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There are other countries in Asia besides China and Pascal Delloue intends to promote them. He has many years of experience in the global marketplace and his new company, Kusu Corporation, is poised to introduce SE Asian companies and the electronics products they can provide for the rest of the world. I have to say this is an interview like no other I have ever conducted. Read on and you’ll see what I mean.
Dan Beaulieu: Pascal, it is always good to talk to you. First, tell us a little bit about yourself.
Pascal Delloue: I was born in Algeria where my dad was an engineer for a company that was building a pipeline between Hassi Messaoud and Bejaia on the Mediterranean Sea. I was raised in the south of France near Marseilles. I dropped out of college in 1980 and joined the Navy as a petty officer. I spent five years aboard a nuclear submarine with the specialty of sonar detection; this is where I learned electronics.
In 1985, my first job was with Sofranelec, a company located in the suburb of Paris that produced printed circuit boards. I had the opportunity to learn the technology from an old German engineer who had fought the Russians in Berlin in 1944 as a 16-year-old.
In 1989, I moved to Bulgaria near the border with Romania, on the other side of the Iron Curtain, to train local engineers to meet the standards of western countries (UK, Germany, France). I was in Bulgaria during the Romanian revolution and the execution of Ceausescu. Most of my colleagues fled the country overnight while I decided to stay with my family (I had two toddlers). I was promoted to team manager while my boss replaced the French engineers with British.
In 1991, I moved to the border between France and Germany to work as the head of manufacturing for a flexible printed circuit company (GIM). I spent seven years with this company and relocated some of their technology to Czech Republic.
In 1998, I moved to the U.S. to work for Parlex in Methuen, Massachusetts with the responsibility to grow their business in Europe and Canada. Two years later I was promoted to manager of the R2R advanced material. I relocated some operations to Mexico and later to Shanghai, China.
In 2006, I became VP of the Telecom Division and travelled extensively in Northern Europe and Asia. This was followed by positions with Pica Manufacturing and Central Midori International, where I was the general manager, and we moved the company to the first Singapore Medical Industrial Hub in 2018. By 2019, I moved back to the United States and stared Kusu.
Beaulieu: Tell me about the name; what does Kusu stand for?
Delloue: Kusu is a tiny little island located south of Singapore where I used to outrigger canoe with The American Dragons of Singapore. There is a temple on the island dedicated to the Chinese god of prosperity.
Beaulieu: Would you tell me about the history of the company? It’s important to visit how you got here.
Delloue: I started the company at the end of 2019 after receiving countless requests about finding reliable manufacturers outside of China. Our mission is to match U.S. businesses that seek to diversify their supply chain away from China to other SE Asian companies with a strategy to grow their business in North America.
Our strengths include our knowledge of the business ecosystem, our local presence, and our proficiency of the native languages.
Beaulieu: Why SE Asia?
Delloue: I wanted to offer an alternative to China. I sensed, even before the tariffs, that people were turning away from China. I knew that the rest of SE Asia could provide us with alternatives. Singapore has an FTA (fair trade agreement) with the U.S. There is plenty of good labor and commerce in Vietnam, Malaysia, Indonesia, Thailand, and some of the other countries. The cost of living of these countries is stable while China’s is rapidly increasing; of course, China lacks the basic rules of protecting IP (intellectual property). Then there are the pressures that China is exerting over the rest of the world, as well as geopolitical tensions in and around China—Hong Kong protests, China claims over the South China Sea, China’s war on the Uyghurs, China-Taiwan tensions, China-India border dispute.
Beaulieu: Pardon my typical American ignorance of geography, but please tell me which countries make up SE Asia.
Delloue: The best countries to do business with right now are Singapore, Malaysia, and Vietnam. The up-and-coming companies are Thailand, Indonesia, and the Philippines.
Beaulieu: I assume you are working with some companies in these countries right now?
Delloue: Yes, I am currently working with Central Midori Int’l: membrane switch/printed electronics; Giken Sakata: plastic and electronic contract manufacturing, precision machining; MFS: flexible and rigid PCBs; Watson EP: plastic contract manufacturing and metallization; Shine Precision: precision machining; Racer Technology: plastic and electronic contract manufacturing; and Honsen Printing: labels and RFID.
