The average car consists of 10,000 parts, and individual molds are needed to manufacture many of these parts. WeiTec AG specializes in making these molds. CEO and founder Othmar Weibel spoke to us about business challenges in China and the new ideas he intends to implement with the support of Credit Suisse Entrepreneur Capital Ltd.
WeiTec is a mold manufacturer. Can you explain to us what that implies?
We are a supplier to the automotive industry. We work primarily for the three big German car manufacturers: Mercedes, BMW, and Audi. In general, every produced vehicle consist of precisely formed steel, aluminum, and plastic parts. We are responsible for making molds and tools to produce these parts. These can weigh up to 20 metric tons, and are produced in China.
Why in China?
First of all, the German automotive industry has a real need for affordable production without compromising quality; I realized this a good ten years ago when I founded WeiTec. Secondly, BMW, Mercedes, and Audi are foreseeing continued growth in China, and thus have a need for molds that meet German standards for their Chinese factories.
So is WeiTec a Swiss or a Chinese company?
We are a Swiss company with a Chinese subsidiary. At the moment, we have 18 people working in China and six in Switzerland. European clients receive advice and are serviced exclusively out of Switzerland; generally, they don’t deal with China at all.
How do you ensure the quality required?
In Switzerland, we focus on project planning, scheduling, and cost control. Manufacturing takes place in China. Not by us, but by Chinese mold makers with whom we work very closely. One of our Chinese engineers is in charge of each project. This individual instructs the mold maker and supervises execution very closely by two or three times a week.
How did you get your bearings in China, especially at the beginning? Wasn’t it difficult?
Yes, the first five years were challenging and often frustrating. We lost a great deal of time, energy, and money, and I made the typical mistakes that one can easily make in a totally unfamiliar culture.
What kind of mistakes?
I signed very large contracts with Chinese companies – and was never paid. There are thousands of opportunities in China. You are confronted with a lot of projects – there’s a huge risk of spreading yourself too thinly or getting involved with potentially wrong people as you think you understand the Chinese mindset.
So it’s mainly the difference in mentality that poses difficulties?
The culture is completely different and I guess I’ll never understand the Chinese mindset in this lifetime. But I’ve learnt to work in China and to appreciate its many advantages.
Hard work and high energy are typical in China: They work around the clock if they have to. If you give the Chinese the right information, and instruct them properly, you can achieve the unthinkable: very good quality, in a short time and for a great price. But, you have to communicate carefully.
Obviously, the methods of communication in China are different from ours. How do you deal with that?
I had to learn that the average Chinese worker feels most comfortable when you give him precise instructions. It’s however difficult in a situation where I’d like to try something new and I say: “Go for it!” As the average Chinese worker isn’t used to taking on responsibility, as creativity always provoke risk. Unlike us, they are not familiar to offset this with good project management.
So you’re a real mentor in China?
Yes, unfortunately there’s a huge gap between bosses and employees. For example, it takes years for an employee to get comfortable to sharing even the slightest bit of doubt with his boss about a work method or a product. I would love to get that kind of feedback! But we found a way to harmonize the Swiss and Chinese cultures. It’s important that we give our Chinese employees responsibility.
We’ve been talking a lot about the beginnings of WeiTec in China. Where do you stand at the moment?
We’ve made a name for ourselves in mold-making in the ten years since we started out. Automotive manufacturers increasingly want us to move toward complete systems, so that in the future we can deliver not only individual molds, but the entire system with the presses and our molds. Thanks to our employees and connections in China, all the prerequisites are already in place. The problem so far has been a lack of financial resources, but with the support of Credit Suisse Entrepreneur Capital Ltd., we are positive to blaze a new trail.
How did you come to know about Credit Suisse Entrepreneur Capital Ltd.?
The first contact was through WeiTec’s CFO, who’s in charge of the financial side of our growth strategy. A lot has happened since April 2014, when we started working with the Credit Suisse Entrepreneur Capital Ltd. team. I’m amazed at their professionalism. What we do isn’t very typical for Switzerland, but the people at Credit Suisse Entrepreneur Capital Ltd. quickly got to know our business, learnt about the specifics of car production, what the automotive industry expects, and where the potential for growth lies. We were very quickly at eye level.
What is the exact nature of your cooperation with Credit Suisse Entrepreneur Capital Ltd.?
Credit Suisse Entrepreneur Capital Ltd. acts as a partner that supports us to institutionalize our business but also to challenge the status quo. The danger for an engineer is of course to focus too much on technically interesting tasks, and too little on profitability. That being said, we don’t only receive strategic support, but also a customized financing solution, which is critical for implementing our growth strategy. Credit Suisse Entrepreneur Capital Ltd. has understood the potential of our business and agrees that our potential will expand if we further develop our existing activities to include other areas in the value chain.
Has Credit Suisse Entrepreneur Capital Ltd. imposed any additional conditions on you in exchange?
Due to the company dynamic growth, it’s crucial that we reduce our dependency on individual people – this is an area where Credit Suisse Entrepreneur Capital Ltd. Continues to press for progress, and rightly so. Another area is succession management: Here, too, I’m glad that I can start this process with the help of an experienced partner, even if I’ve lost certain “freedoms” due to the fact that our organization has been “institutionalized” to a certain level and some Corporate Governance rules have been introduced. Nevertheless, I think these aspects are part of proper and essential guidelines for longterm, fruitful succession planning. Ultimately, Credit Suisse Entrepreneur Capital Ltd. is a partner that helps us to evolve, and not just in tiny steps. We can now afford to take giant leaps forward.