An industrial shift and a new need for outsourcing expert services have opened up plenty of new growth opportunities for Finnish company Etteplan in China. The engineering company is strengthening its foothold and simultaneously advancing its growth by opening two new offices in the country.
Etteplan provides industrial equipment and facility engineering, embedded systems, IoT and technical documentation solutions to the world’s leading companies in the manufacturing industry.
The company has been active in China since 2004 and currently has offices in Shanghai, Kunshan and Suzhou where they have 250 employees. With their new plan to expand in China, Etteplan will open new offices in Beijing and Xi’an.
The new cyclical nature of China’s market and the rise in labor costs in all pay classes has led China on a quest for cost-efficiency and flexibility. This has caused not only the purchasing of expert services to become more popular. but also the modernization of production in order to reduce labor costs.
“Modernizations have been made in Western-owned plants but they are now also spreading to Chinese-owned companies. This development opens up entirely new opportunities for an expert company like Etteplan, which specializes in industrial engineering services, embedded systems, the industrial internet and technical documentation,” says Juha Näkki, CEO of Etteplan.
The growth in business in China is currently at a few tens of percent for Etteplan annually. Opening up new offices is a strategy to further boost this growth.
“Our recruitment needs in China will grow with the establishment of two additional offices in entirely new areas. One of the offices will be based in the city of Xi’an, which houses an excellent university of technology. We wish to collaborate more closely with the university because we want to be near students and, in particular, graduating students. Competition for skilled people is tough in China,” says Näkki.
In addition to the industrial shift taking place in China, other growth opportunities for Etteplan result from a cultural change occurring in the purchasing of services.
“Before, the buying or outsourcing of engineering services was either unheard of or considered unnecessary in China. Chinese companies are now focusing more and more on their core business and they have come to realize that they do not need to do or know how to do everything themselves,” Näkki explains.
With the period of fast growth drawing to a close, Chinese companies are also recognizing the cyclical nature of business, which can be compensated for through outsourcing to create flexibility.
“Our service offering meets this need because it combines broad engineering expertise, tailored service solutions and digitalization expertise. This is the direction that the sector is taking – away from traditional engineering work. We have strong expertise in, for instance, the industrial internet and technical documentation, which is shaped by digitalization,” says Näkki.
“In addition, there is faith in the high quality of Western companies and in our reliability in IPR. We do well in price competition as well. It’s fair to say that if your products and services succeed in China, they can succeed anywhere.”