The Flanders-China Chamber of Commerce and the EU-China Business Association, with the support of Flanders Investment and Trade, organized a webinar on “Experiences of investing in Weihai, Shandong province” on June 16, 2022.
Mr Gong Bengao, Director, Weihai Municipal Bureau of Commerce welcomed the participants to the webinar and introduced the speakers.
Mrs Yang Li, Vice Mayor of Weihai, welcomed the participants to the webinar in the name of the Weihai Municipal Government and thanked the friends from Belgium for supporting the development of Weihai. In 2012, Weihai established a representative office for Europe in Ghent and in 2013 Weihai and Ghent established friendly-city relations. Bekaert and the Beaulieu International Group have invested in Weihai. In 2021, Weihai had absorbed USD150 million in Belgian investment, or 60% of European investment in Weihai. The Flanders-China Chamber of Commerce is an old friend of Weihai and the leaders of Weihai have visited Belgium. Mrs Yang promised to improve the environment for foreign investors in Weihai.
Mr Kurt Vandeputte, Chairman, Flanders-China Chamber of Commerce: “Let me first start by thanking the Weihai government for the excellent support they give to our companies which have invested there and for their strong cooperation with our Chamber! Over the past 12 years, the Flanders-China Chamber of Commerce and the Weihai Foreign Investment Bureau have formed a strong bond to help build and then strengthen trade relations between both sides and to introduce each other's investment environments. The Chamber has received many delegations from the city and also organized several business delegations to Weihai. Due to the current China’s Covid-19 policy, we can however, not yet visit your beautiful city and meet with government leaders but I do hope that as from next year we can start again to travel to China and visit your charming city and of course we warmly welcome delegations from your side so that we can introduce business leaders from both sides to each other. As a result of the pandemic we still have to have virtual meetings but for business leaders doing business with China – we really need to meet face-to face. And when companies want to invest in China, they need to be able to visit the location and meet with local government leaders.
Why Weihai? Several of our member companies, such as Bekaert and Beaulieu, already have major investments in Weihai. The city, located in Shandong province, has a very business-friendly investment environment. It has established several pillar industries, including machinery, food, transportation equipment, textiles and garments, medicine and medical devices, electronics and new materials. The emerging industries of Weihai are medical & healthcare, information & outsourcing and “intelligent” manufacturing. Leading investors in Weihai, such as Bekaert and Beaulieu from Belgium, report that they are extremely satisfied with their dealings with the Weihai government. They say that Weihai government departments are responsive, there is a strong willingness to cooperate and the service is everything they could hope for. We will also hear this from our other testimonial today from the German company Marquardt, which also has a large investment in Weihai.
Like the best cities, Weihai offers five features recognized by the World Bank and the Ministry of Commerce as the fundamentals of a good international business environment. Excellent government services; a business-friendly environment; a highly skilled workforce linked to clusters of research and academic institutions; excellent infrastructure and transport; and a good living environment. Foreign businesses also need a fair, stable and transparent investment environment, including clarity about policies to feel secure about investing. Incentives such as available subsidies also need to be made clear to foreign investors at the outset. Another key requirement for foreign investors is that they have access to secure, stable and competitively priced energy supplies. These things are all available in Weihai. But what makes Weihai special is also its attractive living environment. It has a unique natural environment with 1000 sq km of seaside.
Personally, I have not been able to visit this city, but when I hear all that from our investors, I will certainly visit Weihai and I do hope, our Chamber can take along some interested business leaders next year! I would like to thank you once again and wish you a lot of success in attracting new investment into your beautiful city!”
Mr Chen Hui, Chief Representative of Weihai in the EU, introduced Weihai, a coastal city in China, located at the eastern tip of the Shandong peninsula. Weihai is the nearest Chinese city to South Korea, with a land area of 5,832 sq km, a coastline of 986 km and a population of 2.9 million. Weihai has received many honors: China's first national sanitary city; national forest city; national civilized city; and winner of the UN-Habitat scroll of honor for improving the living environment. Weihai has convenient transportation with nine sea routes to South Korea with the lowest delivery cost and most efficient Customs clearance. There are three international airports, Weihai, Yantai and Qingdao, within a two-hour driving distance with domestic and international connections. High-speed trains connect Weihai to Qingdao, Beijing and Shanghai. Weihai has 1,715 foreign-funded enterprises, 23 friendly-city relations with foreign cities and economic and trade cooperation with more than 200 countries and regions.
Investments from Belgium include Bekaert (USD300); Beaulieu International Group (USD145 million) and Huiyin New Energy. Belgian chocolate maker Filip Esprit is making hand-made chocolates in Weihai. Examples of international cooperation include the Marquardt Group, the largest electric switch manufacturer of Europe; Berger Group, the “hidden champion” of Germany in the field of automotive seatbelts; Rohm, the world champion in the drill chuck industry; and HP Group, setting up an A3 printer production base. In Weihai there is also the Sino-Euro Advanced Manufacturing Industrial Park focussed on electronic information, intelligent equipment and new materials with a phase 1 land area of 60,000 sq m. The Europe-China Industrial Park on Water Treatment and Membrane Technology Innovation has a total investment of CNY350 million with 28 enterprises established in the park.
