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  • Home > News > Details
    Dow to double sales in China
    2011-11-24

    After 8:30 am, the day is normally filled back-to-back with meetings, and most evenings from Monday to Friday he has dinner appointments. He tries to reserve one night during the week to have dinner at home with his family, but that's not always possible.

    Counting both domestic business trips within China and international travel, Sykes, the president of The Dow Chemical Co Greater China, spends about 65 to 70 percent of his time away from home.

    "I think that's very important (to my work) because in a place like China that is developing so rapidly, you cannot just learn about it through email," he said. "You have to go out into the marketplace and see for yourself, meet the customers directly, meet the government people, meet the employees, talk, look, ride around in car, look at what's being built, what's being developed, and what's going on."

    Sykes, 51, faces a huge task given the company's fast growth in China and its ambitious plans.

    Business diversity

    Dow, the world's second-largest chemical group by revenue, plans to double its sales in China to reach $7 billion to $8 billion by 2015.

    It has been growing fast in China, with an average annual growth rate of 16 percent year-on-year during the last decade.

    China has become Dow's second-largest international market and the multinational company's sales in China exceeded $4 billion last year, compared with global sales of $53.7 billion.

    The company's new plan for the next five years is in line with the Chinese government's 12th Five-Year Plan (2011-2015). Talking of the new five-year period, the word Sykes uses most is diversity.

    "We would like to diversify our presence in China (in the coming years) and diversify our participation in the marketplace," Sykes said. "It will require us to diversify the deployment of our people and diversify the talent pool of our organization."

    The US-based company's China development in the past few years can be attributed to efforts in high-growth and relatively prosperous provinces and cities, primarily along the coastal region of China.

    "The government has a very clearly stated objective to build up the west of the country and to put further emphasis on revitalizing the northeast, and we would also like to follow that growth path," said Sykes.

    Dow moved its headquarters to Shanghai in 2004, a headquarters for not only China but also the Asia-Pacific region. Now, in addition to six business centers across China, the company announced in early October it would open an office in Chengdu in Southwest China's Sichuan province in the first half of 2012, to engage in attracting new business in western China and gather information and intelligence on the differences in market needs in that region.

    "It will help our people here in the Shanghai Dow Center better understand how we need to customize new products or apply slightly different application technologies to meet the needs of that marketplace versus the markets we are serving on the coast," said Sykes.

    Dow has already taken steps to deepen its presence in western China. It is working with Shenhua Group, one of China's largest energy groups by sales, on establishing a world-class coal-to-chemicals project in Yulin in Northwest China's Shaanxi province. Without disclosing the precise level of investment in the project, Sykes said it will involve several billion US dollars, compared with Dow's combined investment of $1.2 billion in China since it entered the nation.

    "We are currently in the approval process under the NDRC (National Development and Reform Commission)," said Sykes. Insiders said the mega project is expected to begin operations by 2020 and the approval process may be very long, given the complicated elements, including the environment, transportation, logistics and employment considerations involved in the project.

    "We continue to actively work with our partner Shenhua on moving the project forward. Meanwhile, we are looking at a number of what I would call small- to medium-sized investments in probably the 50 to the several hundred million dollar range which would have different timings attached to them but all of which could be accomplished in the next three to four years," said the Greater China president.

    Dow is not the only chemical giant eyeing China's western region. Germany-based BASF SE, the world's largest chemical company by revenue, received approval in May for a 400,000 metric tons a year methylene diphenyl diisocyanate (MDI) project in southwestern China's Chongqing municipality, with a total investment of 8 billion yuan ($1.26 billion). The facility, which will produce a core component mainly used for polyurethane foams, is expected to begin operations by 2014.

    The project was approved by the Chinese authorities following the examination of environmental, health and safety standards, two rounds of local public consultation and several expert reviews, BASF said.

    "Chongqing is at the center of a growing inland region. Investing here will give us access to what will be one of the biggest MDI markets in the world," said Martin Brudermller, a member of the board of executive directors of BASF SE, who is responsible for the Asia-Pacific region.

