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Dutch match-maker links controls firms with EU partners

11 March, 2013

For more than 40 years, an agency of the Dutch government has been helping to set up links between manufacturers in developing countries and companies in Europe. Malcolm Sheryn, who is the agency’s external expert for the motion control sector, explains how the scheme operates.

When European companies are looking to import industrial products from cost-effective sources, many of them turn automatically to China. But there are scores of other countries around the world that can also provide manufactured products at competitive prices, with no compromise on quality.

Since 1971, an agency of the Dutch government has been fostering this choice. The Centre for Promotion of Imports from Developing Countries (CBI) – an agency of the Dutch Ministry of Foreign Affairs – helps manufacturing entrepreneurs from SMEs (small and medium sized enterprises) in developing countries to export to the European Union.

Every manufacturer that applies to join the CBI programme is audited for various product- and non-product-related aspects of its business. If it is considered to be a good prospect, immediately or in the near term, as a manufacturer of products which have sustainable quality and are acceptable to the European market, the manufacturer is invited to join the programme. This acceptance is subject to it having suitable management standards and styles, including consideration and response to issues of corporate social responsibility.

Once in the programme, the company receives export coaching, marketing advice and, ultimately, connection and exposure to potential buyers in Europe. As part of this exposure, CBI invites the participants to exhibit at European trade shows.

The programme is supported by the Dutch government as a form of foreign aid. The participating companies do not receive money directly, but instead are coached by experts who help them to expand their export sales. Through this export-led growth, the manufacturers are encouraged to take on extra staff, resulting in more people being lifted out of the poverty trap.

Today, CBI supports exports from 48 developing countries in 27 sectors, including vegetables, wine, tourism and textiles – as well as industrial products. In the industrial products programme, there are eight sectors, including motion control equipment, automotive products, castings and forgings, and electronic components.

CBI participants in the motion control programme produce a wide range of products, including bearings and bearing components, gears, hydraulics, chains, sprockets, ballscrews, motors (both AC and DC), couplings, brakes, clutches, sensors, encoders and mechatronic systems.

CBI connects potential buyers to the most suitable manufacturer that meets their needs. It has introduced sub-contractors and finished product suppliers from developing countries to many of the world’s best-known brands in the world of drives and controls. CBI neither expects, nor receives, fees for this service. All of the commercial negotiations take place directly between the developing country exporter and the European importer.

In the motion control programme, CBI is currently active in countries including India, Vietnam, South Africa, the Philippines, Indonesia, Pakistan, Columbia, Bosnia, Egypt and Tunisia.

India, for example, has a large contingent of companies in the programme and has earned a fast-growing reputation for focusing on hi-tech products and systems, particularly in the field of mechatronics. CBI has offered support and assistance to India’s recently formed “mechatronics cluster”, which exhibited recently at the SPS/IPC/Drives exhibition in Nuremburg, Germany. Indian entrepreneurs are proving that they are no longer just re-engineering existing products, but can offer mission-critical systems for high-end applications in the defence, medical and aerospace industries, among others.

One Indian company involved in the CBI motion control programme is the Sewaram Kansara Group, which manufactures bearing rings and rollers for most of the world’s leading bearings producers. The company’s Rajasthan site includes a standards room (shown above), which is one of the best-equipped laboratories for structural testing of bearing steels anywhere in the world.

In the past couple of years, there has been a marked amount of “de-risking” away from China, with European companies looking for alternative, reliable sources. CBI – which has already audited its participants, understands their product strengths, and can identify areas for development – can shortcut the process of searching for new suppliers. The costs of searching for, auditing, and then developing new suppliers, can also be reduced dramatically.

Many global manufacturers have come to trust CBI as a “match-maker” that will introduce them to new “trouble-free and export ready” suppliers. Many of these suppliers can handle small production runs, which distinguishes them from many Chinese producers. As costs escalate and labour becomes more problematical in China, some low-end manufacturing has started to move to other South East Asian countries. It is likely that CBI will already be present in the countries which receive this type of work.

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