“Negative growth is an alien concept to the Chinese” | KPMG | CH
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“Negative growth is an alien concept to the Chinese”

“Negative growth is an alien concept to the Chinese”

Stefan Ludewig talks about cultural differences in an interview about the Chinese investors’ takeover of SIGG.


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Stefan Ludewig

Stefan Ludewig, SIGG's former CEO

Patrik Kerler: SIGG was taken over by Chinese group Haers at the start of 2016. What has your experience been to date?

Stefan Ludewig: Although SIGG is active in a small market segment, SIGG is one of Switzerland’s most famous brands. The public response was thus emotional when the announcement was made about SIGG’s acquisition by Chinese group Haers, resulting in a certain degree of unrest within the company and among the staff. However, I have no doubt that the new owner is committed to the Frauenfeld site in the long term. The media often paints a very negative and alarmist picture of Swiss company takeovers by Chinese buyers. I find this unnecessary and somewhat irresponsible as it stirs up public unrest. Essentially, there’s nothing wrong with Chinese companies investing in Swiss firms. It’s important that an investor brings entrepreneurial thinking – regardless of where they are from. However, it is a shame that it’s so difficult to find domestic buyers for small and medium-sized businesses. A little more local color in this area would be great.

What cultural differences have you experienced during your collaboration?

First and foremost, the language barrier, which obviously makes communication more difficult. Many of my contacts spoke little or no English, so we relied constantly on translations and interpreters. Sometimes the content suffers, particularly when it comes to sensitive topics. In addition, we’ve noticed that our Chinese owners have very high growth expectations, and always with a focus on self-financed growth. An understandable expectation, if you look back at China’s recent economic history, which has been characterized by double-digit growth rates and never zero growth or even a decline. To overstate it somewhat, mathematical negatives are an alien concept to the Chinese. So, SIGG must harmonize expectations through good expectation management.

Do you think that the Chinese will increase their M&A activities in Switzerland in future?

I see that as a general trend. China is geared towards expansion. The Chinese companies have a clear plan of how and where they want to grow internationally. This will impact Switzerland too. This development – the growing number of Chinese investors in Switzerland and in Europe in general – means that more small and medium-sized Chinese companies will be active here in future. In principle, that’s a welcome development. But with the increasing involvement from less experienced and not yet internationally oriented Chinese companies, professionalism in M&A activities will initially decline, while the cultural divide will widen.

What makes Swiss companies particularly attractive to Chinese investors?

Tradition. The Chinese value the history of local companies and are impressed by their many years’ experience. Most firms in China have been around for just 10 or 15 years, so it obviously makes an impression when a company like SIGG can look back on over 100 years of history. That’s what attracts Chinese investors.

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KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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