Patrick Wang creates value for customers and shareholders of Johnson Electric through strategic initiatives

PUBLISHED : Friday, 08 December, 2000, 12:00am
UPDATED : Friday, 08 December, 2000, 12:00am

Johnson Electric Holdings chairman Patrick Wang Shui-chung, was last night named the DHL International (HK)/South China Morning Post Businessman of the Year, crowning a decade of growth for the multinational enterprise which he heads.

Johnson is one of the largest independent designers and manufacturers of micro-motors in the world and makes more than 1.5 million motors a day.

Mr Wang was among six individuals and companies honoured for their oustanding achievements in business. The prestigious awards scheme is now in its 11th year.

In addition to the Businessman of the Year, there are five other honours: Executive Award, Owner-Operator Award, Young Entrepreneur, the International Award and the Enterprise Award.

Mr Wang, who is also chief executive of Johnson, leads an enterprise that employs more than 23,000 people in 14 countries, and which has recorded a compound annual growth rate of 20 per cent since 1990 in its bottom line.

For the year ending March, revenue soared 84 per cent to US$677 million compared with the previous year with profit attributable to shareholders jumping 28 per cent to US$136 million.

Johnson's customers are manufacturers of motor vehicle components, power tools, home appliances, business equipment and personal care products.

Johnson believes that expanding the scale of operations globally helps to create value for cus tomers and shareholders in addition to being able to serve multinational cutomers efficiently and effectively.

'We are very competitive. We have a global presence. As a result, we are able to leverage those strengths,' Mr Wang said.

'The global presence is important. There is a big premium to that, as people want the same level of service everywhere.'

Johnson has seen growing demand for its core micro-motor products, but Mr Wang said the company had worked hard to explore new opportunities. 'We create our own luck,' he said.

Initiatives aimed at expanding business helped Johnson's European operations to increase sales despite a weak euro.

'In spite of a sluggish market in Europe, we have been able to make up for that euro loss with more new products,' Mr Wang said. In the past financial year, while sales in Europe increased 8 per cent, sales in Hong Kong/China and Asia Pacific grew 28 per cent (excluding sales from Electric Motor Systems).

Last summer's acquisition of Electric Motor Systems (EMS) - which has operations in the United States and Europe - has also boosted Johnson's growth prospects in both regions. EMS has been renamed Johnson Electric Automotive since the acquisition.

The company has since been identifying components in Johnson Electric Automotive that could be produced more cheaply in Asia.

Even allowing for this large acquisition - which was worth US$310 million - Johnson's existing operations have also been growing. Stripping out Johnson Electric Automotive's contribution in the financial year to last March, turnover still increased 16 per cent.

Johnson has also expanded into the Japanese market, setting up a joint venture with micro- motor manufacturer Nidec Corporation to produce motors for audio and computer products.

Mr Wang expects the joint venture, Nidec Johnson Electric, to see revenue growth of 200 per cent per annum in the initial stages.

In August this year, Johnson set up two new companies in Brazil to better serve the large car makers. The two firms will manufacture plastic parts and cooling fan modules, which will complement Johnson's Argentinian joint venture which produces electric motors.

Besides wanting suppliers to have a global presence, Mr Wang believes in providing efficient after-sales services rather than just a variety of products.

'People are looking more and more for the things outside the product,' Mr Wang said.

The most important factor in the company's success has been the management structure, according to Mr Wang.

'We have a strong operational headquarters in Hong Kong, where our team is very aligned to business units which are then aligned to business opportunities,' he said.

Staff training is also valued highly. The company has set up Johnson University, a tailor- made development programme to enhance the skills of the company's workforce.

Established in 1998, the programme, has forged links with several universities in the mainland to launch academic programmes. These include master's and bachelor's programmes in micro-motor design, with the Southeast University, and a bachelor's in mechanical engineering with the Harbin Institute of Technology. Language programmes, such as business English, have also been organised.

Johnson Electric was founded in 1959 by an enterprising couple, the late Wang Seng Liang, and his wife Wang Koo Yik Chun, to pioneer the local manufacture of high quality electric motors for toys. Patrick Wang Shui-chung, the couple's son, became chairman and chief executive in 1996.