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AOK turns crisis into opportunity

By Ou Lu (China Daily)
Updated: 2009-03-20 07:54

The financial crisis has left a trail of destruction in its wake, but also opened up new vistas for many entrepreneurs like He Daqing, the general manager and founder of Beyond AOK Electric Company.

Related readings:  Old electric appliances threaten environment  GE anticipates double-digit growth for transportation unit  China's labor contract law helps combat crisis

The eight-year-old company in Wuxi in East China' Jiangsu province manufactures electric heaters and has recently made significant strides in the global marketplace.

AOK is the only company that makes electric heater systems for oil refining projects and is the only such firm in China which matches up to international, EU and US certification standards.

"Without the financial crisis, our company would not have been noticed by the biggies like General Electric (GE), with whom we signed a contract last year", He told China Daily yesterday on the sidelines of the China International Petroleum & Petrochemical Technology and Equipment Exhibition in Beijing.

The current downturn has forced global firms to cut costs and search for cheaper components in countries with cheaper labor, like China. In He's case, his electric heater is 66 percent cheaper than those produced by foreign competitors.

Before getting orders from GE, He's company survived by catering to a tiny share of the orders from China's two biggest oil producers and refiners, PetroChina and Sinopec.

"Last year, we signed contracts worth 20 million yuan with GE and I'm confident our contract will be bigger this year." According to the 50-year-old engineer-turned-entrepreneur, GE's purchasing contracts with Chinese suppliers surged ten times this year, compared to last year.

He said the gloomy economy had allowed foreign companies to know more about the 'Made-in-China' products.

"In most of the cases, the 'Made-in-China' products, especially hi-tech ones, are not just cheap, but also of excellent quality. Before the financial crisis, many foreign companies did not care to approach us and therefore did not know much about us," He said.

Apart from more revenues, the cooperation with foreign companies is also a chance to improve the production standards of Chinese producers.

The foreign companies have sophisticated quality control systems and refined technologies, and through more cooperation with them, Chinese companies will feel the need to upgrade to meet international requirements, he said.