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I spent a few minutes with Ventec’s Jason Chung whilst attending CPCA recently, where I had the opportunity to absorb his views on the current China market, the importance of setting yourself apart in a tight economy, and the value of bringing stability to customers.
Pete Starkey: Jason, tell us a little about the China market currently and how things have been going for you.
Jason Chung: First of all, I do think this year is quite difficult because of the economic situation. We did not see any bounce-back or any signals that we will recover this year, at least in the first half.
Starkey: Do you see this as a geographical or a worldwide thing?
Chung: A worldwide thing, and the China situation is worse. Everybody has to find their strengths, and develop something different.
Starkey: I can see the need to differentiate yourself in order to make progress in the market. I know that Ventec is a very independent company. You're not as reliant on outside suppliers as a lot of other companies in the market. You have control of your own resin chemistry, which gives you a big advantage.
Chung: The Asian point of view is quite different from the one you would have heard when you interviewed Mark Goodwin or Martin Cotton. Here, everybody is focusing on mass production—they make things at lowest cost and just want to sell more and more, so they focus on turnover rate. At Ventec, we don’t do it that way. We want to use our strengths to develop our own business. We have our independence and the capability of developing new materials for the customers’ future needs. Also, we have global logistics strength. We have our own organization overseas, and we have the technical support. We have hired very capable people to work with us to develop the OEM business.
We also can offer a full range of products to satisfy our customers if they want one-stop buying. So that's our difference. Also, we always say that the most important part of the enterprise is our people. Here, our manager-level people have all been with us for more than 10–15 years. So that's what we’re made of. We have a very different position than our Asian competitors. We look at long term, not just short term development.
Starkey: It's certainly apparent from the outside world that you are a very stable company; you're a family of people, but you're an integrated family of people. Not just in product development or manufacturing but in, as you say, the worldwide distribution network, the worldwide support network. I think this is a point that comes over very clearly from the outside: that Ventec has got an integrated supply chain, and it's got ownership of that supply chain all the way through from you sourcing your raw materials right through to the end user.
That gives an awful lot of security and an awful lot of confidence I think to the end user. But the end user doesn't necessarily have the choice of what material he uses, because the PCB fabricator is just the guy that works to someone else's design and someone else's specification. As you say, you've developed all of these OEM relationships, because it's the OEM that is the design authority and the OEM that specifies the material. With the structure of your company, the high-level contact that you have with the OEM engineering and design guys, really that is what feeds back to your development guys as to what is the next generation of requirement.
Chung: Yes it does. The world has just become one; it’s not like before. It's not like we say, "in this territory, we are the king." Now it's globalized, so everyone has to come to the battlefield with competitors from all over the world. We've got to have different strengths for different territories. For example, in Asia, we know how to make mass production, and to have cost reduction or cost savings for the customers. But in other areas or other territories, we've got to have the strengths to develop new materials for the customer, and you’ve got to know the end products and the trends. They need reliability, and they need different kinds of test. They want to change the world to be lighter and smaller. So then how do you maintain reliability? It's not just a resin development, it's also a process development.
You've got to understand their perspectives, and then you can know how to resolve their problems. It's complicated, so we must have experience in the technology capability in order to resolve all the difficulties. So that's the real world. It's more complicated. That's why I want to say we really believe that we have very good networking, because we are a globalized company. We have all kinds of strengths, which make us very confident that we stand in a very special position compared to our competitors.
Starkey: It must be true that because you are global, as you say, lessons that you learn in one geographical area, one market sector, can give you information that you can use to satisfy the requirements of other market sectors. Even if those requirements are not the same.
Do you find there’s much variation across your world market in terms of which sort of products fit into which sort of market areas?
Chung: Yes, it's complicated. We saw the variations and we also see different applications. They have the same requirements, like reliability and stable products or properties. So you've got to have your strengths in common. Then your customers know that Ventec can provide all kinds of materials, all high reliability, and that our properties are very stable. So that's what we want to make. I think currently we are successful in that; we just want to build our image into the market.
Starkey: I think that image is established. As you say, regardless what the product or product specification is, one thing is not negotiable, and that is that you will always supply a high-quality, consistent, high-integrity product.
Anything else that we should discuss? I know how busy you are, and I appreciate that you've taken time that you can ill afford.
Chung: I think this year has been difficult, so I just want to say good luck to everyone, even competitors, and all the customers. I hope that the economic situation sees a turn-around in this cycle.
Starkey: I think that the forecast is that we will see the bottoming out mid-2016, and then by the turn of the year, 2016–2017, the growth will start to be positive again. We're in an industry that is subject to cycles that are dependent on all sorts of different factors.
Thank you for your time. It was great to talk to you.
Chung: Thank you.