, like the automobile industry, luxury, and food which are facing sales difficulties in Europe, are popular in China. When Chinese customers come to Europe, they usually buy five or six luxury handbags per person. If a European want to buy a such a handbag, the seller will give a cup of coffee to the customer first. Then they will talk about the history and culture of the handbag. When it comes to Chinese, a shop might be sold out immediately.
During the last thirty years, there are lots of excellent Chinese enterprises appeared. However, the Enterprise Culture still needs to be deepening compare to the first world level for the company. Now we still have a long way to go. The weakness of the Chinese manufacturing industry is that there are too many enterprises concentrated in middle and low-level manufacturing industry. We are in need of famous brands and key techniques. There are some foreigner calls the innovation of Chinese enterprises as “copy innovation”. On one hand, “copy” made lots of Chinese enterprises stand up at the international level. On the other hand, “copy” can lower the price. Although European and American enterprises cannot manufacture with a high speed and a low price, their level of research and development is higher than Chinese enterprises. If always follow with others, then the Chinese enterprises will never become the world leading enterprises.
What is the meaning of high-end manufacturing? I have been working and living in Europe for a long time. I can tell you that most of the Chinese entrepreneurs in Europe are patriots. We always talk about how to catch up with and surpass the European and American enterprises. The thing is, we need to be in the right frame of mind.
The Industrialization 4.0 is not a new phenomenon. From the second industrial revolution in the 19th century to now, the European and American industry have always been ahead of China. This is lead by the spirit of the craftsmanship. The craftsmanship does not only exist in Germany, but also in other countries in Europe. The core of the craftsmanship is, be meticulous at their jobs. The manufacturer will not stop improving unless they have made the best. This spirit has nothing to do with the level of technological development. A few years ago, I rent an apartment in Beijing. The apartment was located in the central area of the city. It looks very exquisite from the appearance. However, no matter how hard I try, I could not turn the water tab on. This problem is very easy to be solved. It has nothing to do with high technology. But the manufacturer was careless. They might think that it is ok with a beautiful outlook. This is not a craftsmanship. Most of the staffs in the European enterprises are likely to change when they saw something need to be changed, even it will only make a tiny improvement. Huawei has developed this craftsmanship these years so that it can make a perfect job in the mobile phone industry. I believe, more and more Chinese enterprises are working hard to catch up. Of course, this will need time.
The heart of the high-end manufacturing in Europe is not the manufacturing itself, but the purpose of the manufacturing. The purpose of the manufacturing is to satisfy the need of customers. The target of European enterprises is not only to produce the products, but also design a solution with modern high technology. Thus, the size of the line scale is not so important anymore.
A month ago, I received a delegation of Chinese manufacturing industry. They went to the Netherlands and Germany to visit the manufacturing enterprises. After the visiting, some of the Chinese entrepreneurs were a little bit disappointed. They said: those machines are not as advanced as ours. Our products will definitely better than theirs. Therefore, they can send the orders to China. Our Chinese enterprises can arrange the production. After a discussion, the Chinese entrepreneurs found out that things are not as easy as they imagined. Although the Chinese enterprises have the manufacturing capacity, they are weak in R&D and brand effect. They also lack the quality control system and after-sales service. These are what Chinese enterprises need to make improvements. This kind of development can also be beneficial to creating a better market environment. The overseas M&A can be helpful to remove the weakness of Chinese manufacturing industry. This kind of weakness does not only exist in China, but also in the whole world.
During the process of overseas M&A, plenty of Chinese enterprises are willing to chase short-term financial returns rather than the sustainable development of the enterprises. German enterprises are good examples. German enterprises seldom use price leverage. They seldom prioritize the short-term financial returns but to focus on the sustainable development of the enterprises. From the end of the 19th century, the whole world admires the export of the German manufacturing industry. Entrepreneurs should be patient, neither extreme nor impetuous. “Some of the opportunity to make money should be given up.”
