Trust, respect key to joint venture success

Editor's note: Welhope Agri-Tech Joint Stock Co Ltd, based in Shenyang, the capital of Liaoning province, was founded in 1995. As a privately owned corporation, it has grown from obscurity to become a well-known and influential feed enterprise in China and the global industry. The company has nearly 100 branches or subsidiaries with market presence in more than 25 provinces and cities throughout China.

In 2006, Welhope entered into a joint venture with Royal De Heus, an international feed group with 100 years of history based in the Netherlands. The cooperation significantly enhanced Welhope's technology and R&D strength.

Jacobus Co Johannes de Heus, chairman of Royal De Heus, shared his views on the cooperation with China Daily reporter Wu Yong.

What do you think about the cooperation between Royal De Heus and Welhope?

I think it is mostly based on common sense and mutual respect. Also the trust and common set of moral rules and ethics that we share together. I think that is the base for good cooperation.

How do you find common ground?

I think it is in the way we communicate. We have very open discussions, so we are not afraid to say what our own opinions are and they are also informed discussions done in a transparent way. So that is important. I think the company spends enough time informing us what is going on and also does financial reporting and that kind of thing every month.

Why didn't you go for one of the bigger companies in China to cooperate with?

We did not study all the players in the market. Well-hope found us and came to us. We visited and liked the company and its people so there was no need to search any further. This company is a good company with good management. They are nice shareholders.

Would you say the cooperation with Welhope was one your most successful investments?

Yes, it is true. The difference is that in many countries where we started small, the beginning was a little slow because we had to build the business ourselves. But in China, we started big. We took a small share in a big company, which has grown very fast and it continued. We can compare it to a train. In China, we jumped on a train that was already going at high-speed. In other cases we had to start pushing the train ourselves.

Are you going to expand the share in Welhope?

I think it would be very expensive and we are comfortable with the share we have now. In 2005, we made the right decision to be the minority shareholder and it is still the same today. It is better that the Chinese management takes responsibility to lead the company. I don't think a Western person could manage a Chinese company better than a Chinese person.

From your experience, what could you share with interested European investors and business people who want to do business in China?

First of all, if your partner cannot speak English very well I think you should stop. Because working with interpreters doesn't work. Secondly, I think you must have patience and invest time to build a relationship first, because when you encounter problems in the future business is not always easy and in every business difficulties have to be solved. The relationship can come under pressure because both parties are not happy. So you have to invest in a good relationship.

Thirdly, a mistake that some companies make is in holding the company. Sometimes you see people combine a joint venture. The joint venture is a separate entity. So European and Chinese companies are both holding companies. They want a joint venture together. It is better for the European company to take a minority share in the whole, than to have a majority share in part of the company.

(China Daily European Weekly 11/14/2014 page16)