Member Article

Joint venture opens China for County Durham firm

A joint venture agreement has opened the way to new business in China for a company with close links to County Durham.

Berger Group Europe, which includes Berger Closures, of Peterlee, has teamed up with a Shanghai-based corporate partner to launch the new venture – Berger Closing Rings, in Changshu, China.

Berger has 90 per cent equity in the new venture, which commissioned machines a few weeks ago and is managed by Berger’s Global Operations Director Richard Swart, who also manages the Peterlee factory.

Launched in 1988, Berger Closures, is a leading manufacturer of quality clamping rings and closures supplying drum manufacturers in a wide range of industries including chemicals, pharmaceuticals and nuclear waste companies.

Berger also has two locations in Germany, as well as France, Holland, Spain, Slovakia, Turkey and Italy as well as close links with others in America and South Africa. Further acquisitions should be announced shortly which should bring group turnover to more than £80 million.

Firmly established market leaders in the UK and Europe, Berger was keen to explore other markets, in particular China, and enlisted the support of UK Trade & Investment (UKTI) to take part in Market Visits to China and the expert advice available through UKTI’s China Programme.

Richard explained: “This project has taken just under three years of incredibly hard work, immense frustrations, challenges and risks to research the markets, competitors and suppliers. We then had to source all components locally with good quality, reliable and competitive suppliers, form the company and employ suitable people.

“Although a continuous learning curve, it has been extremely satisfying to see first sample products coming off the production line at long last.

“However, we are under no illusions. The road ahead is tough, full of risk and our journey in the Chinese market has just started. We are not in China for export to Europe, we are in China primarily for China and this, of course, means we must compete locally.

“We currently have staff from Peterlee in China training and supporting our new colleagues, one of whom spent time with us at the end of last year.

“We’ve worked closely with UKTI and in particular China Business Development Manager Dr Zhengming Yang, who has supplied a huge amount of insight into the Chinese culture. This has enabled us to better understand the Chinese psyche and how the Chinese like to do business.

“As a result of the background work we did, we decided it was best to set up a joint venture to establish a presence in China to cater for that market, rather than adopting the more usual export route.

“The new Berger Closing Rings business is now up and running in Changshu, about 80 miles north of Shanghai, and we have a team of eight staff working for us. Production and sales should be underway within the next three months and we hope to increase staff to 14 by the end of the year.”

Simon Crosby, one of UK Trade & Investment’s International Trade Advisers has worked with the company to develop its plans alongside specialist China support from Dr Yang. Simon said:

“The North East has proven time and again that it can compete on the world stage and Berger is a great example of this. We’re delighted to have been able to support the company in its global expansion and hope its success will encourage others to take up the export challenge.”

Dr Yang added: “China can be a complex market but the rewards are there for those who take the time to learn and understand how they like to do business. In this case a joint venture was considered the best option and it’s great to see that Berger is set to reap the rewards of its investment.”

This was posted in Bdaily's Members' News section by UKTI North East .