Beaulieu: Why do you feel North America is ready for this?
Delloue: There is a new generation of buyers and engineers, younger and online, who are demanding the same effortless buying experience as B2C customers. They don’t have the same level of interest in traveling for their company and therefore in recent years, the trend toward outsourcing the supply chain to specialists has been increased rapidly. Kusu is offering a post-COVID sales and marketing process including a B2B eCommerce platform to allow U.S. customers to buy customized manufacturing services in Singapore and SE Asia when and where they wish with as few clicks or other steps as possible.
Beaulieu: What do you do? What services do your company offer?
Delloue: We can offer these companies access to North America, everything from “boots on the ground” presence in North America where we do customer calls and visits. We help to penetrate new market/new territories with limited initial risks. We offer market positioning by developing a sales plan that includes marketing campaigns, and introducing them to media outlets for advertising like I-Connect007. And of course, we help with logistics like shipping, collections, and so on.
Beaulieu: And I assume you service their customers as well, right?
Delloue: Yes, we provide them with an easy portal to these companies in these countries including:
- eCommerce platform with a broad portfolio of reputable SG manufacturers with representative contracts
- Production in Singapore and/or Southeast Asia
- Evaluation and pre-qualification
- Wide range of capabilities
- Relationship with top management
- Local technical support
Beaulieu: How is Kusu different than other such companies?
Delloue: Kusu offers customized manufacturing, and it is a different story. The process of manufacturing is initiated by the customer and whatever information they provide. Commodity buyers have benefited greatly from digitization and online platforms. Buying standardized products is often a race to the cheapest price.
Instead, the purchase of customized products is a long consultative process that involves a deep understanding of customer expectations (either expressed or implied). When engaging with a customer for the first time the bigger challenge resides in what is not said.
The production cycle is naturally longer than for manufacturing standardized products, as new product development can take up to three years and customers expect full transparency from their suppliers along the way. Requirements range from material testing, process qualification, full traceability, and sharing of all types of production records. Customers even send their own engineers to manufacturing sites to perform audits and make sure that the products are made to their standards.
The manufacturing of customized products is characterized by high unpredictability about what the customer really wants and what is truly important. These uncertainties have a dramatic impact on the manufacturing process, the production lead time, and the costs involved.
In customized manufacturing the producer is responsible to fulfill the requirements of its customer with dire consequences if not successful. It requires constant communication between the manufacturer and the customer.
Our technologies include:
- Design and engineering
- Electronic manufacturing
- Plastic contract manufacturing
- Precision machining
Beaulieu: Would you please outline your general high-tech capabilities, especially the high tech and special technologies?
Delloue: Yes, it includes:
- Industrial design and 3D prototype
- Injection tooling design and fabrication (soft tooling, hard tooling)
- PCBs: 90µm line and space resolution, heavy Cu (10oz), 32 layers, via-in-pad technology
- FPCs: 25µm line and space, 12.5µm base material, 50 µm minimal lasered hole diameter, flying leads
- Plastic metallization, decorative and EMI shielding, matte and bright chrome finishing
Beaulieu: Do you feel your principals are equal to or better than China or the western worlds?
Delloue: What is striking when you visit companies in SE Asia is the diversity of culture, language, religion, and we see it as an asset for companies operating in the region. One advantage has to do with creativity. Provided mechanisms are in place that allow for proper discussions, a more inclusive workforce, and especially more diverse management teams can offer new, more out-of-the-box solutions to problems.
Beaulieu: Kusu is basically a brokering company. What makes you stand out?
Delloue: We call it “responsible sourcing” and it is a commitment by Kusu to consider social and environmental considerations when managing our relationships with suppliers. Responsible sourcing essentially comprises three key aspects—a respect for people, a respect for the environment, and an adherence to ethical practices.
After spending five years in Singapore, I know how to build trusting partnership with my suppliers. As the adage goes, “It is better to deal with God than with his saints.” All too often I have observed U.S. company representatives, when visiting their suppliers in Asia, meet with bright engineers who can converse proficiently in English but seldom with the actual decision makers. Personal relationships matter and I am personally connected with the right person within my manufacturing partners. At Kusu, we pride ourselves on having a solid grasp of our partner organization and our role is to guide our clients through complex organizational charts. It is saving our clients time and money.
