‘ o o t no ife at ime s Weifang

The foreign business culture and quiet life in Shandong province have not stopped the Sime Darby team from building ‘guanxi’ for the success of their venture.

IN Shandong province, there is a time-honoured dining tradition that no one wants to defy. The host and his co-host will toast his guests at a round table three times each with local Qingtao beer or/and white liquor that has 50% alcohol content until some get knocked out.

The practice dates back many decades in this eastern coastal province of China, where the poetic Yellow River ends and the revered philosopher and teacher Confucius was born.

During such Shandong dinner, the key host will speak before each toast, normally uttering some niceties before the first “bottoms up”. It is in the second or third toast that the real serious content might hit you.

For the first several years in building up Sime Darby Bhd’s Weifang Port, located in central northern Shandong, Bentong-born Lai Ah Chek and his colleagues had to learn to drink like a fish seven days a week to develop guanxi (relationship) with Chinese officials and businessmen.

The English-educated head of logistics and marketing of Weifang Port also had to learn to speak some polite niceties in Mandarin to communicate with local Chinese officials.

And to kill loneliness in this port, located 50km away from the nine million people living in Weifang, a town at the south coast of Bohai Sea, Lai will cook or drive to activity-packed Qingdao during the weekend.

The Australian-trained logistics expert says at his first ever media interview: “I only learnt how to drink hard liquor after coming to Weifang. During the first few years, it was almost every night. You have to do this to build up guanxi, network and get a proper job done.

“My wife refuses to come and join me here as she cannot stand this kind of local business culture, where the spouse is not invited to such drinking dinners.”

The suntanned, energetic man adds wryly, “My belly, caused by these non-stop dinners, just refuses to flatten even though I exercise hard everyday... Now I have to train the younger people to take over this dinning and drinking business.”

Guanxi aside, a lot of real serious work had to be done. Sime Darby’s headquarters in Kuala Lumpur sets a high key performance index (KPI) for the port every year.

However, the high KPI had not deterred this former logistics and transportation consultant from charging ahead. The acting head of Weifang Port had delivered from the first year of operation.

And in the initial years, a high-ranking official from Sime Darby’s headquarters went to inspect them every month, guide and build up guanxi.

While most other foreign investors in China’s ports had struggled in the first five years – either because they were cheated or had incurred heavy losses or were caught in corruption scandals, Weifang Port managed to stay ahead of the pack.

Its operation became profitable in the first year. For the past 10 years, business expanded along with the rapid economic development of China and Weifang, an industrial and farming town.

Weifang ‘one of most efficient o ts

According to a study conducted by UK-based BMT Consulting, Weifang Port is ranked as one of the “most efficient and cost-effective” ports in mainland China.

Among the achievements for this midsized port: It has become a major transit port for bauxite and a major distribution centre for iron ore in central and western Shandong. It is China’s major export port for sea salt and marine chemical products, a national designated port for cattle (dairy) import in Shandong.

The contribution and devotion of Lai in laying the foundation for the port’s success has not gone unnoticed by his current boss.

The managing director of Sime Darby’s Energy and Utilities (China Operations), Timothy Lee, spoke highly of him to a visiting Malaysian business delegation recently.

On May 18, in typical Shandong dining style, Lee – from Hong Kong with over 20 years of international experience in port management – praised his co-host during his second toast while entertaining the Malaysians to a dinner.

“This drink is to express my gratitude to Lai for his dedication, hard work and contribution towards making Weifang Port a success.”

Lee also expressed appreciation to the port’s longest-serving Malaysian who had proposed to Sime Darby to develop China’s first halal industrial park and first halal port to draw in new businesses and grab a slice of the US$2.3bil (RM9.3bil) global halal market.

In a separate interview with Sunday Star in China, the handsome-looking, 51-year-old port veteran says Weifang Port’s success lies in having hired the right team of professionals to manage the business from the start.

“We have a good team of right people to run our business. This team of people, armed with expertise, knows exactly how to run our port business in China. It is amazing to see them churning out profits every year from day one.

“They have built up good relationship with the government and gained support from them. In China, without government support you cannot run a port successfully,” says Lee in his office at Weifang Port.

While Lai and his early team had laid the early foundation for Weifang Port’s development, Lee’s entry into Sime Darby about four and a half years ago has propelled the port to another height.

Armed with over two decades of container port experience, this fresh face introduced the container handling operation in Weifang Port in December 2012, making the port the first to launch this operation in the special economic zone of Yellow River Delta.

In 2015, the port’s container throughput rose to 194,324 TEU, more than triple the 61,000 TEU handled in 2013. The port is likely to surpass the 200,000 TEU mark this year, according to its information booklet.

The container port operation covers domestic and international container routes, and its cargo handling include salt, soda ash, cotton textiles, minerals, grains, plastics, pipe fittings, ceramics and paper products.

Before Lee entered into the picture, the port handling operation focused mainly on bulk and general cargoes, liquid chemicals only. Lee joined Sime Darby in December 2011, after serving the Hong Kong port for over 20 years.

Now, Weifang Port can claim it is the “largest modernised multi-purpose and comprehensive port” in the Yellow River Delta, and an important feeder port within the Bohai Rim.

The port implements a 24-hour operation model that handles 70,000 tonnes per day for bulk and general cargoes. It is now ranked as a port with the highest bulk salt loading efficiency in the Bohai Rim, with 2,000 metric tonnes per hour.

The efficiency achieved now is a far cry from the starting days. When Sime Darby first took over the port, there were many cargo ships waiting to unload their content, and more cargo on land was waiting to be shipped out, Lai recalls.

Under Lee’s leadership, the port is positioned to be a feeder port for domestic routes and regional port for international routes. It now has shipping links with Taiwan, Korea and Malaysia, and is talking to Japan.

Being a national class-one open port with direct shipping routes covering ports along the coast, Weifang Port acts as an important feeder port for transshipment at the middle and northwestern region of Shandong province.

When talking about the other factors contributing to the success of the port, the Canadian-trained Lee states the port’s operation has also stayed lean from the beginning.

The other proud achievement of Weifang Port is that the local team has successfully educated local officials to understand how the development of the port could act as a catalyst to bring in investments and boost economic activities in the hinterland.

In fact, after Sime Darby decided in 2006 to turn the loss-making port into a mid-sized port serving industries in the region, foreign direct investments began streaming into Weifang.

But the most difficult part of doing busi-