China and Tajco: Well-Matched.

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In 2005, Tajco Group A/S faced the need to make an important decision. Since 1999, the company had enjoyed rapid growth, and there were not nearly enough production facilities in Grindsted. The alternatives were to expand in Denmark or move production to Eastern Europe or Asia. Rolf Ebbesen, CEO of Tajco, gave the following reasons for choosing China:
“Our industry is labour intensive since we manufacture a designer product. If we continue the production line in Denmark, we would face very high costs. In China, on the other hand, we could have lower payroll costs,” he says.

However, Tajco’s management was not immediately convinced that the Chinese could match Danish standards. But a visit to a number of Chinese companies from the north to the south of China changed their mind:
“We saw that China could provide good quality and that it could turn out to be a threat to Tajco. So we chose to join them before we were threatened,” says COO Jan Szklany who built up the Chinese operation right from the beginning and is Tajco’s General Manager on-site in China.

Goals Achieved
Since October 2005, the relocation began. Tajco was moving into NIP Ningbo, a modern, Norwegian-owned industrial estate on the east coast of China.

Tajco had three specific goals when they moved their factory to Asia: lower payroll expenditure, equivalent quality and equivalent efficiency, both of which had to be just as high as they were in Denmark.
“All three goals have been achieved. In fact, our efficiency is much higher now. Living up to the high standards required by the automotive industry is a major task. We were only able to have done so in China, because it has given us the resources and the financial flexibility to develop the whole organisation,” says Rolf Ebbesen. Jan Szklany agrees: “Tajco would not be operating today if we had not moved to China.”

‘Guanxi’ Is Important
Naturally, there are challenges to relocating a Danish company to an Asiatic country. They include problems with customs, since China generally does not wish to import goods.
“It has proved difficult to get containers released, but we were able to do that after having established good relations with the authorities,” reports Jan Szklany.

For him, it has been much more important to get to know about the Chinese concept of ’Guanxi.’
“It means networking. But in China networking means much more than it does in Denmark,” is Jan Szklany’s experience. Another challenge for him as a Danish manager is the working mentality of the Chinese, which is very different from the Danish one.
“Daily routines have to be highly structured. I was surprised at how detailed my instructions had to be to get the right output,” says Jan Szklany, who is pleased with the conscientiousness and work ethic of the Chinese.

Global Automotive Market
Rolf Ebbesen and Jan Szklany both agree that the future looks especially bright for Tajco in China.
“The automotive market is becoming globalized very rapidly these days. There is a major demand for products of high quality in Europe and USA, and we are beginning to see something similar in Asia. There is no doubt that the opportunities are out there. At the moment we are considering how to introduce European quality to the Chinese market,” says Rolf Ebbesen.

About Tajco:
The Tajco Group is a Danish company that designs and manufactures exhaust tailpipes, mainly for the German automotive industry.The Group’s head office is in Grindsted, with manufacturing facilities in Ningbo, China and a total headcount of 250.

Tajco leads the market in its field and supplies such major car makers as BMW, Audi, VW and Daimler. Every year Tajco produces 3.0 million tailpipes in China.

www.tajco.biz

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