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Chinese company finds secret to business success in West Africa

Jan 27, 2015

It took Su Yuehua a while to figure it out, but he learned the secret to business success in West Africa, reports Xiao Lixin.

Two decades ago, Su Yuehua landed in the West African nation of Ghana to build from scratch the branch office of China Gansu International Corp for Economic and Technical Cooperation, a contracting company. Su, now 50, has remained in Ghana since then, and has been recognized by Chinese and local authorities for turning that branch into a large, thriving and diversified company that is expanding to other parts of West Africa.

Along the way, he said, he has had to abandon some ways of thinking and absorbing local customs, ways of doing business and even learn an African language. In the process, he has improved ties between China and Ghana and made many friends, too.

Su, chairman of the subsidiary, China State Hualong (Ghana) Corp, has led the transformation of the Ghanaian branch of the company, which has grown beyond its main businesses of industrial and civil architecture, urban road and bridge construction and international project contracting, into an enterprise with annual revenue of more than $100 million.

Su at first met many challenges, such as extremely harsh living and working conditions at the time, as well as consecutive setbacks in failing to win project bids. But instead of feeling intimidated, Su made a big effort to gain experience by working with employees on construction sites. He would often wonder what went wrong when there was a problem with the company's operations.

Su noticed that the fundamental reason that Hualong did not win project bids was the failure to better understand local culture and background information about the bid project, and, more importantly, to build mutual trust with the local people. From then on, Su started to learn and practice not only English, but also the local Twi dialect because, he said, he believed that only through barrier-free communication could he learn what the local people truly wanted.

Before too long, Su could communicate freely with local people. That not only brought him many friends, but also bridged the distance between him and Ghanaians, as well as helping the company better integrate into the local community. Over the decades, Su's company has established seven of its own subsidiary corporations, stretching its business into real estate, import and export trade, pharmaceuticals production and the hospitality business, making Hualong a comprehensive group corporation.

Hualong's newest enterprise is pharmaceuticals production. It is a business removed from the company's established strengths and advantages, but still is considered a highlight in the company's operations, given the considerable market prospects of pharmaceuticals in Africa. The company put a new pharmaceutical factory into production in 2014 after equipment testing was finished. The production and sales of pharmaceuticals will be given priority as a key sector in Hualong's diversified business operations, the company said.

After gaining a firm foothold in Ghana, Su set about expanding Hualong into the entire West African region. There are good reasons for that. The past few years have not been so good for Ghana's economy. With the economy's problems and its limited market capacity in the construction industry, the board of directors of Hualong decided on an "out of Ghana" strategy and started exploring opportunities in neighboring African countries. Benin, for its stable political and economic situation and healthier market, was chosen as the first step in Hualong's business expansion in the region.

On Dec 29, Hualong made its latest expansionary move by signing a contract for a road and harbor construction project in Benin worth $623 million. The project, estimated to take three years, is expected to create a transit center for crude oil and supplies, connecting Cotonou, the country's biggest city, to northern Benin and the neighboring countries of Nigeria, Niger, Mali and Burkina Faso.

The project will cover 61 hectares, including 300 large parking lots for platform trailers, 9,600 storage areas for containerized freight, five oil tanks each with a volume of 18,500 cubic meters, four large warehouses as well as office buildings, banks and fire stations.

Hualong also is involved in the construction of a hospital in Guinea and a deepwater port in Benin. Su said Hualong always keeps its social responsibilities in mind. It has donated money and materials to local groups in need. It donated $20,000 and built a canteen for a girls' middle school in the Upper West Region in 2006, and helped with the maintenance and renovation of a 3-kilometer road in Accra in 2011.

"We will continue building local infrastructure and devote resources to public welfare establishments in Ghana, for the sake of Ghana's social, economic and cultural development and China-Ghana friendship," said Su.

Twenty years of devotion to his career and the enterprise's operation in Ghana has also won Su accolades. Not only was he nominated by the China Enterprises International Development Association as a "China excellent entrepreneur", he also was selected as vice-chairman of the China-Africa Business Council. Ghana's president also made Su an honorary citizen.

When asked for advice on what Chinese enterprises should do to win business opportunities in Africa, Su said priority should first be given to localization in the host country. Chinese companies doing business in Africa should strictly abide by local laws and regulations, respect local customs and habits, and learn to cultivate local management and technical talent, he said.

They also should be aware of local laws to protect their legitimate rights, he said. Hualong has about 3,000 employees, both Chinese and Ghanaian, that include senior engineers, engineers, senior mechanics and workers of all kinds. In the past two years, the company achieved annual revenue of more than $140 million and each year has created hundreds of jobs in local communities in Ghana. 


Source: Xiao Lixin(China Daily)

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