    Employment diversity

    Geographic diversity naturally results in talent diversity. As the company extends its reach to various regions in China, it needs to have people who understand every corner of the nation. Dow currently has nearly 3,500 employees and plans to add another 1,000 people over the next few years.

    "I expect the increased workforce will be spread across different parts of China to take advantage of the new growth fundamentals there," said Sykes.

    It's important that the company has a diversity of personality, a diversity of people who may have different life objectives in terms of where they would like to live and grow and where they would like to raise their future families, according to the president.

    "We are aware that the family unit in China is very strong, so we need to create an organization that has enough flexibility and mobility to give people opportunities," said Sykes. Sykes himself is a person with high flexibility and a deep respect for family.

    After joining Dow in London in 1981, Sykes, a British citizen, has since held a number of financial and management positions in various fields, including sales, marketing, finance, engineering, commerce, and corporate management in North America, Japan, Singapore, and Thailand.

    Over his 30-year career at Dow, more than 20 years have been spent in Asia. He brings his family with him when he moves.

    "The thing that I value most is clearly my family, no question, number one," he said. Sykes married Trisha, who is Malaysian Chinese, and they have two children - Gemma, aged 13, and Henry, 12. Both currently attend the Shanghai American School.

    While, as a corporate executive, Sykes understands that not everyone will be 100 percent flexible and mobile, the company needs to plan for that and have a system that can accomplish all of these objectives.

    "I think diversifying the talent pool through diversifying the way we direct our hiring is an important aspect. Academic capability and professional capability are very important considerations, but not the only considerations. Personality, the mindset of the individual, bringing different experiences to the table, and bringing different knowledge must also be taken into account," he said.

    According to the 2011 AmCham-China Business Climate Survey released by the American Chamber of Commerce in China in March, the difficulties in attracting, developing and retaining skilled workers, professionals and managers is one of the top five challenges US companies face in China.

    A survey conducted by international human resources provider Manpower Inc released in July shows that 24 percent of companies doing business on the Chinese mainland face a shortage of talent. The most needed jobs are technicians, engineers and sales.

    The survey covered 4,241 enterprises, involving foreign, State-owned and Chinese private companies.

    Sykes explained Dow's talent strategy in China is about giving freedom - no fixed working hours - while requiring a sense of responsibility. "You are a responsible person. We don't want to treat you like you are a 6-year-old school child. We aren't running a kindergarten and we aren't running a jail either," he said.

    "I believe that for young people in China to be given this kind of freedom, to be given this kind of trust, to be given all of the different kind of tools to learn (is a good thing)," he said.

    Ronnie Chen, human resources director of Dow Greater China, said Sykes "has a more important job - an HR partner", who vigorously supports people and is passionate about developing talent.

    Life diversity

    "He is passionate because he has put so much energy and focus into what he does every day over 30 years of working for Dow. By the way, 30 years at Dow does not necessarily mean he is old," said Ross Ma, public affairs director of Dow Greater China, adding that Sykes' energy may have something to do with his love of sports - soccer, skiing and motor racing.

    Sykes exercises in the gym at the company's headquarters when not traveling.

    He believes in some sense sports and business management fit together quite well. "I think from a business standpoint, whether you are driving a fast car, or skiing fast down a hill, you have to have the right equipment, you have to have a course or a path you are following, you have to be aware of the risks around you, and you have to have a general confidence in your abilities, but also some ability to take some evasive action if an unexpected situation develops," he said.

    Foreign chemical giants are accused by some environmental organizations in China of moving their manufacturing facilities to developing nations, including China, as a means of shifting pollution from their previous locations.

    "I believe that the focus of growth is definitely shifting to the developing nations, but I believe that's due to the size of the economic opportunity and the demand growth in those territories. I don't think the industry as a whole is moving from one area to another to avoid pollution in one place and create it somewhere else," Sykes said.

    Deloitte Touche Tohmatsu Ltd forecast that China is to overtake the United States as the world's largest chemical market by the end of 2011.

    © Copyright 2017 Invest in Yulin
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