In a globalized world we tend to assume that the world has become so flat that there are no differences in business manners between countries. That’s wrong and Kusu is here to help our clients navigate through a different business landscape than what they are used to.
Beaulieu: Why should people by from you?
Delloue: Many of our customers are too busy creating value for their own customers that they are better off relying on experts like Kusu to manage their supply chain.
Beaulieu: What types of companies as customers are you best suited to work for?
Delloue: In normal circumstances medium size companies without the bandwidth, expertise, and budget to manage a global supply chain turn to Kusu for assistance but with the COVID pandemic, even larger companies are considering our services.
Beaulieu: Tell me about starting up; this must have been a challenging proposition.
Delloue: While visiting a potential customer in the Midwest, I was faced with fierce resistance from a group of engineers who were vehemently disputing the need to use Kusu until the buyer stood up. She literally compared what she was planning to do with Kusu to Apple’s strategy to outsource manufacturing. “We should focus on what we do best to add value to your customers, recognize activities which are not core, and outsource them,” she said. This buyer turned out to be my best advocate.
At a different meeting I was showing some pictures of our manufacturing partners’ plants, when the buyer stopped me and left the room. After five minutes he came back accompanied by six of his engineers to whom he wanted to show the pictures. SE Asia was highly influenced by Japan in the ‘80s and plants look very different from what we are used to in the U.S. They are not highly automated like in Germany but rather clean, well-organized, low inventory, visual management—a place where common sense and employee engagement prevail.
The most important challenge is the unfamiliarity of Americans with SE Asia. Many put Singapore somewhere in China—they have no idea that Indonesia has a population of 270 million (almost the size of the U.S.) or that Malaysia is divided into two large regions including one on the island of Borneo.
Beaulieu: What are your plans for the future? Where do you want to be in five years?
Delloue: Kusu was set up as a traditional “multi card sales rep” but our five-year strategy is different. In a post-COVID world we aim at becoming a digital platform to help supply chain professionals and engineers find new sources of supply outside of China. Our goal is also to automate the NPI/NPD processes to remove frictions, add safety and speed.
It was a time that you had to go to trade shows to find new suppliers. Today, you google it with all the risks that it includes, the future is to ePlatforms that connect companies together, it is the upwork model.
Beaulieu: How do you see the market today?
Delloue: Our market is made of sales reps, brokerage firms, supply chain consultants, sourcing specialists, online catalog (Thomasnet.com). It is very fragmented and often driven by long term relationships.
Beaulieu: What are the challenges for competing in that market?
Delloue: We ran a few email marketing campaigns with little success with the exception of people who knew me from previous business relationships who replied favorably. People are bombarded by unwanted marketing messages and catching their attention is a challenge.
Tooling cost is also a barrier to enter certain markets. Companies who invested in tooling are reluctant to change suppliers.
China subsidizes certain technologies and pricing can be hard to match.
But above all it goes down to trust. Word of mouth is the most powerful marketing technique when customers start telling each other about your services.
Beaulieu: Where do you see technology going in the future?
Delloue: Clearly digital. Building an ePlatform for customized manufacturing. Not a catalog for commodities (Amazon) but a tool to help buyers, engineers, and decisionmakers find manufacturers that they can trust.
Beaulieu: Now let’s talk about service. What do you consider good service?
Delloue: Above all, you must take the time to listen to your customers’ problems so you can provide the best solutions. Customer satisfaction is not a mere slogan; as Jeff Bezos says, “You have to be obsessed about customers.” You must stick to your word, “say what you do and do what you say.” Have transparency and authenticity, don’t hide, and be yourself.
Beaulieu: What do you think your customers are looking for when it comes to service?
Delloue: The best way to help a customer is to solve a problem. Customers expect a company like Kusu to listen and understand what they truly need and not try to prescribe the same medicine to everyone. Customers want to feel that they are unique.
Beaulieu: Pascal, thanks for talking to me about your new company. I really enjoyed getting your view of globalization and what you are doing. I’ll be watching anxiously to see how things turn out.
Delloue: It was my pleasure Dan.