A client of mine has been cooperated with the Chinese company for three years. Once, they sent a technical team to the Chinese factory to check the product quality. During the inspection, they found that the products are of poor quality. The German entrepreneur considered that the quality of the products should be improved before entering into the market. The Chinese entrepreneur held an opposite opinion. He said that although our products here are not as good as that produced in Germany, our products are the best in China. Besides, my products have the largest Chinese market share. If the quality were improved, the cost would be improved at the same time. The profit will not be increased. Therefore, I should not improve the products quality. Then the German entrepreneur said: under this circumstance, you cannot use my brand any more. At last, Chinese entrepreneur took the German share and the German entrepreneur took three times good. The German entrepreneur took the money and left China in frustration. Here is an unavoidable question: the quality of the products or the financial profit, which one should be chosen. Chinese entrepreneurs would more likely to choose the latter.
In order to pursue the financial profit, the private equity (PE) has been introduced into exists in China. I heard the statement “PE is becoming more like venture investment (VC), the VC is in the process of bubblization.” Chinese enterprises must make the right choice between the products and the financial profit.
Now we are facing a more important issue, the narrow-minded psychology. Some Chinese entrepreneurs consider that the transnational corporations after the M&A should be Chinese enterprises. In their opinion, these enterprises should serve the interest of Chinese entrepreneurs. They also think that Chinese should be the leaders of the transnational corporations. The fact might not be like this. In the context of globalization, the transnational corporations are not Chinese enterprises, German enterprises or American enterprises. Almost all the transnational corporations are developing their agencies in different countries. Almost all the transnational corporations have shareholders, executives and staffs from every country and culture. I call transnational corporations as “community of interests”. Chinese entrepreneurs should consider the whole world as their interest holder. Transnational corporations rely on global resources. Meanwhile, transnational corporations are not only serving the personal interest of entrepreneurs but also creating social value.
When Chinese enterprises become transnational corporations, their sense of social responsibility will be globalized. There is a distribution in the global market. For the next 20 years, it is impossible for the Chinese enterprises to catch up with and surpass the European and American. But it is fine. The core of the overseas M&A is the globalization of capital and creative ability. We can imagine that China as the largest manufacturing industry base will not be shaken in 10 to 20 years. We can learn from the European and American to accelerate innovation. More and more Chinese enterprises will participate in the world manufacturing industry through overseas M&A.
Now the essence of the process of the globalization of Chinese high-end manufacturing is joining in the world market through M&A. There are cultural differences between China and western world. We need more and more Chinese with the western background as the bridges of communication. Hope they can introduce more and more Chinese entrepreneurs turn out to the world and invite more and more manufacturer into China.
Geplaatst: 2nd March 2015
What are the challenges Chinese enterprises will face during the overseas Investments and M&A—German Magazine “Unternehmeredition” interviewed Yufang Guo, president of Jomec International
In March 2015, President of Jomec and Managing Partner of Clairfield International (China), Mr. Yufang Guo was invited to an interview with the famous German magazine ‘Entrepreneur (Unternehmeredition)’ regarding a series of topics related to the Chinese entrepreneur’s activity in overseas investment and M&A. The magazine ‘Entrepreneur’ is one of the most successful, influential and professional news platforms for small and middle enterprises in Germany. Its topics are mainly covering corporate finance, M&A and international expansion.
Mr. Yufang Guo has nearly 30 years of experience in China-Europe cross-border M&A, and insights towards the reasons behind the failures of various cross-border M&A cases. During the interview, he puts forward several opinions on the problems encountered by the Chinese entrepreneurs during the cross-border M&A, and furthermore his suggestions and expectations on China’s overseas M&A. He considers that the Chinese entrepreneurs are blind during the outbound investment. On the other hand either the foreign or Chinese advisor who serves the Chinese entrepreneur always fails to achieve its proper role mainly due to the business culture difference. Along with the deepening of China-EU trade and technical communication, the comprehensive strategic cooperation between Chinese and European enterprises shall be realized on a large scale, at this point only the team of advisors who can really play the role as a bridge in between are able to assist the Chinese enterprises to achieve successful M&A deals, and realize the maximum enterprise value during the post-merger integration.
The content of this interview has been published in the March 2015 issue of ‘Entrepreneur (Unternehmeredition)’
Click for online reading (in German):
Geplaatst: 27th October 2014
Jomec Signs Strategic Cooperation Agreement with Yangpu Technology Business Incubator
Jomec, as the exclusive managing partner of China business of Clairfield International, represented Clairfield International and signed the strategic cooperation agreement with Yangpu Technology Business Incubator (hereinafter referred to as “Yangpu”) in Shanghai on 27 October 2014. The Chairman of Jomec, Mr. Yufang Guo and the General Manager of Yangpu, Mr. Jihua Xie, on behalf of the two sides attended the signing ceremony, under the witness of Mrs. Lilianne Ploumen, the Dutch Minister for Foreign Trade and Development Cooperation.
