Endurance is worthwhile in South Korea

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Fibro has also been able to establish contacts via another channel. “Only by means of contacts with customers can we really assess the market,“ says Schäfer. Fibro obtained its market knowledge and contacts with customers only through its own subsidiary. “You should not believe that you can simply fly over from Europe and get everything you want during talks. Local employees simply find out a lot more,“ he explains.

Even if there is a considerable market for forming tools in South Korea – in 2016, the country was the world’s sixth largest car manufacturer, producing 4.23 million units – the start was not easy for Fibro. “The first two or three years were not disappointing, but really tough,“ Schäfer notes. However, for two years there has been a clear growth trend, and growth lies well above expectations. Besides, South Korea is an established market, and therefore no bed of roses. “There is a tough struggle right now, local competitors are not bad and are also coming to Europe,“ Schäfer adds. However, Fibro is ahead of the competition on the South Korean market in terms of quality, advice, good publicity and its worldwide network. There will always be a demand for a better quality of standard parts, and such a demand is particularly high from automotive manufacturers.

Meanwhile, five employees in South Korea have gained qualifications that put them on an equal footing with German colleagues. “We need all-rounders, but often only get specialists in a particular field of tool construction. The colleagues must then obtain their own experience,“ explains Schäfer. Communication in English works fine, it is now possible to find management personnel with language skills in South Korea.

In other spheres, too, Schäfer gives local employees the required manoeuvring space: The managing director must take strategic decisions on site in Germany, but he decides on daily business himself. Modern technology also overcomes the long distances in communication. “Once you have got going, it is no more difficult to control a South Korean subsidiary than a French one,“ says Schäfer.

A trustworthy decision-maker is needed on-site

He finds it important to have a local decision-maker whom one can trust, about whom one has a good feeling, and someone whom one has known for as long as possible. Fibro has known the managing director in South Korea for ten years because this contact existed before he began working for the standard parts manufacturer. An alternative is to send an expat to South Korea for two or three years so that he can establish a subsidiary.

Even if modern technology makes communication with the subsidiary easier, for Schäfer the Internet is no alternative to a presence in South Korea. “We wouldn’t earn a single euro in revenue with just an online shop,“ he notes. And adds that the customer should be able to telephone in case of problems, and preferably in the national language.

All in all, the Fibro segment director is optimistic about business in the far-eastern country. “We want to grow in double percentage figures in the coming years,“ is his minimum aim. Apart from that, there should soon be a local warehouse for frequently ordered products. In the medium term, Fibro wants to expand its service so that it can also handle more complex projects.

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