China a huge growth engine for MAN Diesel & Turbo

German company's strong connection with country stretches back more than a century

Uwe Lauber says he's almost become half Chinese after countless visits to China. Lauber, the CEO of MAN Diesel & Turbo, which is based in Augsburg, Germany, says the large number of trips have been necessary because China is MAN's biggest and most important market.

MAN Diesel & Turbo's history in China can be traced back 120 years, and the nation's shipping industry has been closely associated with the brand for the past four decades.

Much of the world's trade is moved by MAN Diesel& Turbo engines, and all of those used in China are locally made and licensed by MAN.

Lauber says he believes it is important to bring the technology to China to help Chinese manufacturers produce faster.

He says MAN is 100 percent committed to supporting local manufacturing, and China is becoming the center of global trade and the shipping industry.

Calling MAN a partner of Chinese industry, Lauber says his company has made efforts to become the driving engine for the whole economy through its knowledge and engines.

Lauber recently talked with China Daily about MAN Diesel & Turbo's operations and business prospects in China. Here are edited excerpts from the interview:

What's your mission for your latest China trip?

My calendar on this China trip is fully booked. My mission is to be as close as possible to our clients, listen to them, and reflect their needs and contribute to their success. I will also visit our Changzhou (Jiangsu province) facility, which is one of our biggest facilities in China.

It's been a year since MAN Diesel & Turbo's bonded warehouse and workshop was officially launched. How has it gone?

Our warehouse and workshop are inside a two-story building, located in the Free Trade Zone area in Yangshan, about 30 minutes by car from Yangshan Port.

It is wholly owned by MAN Diesel & Turbo and has a total floor area of 2,000 square meters.

The bonded warehouse allows smoother clearance for our customers. It saves time, and also money, for our customers, as they don't have to pay duties and VAT (value-added tax).

The bonded workshop provides repairs and reconditioning services. The concept was invented by MAN and is similar to a pit stop in Formula 1 racing, where components of our engines in ships are changed quickly. When vessels call at Yangshan Port, we are able to go onboard the vessels, quickly change, repair or recondition the components.

In the past, when the parts were broken, we had to produce the components first and send them wherever the ship was, which is quite different from what we are doing now. With this bonded warehouse and workshop, 80 percent of our main parts are already there.

You may be aware of China's Made in China 2025 and Belt and Road Initiative. What opportunities does MAN Diesel& Turbo see in these initiatives?

There are two megatrends supporting our global strategy: de-carbonization and digitalization. These two megatrends are also very important to China. These are the drivers for new business models.

De-carbonization means we will replace fuel with LNG (liquefied natural gas), for instance, and we support the Chinese government's initiative to reduce CO2 emissions. It is really important that we consider ourselves a partner of industry, not as a supplier or sub-supplier, but rather as part of one team. These two megatrends are embedded into our company's strategy, to fully support Chinese government initiatives.

MAN fully supports the gas initiative which China is driving. As for Green Growth, we are also fully in line with China. We have to live today, but we also have to think about our sons and grandsons. This is our obligation. With our technology and products and with trends toward LNG and gas, we can support these initiatives.

What's your biggest achievement in China so far?

MAN has been doing business in China since 1898. Engines and marine systems, turbo machinery and power plants are the three pillars of our business.

China is the most important market. Ships are being built predominantly in China, South Korea and Japan. These are the three big players. But doing business with Chinese is most important because most of the container vessels are being built in China, so that's why we are very strong in our relationship with China.

We transfer technology to China. It's very important that our engines are built locally. Last year, we had more than 80 percent market share for large container vessels and tankers in the global market, while our engines are Chinese products, 100 percent locally made. Our business model is based on licensees. We send drawings to Chinese local builders and they produce engines.

Apart from doing business locally, we also support Chinese customers in their business. This is reflected in the fact that we have set up a training academy in Shanghai to train people locally. Our philosophy is to bring the knowhow to where the know-how is needed. We have 600 local employees here to support our Chinese businesses.

How much did China contribute to your global business? How did the China market perform in 2016? As China endeavors to develop itself into a shipbuilding power, do you see any opportunity for MAN to cooperate with local engine companies?

Between 12 and 15 percent of our annual revenue comes from China. Last year, the industry was in a downturn, but generally we look positively to the future. China has huge potential, and we are used to coping with upswings and downswings.

As part of the (Chinese industry) team, we will get even closer to our licensees, to make our engines even more efficient, teaming up with them to overcome the challenges.

You have been with MAN Diesel & Turbo for 17 years. How did you reach your current position, and what is the secret of your success?

Innovation. As an engineer, I love to design new technologies, new engines, which helps provide benefits for the customer. Innovation is the key driver, and looking at MAN, with leading technologies spanning more than 250 years, this is very important for our company. Technological innovation drives business success.

Second, it's the team. It's not my success. Third, once we have consensus, we execute. I think this is also very important in a lot of organizations. Sometimes there are a lot of debates, but no outcome, no execution. So you have to have the right team, find a consensus and then execute the strategy.

What's the greatest challenge you've encountered since taking over as CEO?

The greatest challenge is adapting to market conditions. Currently, the marine industry and turbo machinery business are going through difficult times. We constantly need to identify and invest in new areas for growth, such as de-carbonization and digitalization. New technologies must always be invested in, and we have a lot of R&D plans in the pipeline. Executing these strategies and future programs is a challenge.

What are your hobbies? How do the hobbies influence your personality and management style?

I was born in the southern part of Germany, in a mountainous region known as the Black Forest. So climbing mountains and skiing are what I do quite often. And in summer, I do a lot of jogging. Sports activities are very important for me to keep healthy. Work-life balance is also important.

What is your life/business philosophy?

My business philosophy is teamwork. It's not me, it's the team. You need the right people to realize a business strategy.

What kind of "green" lifestyle do you have?

I'm trying to avoid using elevators. Sometimes in China it is difficult if you have your room on the 20th or 30th floor!

wang_ying@chinadaily.com.cn

Bio

Age: 50

Birthplace: Bad Sackingen, Germany

Career:

2015 onward: CEO of MAN Diesel & Turbo

2014-15: Executive Board member, responsible for sales and after sales

2010-14: Head of the Oil & Gas business unit

2000-10: Head of compressor design, Head of compressor R&D

1992-2000: Management positions with BOC Cryostar

Education:

1992: Master's degree in mechanical engineering, University of Konstanz

2000: Master's degree in Economic Engineering, University St. Gallen

2009: PhD in mechanical engineering, University of Kronstadt

Family:

Married with two children