Shanghai Yangpu Technology Business Incubator, founded in 1997, is a National High-Tech Innovation Service Center, SME Public Service Platform, honored as Shanghai technical innovation enterprise, Shanghai Civilized Unit. As one of the leading business incubator in China, Yangpu has a unique channel for enterprises’ long-term development. In order for enterprises to survive, Yangpu provides a series of services for the entrepreneur, including entrepreneurship mentor advising, market expanding service, financing service, human resources service, project declaration service, professional academy assistance, and promoting enterprise in global scope so on so forth. In addition, Yangpu often participates in innovative competitive to encourage entrepreneurs.
Through the signing of the strategic cooperation agreement, Clairfield International and Yangpu have become important business partners, and the joint force is going to conduct cooperation in the international technology incubation, M&A and broader areas. Both parties will share clients and information, and enter into the collaboration in the specific fields including cross-border technology transfer and M&A, M&A financing, overseas IPO, interim management, international assets/equity trading platform, financial services training, etc.
Geplaatst: 10th October 2014
Jomec holds the global M&A forum and series of events at CIFIT
Jomec, as the exclusive partner of China business of Clairfield International, together with its international partners from across Europe and Australia, took a starring role at the China International Fair for Investment and Trade (CIFIT), China’s largest investment fair. The fair took place in Xiamen on September 8th-10th and during those three days, Clairfield was the protagonist of several events.
Clairfield events included an M&A forum, participation in country panels, investor matchmaking, a seminar, and a reception, in addition to a permanent booth. With over 60,000 attendees including corporations, government representatives, and investors, and a theme of “going global”, CIFIT was the ideal launching pad for Clairfield partners to connect with cash-rich Chinese companies that are interested in investing in Europe and elsewhere.
Mr. Guo, Chairman of Jomec and managing partner of Clairfield China, believes that China is at a watershed moment. “At this moment in history, China’s economy is becoming globalized while the global economy is becoming focused on China,” says Mr. Guo.“ The current strategic task of Chinese companies is to acquire essential technologies and internationalize their brand names as well as lift their management to a world level through M&A.”
After the conference in Xiamen, Clairfield delegation went on the road to Shanghai for meetings with business and government leaders. Clairfield hosted a symposium with high-ranking executives of funds, industrial corporations, and investment banks. The Clairfield delegation visited Shanghai’s Chamber of International Commerce and met with several of its member companies. Clairfield also visited Great Wall Asset Management, one of the largest state-owned financial institutions in China. Clairfield was recently selected as an exclusive partner of Great Wall to promote Chinese outbound investment and M&A.
Please Click to view or download the full Clairfield Review for the China Trip
Geplaatst: 29th May 2014
The Strategy and Operations of Global Technology M&A – President Yufang Guo was invited to give a speech during the seminar in Daqing
29th May 2014, President of Jomec and Managing Partner of Clairfield International (China), Mr. Yufang Guo was invited to attend the seminar in Daqing and gave a thematic speech. Yufang Guo was the only foreign guest invited by Daqing to speak at their seminar, with local think tanks to discuss the city’s development strategy, in which globalization is a key theme. His speech topic is “The Strategy and Operations of Global Technology M&A”.
It is pointed in the speech by Yufang Guo that, in the past thirty years, China is taking a bigger role in the international market evidently. At present, on the one hand, products made in China have been found everywhere; on the other hand, China has the world’s largest foreign currency reserve nowadays. To European countries, there have been great changes in the image of China, and it has also resulted in a new international market structure. By analyzing the whole world market, we think that the world economy consists of two aspects: the first is the globalization of China economy, and the second is the sinicization of global economy. Any multinational companies who want to keep the market position, it is not possible for them to ignore the China market. At the same time, all multinational companies and companies from western countries who want to keep the market position must aim at China markets. In this sense, Yufang Guo proposed several suggestions during the speech, for China, Chinese companies as well as Chinese institutions such as regional high-tech zones regarding the actions they can take for this economic trend.