Orlando Wang and Marjon Wind
Clearfocus
The bottom line
they have to balance the risks involved against the incentives of
cheaper labour and manufacturing costs, and getting ahead of
the competition. China is catching up with western economies
much faster than most people think, however, and I envisage
more and more companies entering the market over the coming
years/says Wind.
In Jeroen Nijsen's view, 'Lots of companies and banks feel that
they should be involved in China, but many of them don't know
exactly how. By concentrating on the F&A sector, we have a clear
focus on what we want to achieve in the Chinese market and can
differentiate ourselves from the competition. Our in-house
expertise enables usto provide the full spectrum of services to
clients, ranging from advisory products (e.g. market research,
M&A, hedging strategies) to financing and GFM products. Our
competitors are concentrating on a relatively small pool of large
industrial concerns, mainly outside our focus sectors, paradoxicaliy
creating an 'overbanked' market in that segment,' he says.
A good example of the type of innovative trade finance solutions
that Rl offers concerns a Chinese frozen fish processor. Nijsen:
The company transports Alaskan Poliock to a bonded warehouse
in China, where it is stored before processing. We provide
dynamic financing against the stock, establishing warehouse
control through a third-party warehouse operator. As a result of
our initial creativity and commitment, we are now talking to the
cliënt regarding a syndicated loan, a credit line for their newly
acquired operation in Japan and a possible listing of their
upstream activities on the Singapore stock exchange.'
'Based on our current projections,' Nijsen concludes, 'our target is
to doublé our income from the Greater China region to US$65
million by the end of 2007. The Hong Kong branch will continue
to account for most of this, as it is the region's product hub.
Nevertheless, our Chinese operations are expected to contribute
around US$8.5 million virtually from scratch and, whether directly
or indirectly, China will become the main driver of the bank's
performance, both in North East Asia and well beyond. It is a
market in which Rabobank needs to be present and, guided by
our ambition to be the world's number-one F&A bank, we
anticipate a great future.'
The Word 19