Weihai has a sound industrial base with 15 national and provincial industrial parks and 20,000 industrial enterprises of various types. It ranks No 1 in the proportion of high-tech in industrial output in Shandong province and has 12 listed enterprises. Weihai has seven industrial clusters: information technology; new medicine and medical device industry; advanced equipment and intelligent manufacturing; carbon fiber and composites; marine biology and healthy food; fashion and leisure sports products; and health and wellness tourism. Weihai has abundant talent resources with 11 colleges and universities, 110,000 students in school and 20,000 graduating every year. The city has efficient government services.
Mr Adam Touhig, Senior Vice President RR Asia, Bekaert, explained that the company first came to China in 1993. Its regional headquarter Asia is located in Shanghai and Bekaert has 15 manufacturing plants in China, one R&D and engineering center in Jiangyin and approximately 9,000 employees. Bekaert has over €1 billion accumulated investment in the country. In Weihai, Bekaert Shandong Tire Cord (BSTC) is strategically located in an area with many local customers. The company was legally registered on 9 October 2003 and started production on 28 October 2004. It is the third Bekaert steel cord plant in China and is located in the Eco & Tech Development Zone of Weihai. It has 1,371 employees and produces tire cord.
On July 10, 2003, an MOU was signed between the Weihai government and Bekaert on Bekaert's investment in Weihai. The ground-breaking ceremony took place on December 10, 2003 and production of WWD and cord started on October 28, 2004. On August 15, 2005, BSTC was fully up and running. In December 2008, tire cord capacity reached 100,000 tons per year, expanding to 140,000 tons per year in December 2010 and BSTC becoming the biggest tire cord plant in the world. In January 2012, BSTC first reached 10 million working hours without LTA in the history of Bekaert. In August 2017, total tire cord capacity reached 167,000 tons per year. The company's registered capital has been raised from USD30 million to USD100 million and total investment increased from USD30 million to USD300 million.
Bekaert also organized several social activities in Weihai, including badminton and skill competitions, a family day and an annual party. BSTC obtained multiple awards such as foreign investment enterprise in advanced technology; harmonious enterprise on labor relationship; “A” grade tax payer and Shandong top brand. Mr Touhig concluded his presentation by thanking the Weihai authorities for their support.
Mr Berthold Arends, General Manager, Marquardt Switches Weihai, introduced his company. He said he supported Weihai to develop into a „fine city“ as this is fully in line with the strategy of Marquardt to develop sustainable high quality products, which are the success factor of Marquardt‘s history. You have all experienced Marquardt before. Every day, millions of people around the world come into contact with our products. In countless applications, integrated solutions from Marquardt form the convenient interface between man and machine, such as in cars and dishwashers. The company is also the world market leader in power tool switches. In total, the company produces about 24,000 products. Especially the demand for battery management systems “Made by Marquardt” increased exponentially last year. Marquardt currently employs about 10,200 people at 21 locations worldwide. In fiscal 2021, it generated sales of around €1.3 billion, an increase of more than 12% compared to 2020. Expenditure on research and development amounted to an above-average 10% of sales in fiscal year 2021. With 105 new patents and industrial property rights in 2021, it is clear that these investments are paying off.
Since 1995, Marquardt has grown organically by an average of around 10% per year, which can be attributed to entering the automotive industry. Marquardt has become one of the world's leading mechatronics experts. A major theme in its history is innovation. In 1925, the merchant Johannes Marquardt (1885-1963) and the identically named but only distantly related technician Johannes Marquardt (1889-1942) laid the foundation for their start-up, a "special plant for electrical needs and fine mechanics" in their Rietheim homes. They developed and sold innovative built-in switches for electrical appliances and power tools thus becoming pioneers of a new segment in the electrical industry. The young company received its first major order in 1926 from a vacuum cleaner manufacturer in Stuttgart. After the end of the Second World War, Marquardt was the first German company to produce snap-action switches in the 1950s. In the early 1960s, for the first time Marquardt began developing complete switch keyboards for washing machines. In the 1970s, Marquardt introduced electronic power tool switches to the market, becoming the world market leader.
In the automotive industry, with standard switches and customer-specific snap-action and operating switches, Marquardt opened up a completely new market. Marquardt positioned itself in with various sensors for household appliances and high-gloss control panel surfaces in so-called “Black Panel” technology. Marquardt opened up a new field with "Shift by wire", the shift control by electronic impulse, and began supplying BMW with gear selectors. In 2013, a new dosing system for liquid detergents revolutionized the inner workings of washing machines and dishwashers. Marquardt also became the leader in the future topic of electro mobility, evolving from a manufacturer of switches to an expert in interactive mechatronics. Evidence of this is found in displays for controlling heating systems, touchpads for vehicles, or battery management systems for electric cars. Approximately 60% of Marquardt products are five years old or younger.
