Andre de Jong was born in the Netherlands and began his career with Bosch in 1997 as brand manager for the Bosch Power Tools Accessories division in Benelux. Before coming to Myanmar, he held branding, marketing, international management and leadership roles in Switzerland, Hong Kong, Vietnam and Germany.[paypal]
What was your first impression of the Myanmar market? How have you seen it change since Bosch has been here?
My first time visiting Myanmar was in 2009. My first impressions were: affordable hotel prices, smooth traffic, beautiful country, and nice people. The last two factors have remained the same, whereas the traffic, prices, and the country’s development have been changing significantly.
The country’s telecommunications and banking landscapes, for example the proliferation of credit cards, are just two of the many distinct changes over the last three years. The number of vehicles on the roads in Myanmar has also been increasing rapidly, which results in traffic congestion in almost every part Yangon. Thankfully, we can also see development in transport infrastructure such as new flyovers and road expansions. The Expansion of Yangon’s airport is another example, resulting from an influx of tourists and FDI as well as increasing overseas travels by the locals.
What made you decide to open an office in Myanmar and what was the biggest obstacle you faced?
In 2012, Bosch was one of the first European companies to open an office in Myanmar. We started the process as soon as the country opened up its economy and the EU sanctions were lifted. Bosch saw substantial market potential in Myanmar. The country presented a lot of business opportunities due to the country’s abundant natural resources for development of industries such as mining and oil and gas, large population, geo-strategic location within Southeast Asia with ease of access to sea and land transportation. The main challenges we faced when setting up the office were to find an office space. There was no purposely built office space.
How does Bosch develop technical skills and human resource capacity in Myanmar?
Training is a key to succeed in our local for local strategy. We train our associates both locally and overseas to ensure that they have the necessary knowledge and skills for their work. We also provide product training to our partners and distributors, and extend such training to the next tier distributors or sub-dealers.
What is the target market segment for Bosch in Myanmar?
Bosch is represented in Myanmar with all four of its business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. Products sold in the country include:
- Mobility Solutions: In Myanmar we provide automotive spare parts for passenger cars and off highway vehicles such as trucks and excavators that are used for big infrastructural projects or mining activities.
- Industrial Technology: we supply spare parts and components to drive and control machinery. Some of those parts and components are hydraulic drives, hydraulic parts such as pumps and valves for heavy equipment, and equipment for hydropower dams and factory automation.
- Energy and Building Technology: We provide security systems such as fire alarm, intrusion-prevention systems, access controls, surveillance cameras, conferencing systems, and professional audio systems. We also supply water boiler systems for the production of hot water or steam, for industrial or hospitality applications.
- Consumer Goods: we are in the business of selling power tools and home appliances.
Do you see the upcoming foreign investment laws changing your operations? How so?
Our current challenge is that as a foreign entity we are not allowed to do direct import and distribution activities in Myanmar. Thus, we hope to see reform to this matter.
If Bosch is allowed to import our own goods, we will be able to provide extra services and benefits to our customers. For example, we will keep the stock ourselves and make it available locally. This means the distributors can reduce their order value and lower their stock level which will lead to lower cost of operations while increasing accessibility, flexibility and speed. When we are doing the direct import, we are also taking away currency risk which is one of the main concern of our customers.
Do you see the manufacturing sector becoming more competitive as the country opens up to more foreign companies?
As Myanmar continues to receive a high inflow of manufacturers, the level of competition is also getting higher. Competition is, however, healthy for the industry and end-users. Each player will then need to be more creative and cost effective in their product development while delivering better solutions and higher quality products at competitive price to their customers.
What are Bosch’s business lines that are represented in Myanmar? Do you see an expansion of your other lines into the country?
Bosch has a broad product portfolio as described earlier. We continuously assess market demand and potential tofurther expand our product offerings when and where they needed. For example, Bosch introduced a new range of power tools last year called the ‘Contractor’s Choice’ which is a redesigned range based on local market requirement. We also increased our range of off-highway vehicle spare parts to support the country’s strong development in construction, industrial, and mining sectors.
What has been your most successful product or business line in Myanmar?
We have been very successful with our automotive aftermarket product range, both for passenger cars and off-highway vehicles. Our power tools division started out slow, but started to pick up very fast last year. This was partly due to the increased amount of training that we provided to our distributors and sub-dealers, as well as increasing our brand awareness throughout the country.
Could you please explain more about German Myanmar Business Center.
If you are referring to German Myanmar Business Chamber (GMBC), it was started by the German business community in order to provide opportunities for networking and advocacy. The GMBC also organizes events and training on topics such as tax and human resources. The goal of these activities is to provide a platform to share and exchange knowledge and ideas. It is also important to have a strong local German Chapter as part of the newly-founded EuroCham Myanmar, where European businesses or Myanmar companies with strong ties to European businesses can become members.
From a business standpoint, what do you feel are the biggest challenges facing you and your team in Myanmar in next 1-3 years?
To be able to import and distribute products in Myanmar as mentioned earlier, if no reform, will be one of the biggest challenges for us.
The development of office space rent is also a concern. Office rental rates in Myanmar are high, and this has an impact on our operating costs. We observe that there are numerous commercial projects that are being developed in Myanmar, and we are optimistic that as the supply of office space is increased, the rental rates will fall.
Hiring and retaining talent is anotherchallenge. The job market is volatile in Myanmar where many people change from one job to another within short period of time.
If you could change one major government policy, what would it be?
I would repeat the same point which is to see reform in the import and distribution right for foreign companies.
If I would be allowed to state a second one, I would also like to see improvements in automotive regulations. Among those, the government should make it compulsory for all cars to have safety systems such as the Anti-lock Braking System (ABS) or Electronic Stability Program (ESP). These vehicle safety systems could save many lives on the roads. According to the National Road Safety Council (NRSC) of Myanmar, the number of road fatalities in Myanmar at a high rate of 4,420 in 2015, which is equivalent to 12 death per day. The number of accidents could be reduced if all cars had ABS and ESP installed.
MI: What are the current projects that your team has been working?
ADJ: We continue to enhance our distribution network together with our partners. We are also continuously developing our range of product offerings to suit the dynamic market demands. In addition, we are currently rolling out a campaign to showcase Bosch’s diverse product offering and how our products help improve the quality of life of the people around us.
What advice would you give to someone who is looking up to start up a business and invest in Myanmar’s mobility solution?
It depends on what kind of business we are referring to here. It’s important to assess the market requirement carefully. Automotive landscape in Myanmar is complex due to variety from new to very old vehicles.
Bosch is happy to meet and discuss with investors in mobility solution or automotive manufacturers who are interested in starting their operations in Myanmar.[/paypal]