JEAN-FRANÇOIS TREMBLAY, C&EN HONG KONG

French flocculants manufacturer SNF Floerger is becoming more active in China. Proceeding progressively, it has invested $100 million in China, which is the only country in Asia where SNF manufactures.

Gerard Mouchiroud, general manager of SNF China Flocculants, has been with SNF in China for 10 years. He explains that SNF had been exporting French-made flocculants for several years when it won a tender in 1992 to build a turnkey petroleum recovery plant for the Daqing refinery in northeast China.

Along with water treatment, petroleum recovery is a major application for flocculants. Mouchiroud came to China to build that project, which involved technology licensing and knowledge transfer. It includes what remains China's largest flocculant plant.

Soon after the Daqing project was completed, SNF set up a sales joint venture in Beijing in which it had a 93% stake. "We quickly realized that there was indeed a market in China," Mouchiroud says. Just one year later, in 1997, SNF had opened two more offices, in Guangzhou and Shanghai, to provide sales and technical support. The board of SNF believed that the company should supplement its French and U.S. factories with facilities in Asia and in 1998 decided that China was the right location.

In 1999, Mouchiroud set up a production venture, 100%-owned by SNF, in Taixing, a two-and-a-half-hour drive from Shanghai in Jiangsu province. The company used half the land it secured at the Taixing industrial park to build a $33 million plant making powdered water treatment and petroleum recovery flocculants. The plant had just opened when SNF decided to build a second production line, and that will become operational within a few months. The firm's total investment will then reach $100 million.

SNF's sales in China--about $58 million annually today--double every year, Mouchiroud says. Petroleum recovery is still an important market for SNF, representing nearly 22% of its Chinese sales.

Of the rest, one-third goes to local government agencies and water treatment utilities producing drinking water. The other two-thirds serves the effluent treatment needs of industries such as textiles, agriculture, mining, and aluminum processing. Slightly more than half of sales is from products made in France or the U.S.

Mouchiroud is constantly traveling throughout China, hiring people, managing construction of the plant, and meeting with government officials and key customers. He also assumes the important role of mentor to young French managers that the company sends over.

What he has learned the hard way during his decade spent in China is that "here, nothing can be taken for granted. We sign a contract today, everything can change tomorrow." Such an environment can be confusing for newcomers. "The young people who start up with us in China often have difficulties; they get taken in a bit by this aspect," Mouchiroud says.

But in a market as rewarding as China is for SNF, it pays to spend the effort learning to do things differently.

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Copyright © 2002 American Chemical Society