Another competence of Marquardt is its worldwide presence, operating at 21 locations in 13 countries on four continents. This creates excellent logistical conditions and being very close to the customers, working with them in their local languages. With its mechatronic solutions, Marquardt has become the partner of many leading brands over the decades. From Mercedes, BMW, Audi and Porsche to Caterpillar, BSH household appliances and Stanley Black & Decker – Marquardt components are used in their products. An equally important success factor is being a family-owned company.: there are several Marquardt families whose members have been responsible for the company for decades and the shareholders reinvest profits to a large extent in the further development of the company.
Marquardt is passionate about developing the future, such as electro-mobility, with the key technology of battery management systems, which in electric cars ensure that no safety-critical conditions arise and will switch off the battery in the event of an emergency. The trend towards e-mobility has been made possible by the performance of lithium-ion batteries. The battery management systems from Marquardt continuously analyze the condition of the battery. Intelligent driving systems combine the reliable statements of the battery management system with the data of the navigation device. Marquardt is now bringing more comfort into household appliances with the development of the “Knob HMI,” an intuitive, smart rotary push button with an integrated display that can be used to seamlessly control numerous applications.
The success story of Marquardt has now also reached Weihai. With the foundation of the subsidiary Marquardt Switches Shanghai in China and a joint venture with the Indian switch manufacturer RG Keswani, the group of companies has positioned itself as a producer and employer in the Far Eastern markets. For further growth in Asia, a production plant was established in Weihai. The city meets many of the criteria that are important to Marquardt. This includes the infrastructure with trains and highways, with an international airport nearby and international ports. The many educational institutions, universities, technical colleges, vocational schools and training centers also do speak for Weihai. Furthermore the high quality of life with comparably much better air quality is another great plus for Weihai. Marquardt invested around €45 million into the so called phase 1 area. The expected annual sales of €190 million will be achieved with automotive products. The official opening ceremony for the second Marquardt production plant in China took place on September 8, 2019. The new plant covers an area of around 25,000 square meters and can be flexibly expanded at a later date. On April 11, 2022 Marquardt signed a project investment agreement with the city of Weihai for the phase 2 extension project. The total investment will be around €40 million. Main products manufactured in phase 2 will be high and low voltage battery management systems and drive authorization systems. Mr Arends thanked the local authorities of Weihai to continuously support Marquardt Switches Weihai.
Ms Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce/EU-China Business Association, Honorary Citizen of Weihai City and Shandong Province: “It is a pleasure to see you all again! Unfortunately, we have to meet again virtually but I do hope that next year we can all meet again in your beautiful and charming city. My first visit to Weihai was about 15 years ago and I have to say that the openness and the dynamism of the people of Weihai has left a deep impression on me! I am proud to be a honorary citizen of this vibrant and dynamic city! Today, during this webinar we learned a lot about Weihai’s unique natural environment, which no other city has. Besides that, it is an important high-quality manufacturing location. Confucius said: crossing the river by feeling the stones. Sharing experiences and learning from others is one of the services our Chamber gives to its members. Our founding members also built up a strong network in China and this is what we want to share with you. Today’s webinar is a clear example of the network we have and that our members can further build on.
Today, you also heard the testimonials of Bekaert, founding member of our chamber, and of Marquardt on investing in Weihai. It is impressive to hear that Bekaert has its single largest tire manufacturing plant in the world located in Weihai! This is also due to Weihai’s excellent government support and its can-do mentality! Also the success of our member of Beaulieu in China is a proof of the good business environment in Weihai. In 2020, when the pandemic was all over in China, Weihai got back to business very fast. As a result of that, our companies could quickly continue their production, expand their investment and increase their revenue. Also now, Weihai is a leading example in managing the situation. This is remarkable and thanks to good leadership and its citizens’ cooperation and support. Weihai’s attractiveness for foreign investors is impressive. Due to its natural environment, Weihai also has a very healthy environment with excellent air quality. It was also awarded best livable city!
Weihai has a range of advantages that also place it ahead of many other cities. It has a diversified economy with a focus on many industrial clusters, excellent local government support, a skilled labor force, an efficient and business-friendly investment environment, and good educational facilities. On top of that, the city is logistically well-connected. Good cooperation is also based on trust and the success of our other investors in Weihai gives confidence to other potential investors. Weihai has also been nominated as a fine and happy city for which I like to congratulate them once again!
I would like to thank the Weihai government and the Weihai Municipal Bureau of Commerce for its continued support given to our investors. Finally, as the saying goes: Seeing is believing: We hope more European companies will go to Weihai and lastly, I hope that next year our Chamber can bring a business delegation to Weihai!”
