Sigma-Aldrich, a leading life science and high technology company is known for its range of biochemical and organic chemical products. Much of these find application in scientific research and manufacturing, covering the entire strata of genomics, proteomics, biotechnology, pharmaceutical development and disease diagnostics.
Pointing out that Japan is the largest research market in Asia today and the company has a strong presence in the country, Sigma Aldrich Corporation’s Eric Green, Vice President & Managing Director, International and Karen Miller, Senior Vice President, Strategy & Corporate Development say “Our key focus is to accelerate localization to drive growth in Asia Pacific”. Given below are excerpts from an interaction with Nandita Vijay, during their recent visit to India for the inauguration of the new distribution centre and packaging facility at Bengaluru.
How important is Japan for your future growth initiatives?
Eric Green: Japan is a third of our international operations. It is the largest research market in Asia today and we have a strong presence in the country. While the market growth is not as robust as China, India and Brazil, Japan remains an important market for innovation and manufacturing and we will continue to invest in advancing our capabilities to service our customers.
Could you provide a snap shot of your presence in Japan ?
Eric Green: Sigma Aldrich has a strong presence in Japan with manufacturing capabilities in Sapporo, distribution and logistics facility in Tokyo, and sales and administration offices in Tokyo and Osaka. Japan is an important region that drives innovation and new technologies in the areas of life science and high technology, therefore, we will continue to invest in capabilities to expand our products and services to support our customers.
How important are the markets of Asia Pacific and Latin America in your growth strategies?
Eric Green: We have done well in Asia Pacific and Latin America with consistent double digit growth. This growth has been primarily driven by our first mover advantage and having a direct presence in all major markets. Our strong foundation in the region has enabled us to advance our expansion plans in the faster growing markets of India, China, South Korea and Brazil.
What are the specific focus plans of the company in these regions?
Karen Miller: Sigma Aldrich has adopted a consistent enterprise strategy which is based on three different factors. First, we are looking to expand our range of products and services to be a broad based supplier to our customers. Second, we are making sure that we have an excellent operational approach. For that we have plans and this is where we have talked about localization to get closer to the customers. It allows us to efficiently deliver services, whether it is with our packaging or manufacturing capabilities. Third is the customer intimacy where we understand their needs and help them to solve problems with our products and solutions.
Please give us an overview of the plan of action in Asia Pacific and Latin America?
Eric Green: First of all, we have a strong presence in many of these markets with manufacturing, distribution and logistics capabilities, and a direct sales model with our customers. Our plan, going forward , is to build on a strong foundation and to execute on our localization strategy with increased supply chain capabilities in Asia Pacific and Latin America. In the past nine months, we have made significant progress. In May 2011, we acquired Vetec Quimica, the largest domestic laboratory chemical manufacturer and distributor in Brazil; today we just held our inauguration ceremony of the new packaging and expanded distribution capabilities in Bengaluru. In late 2011, we completed the construction of packaging, QC, distribution facilities on a 20-acre campus in Wuxi, China; and we are in the final stages of completing a new SAFC hitech plant in Taiwan. With these investments and further expansion plans in the region, we are accelerating our presence in Asia Pacific and Latin America.
What has been the impact of the global recession in these markets?
Karen Miller: In the local markets of the Asia Pacific region, we do not think there was an impact of the global economic slowdown because we continued to capture market shares in these regions. We are focused on driving growth as we expand our presence. This is also because we are backed by our initiatives of getting closer to the customer and expanding locally, thus driving the assets closer to where the customers are. This has helped us to spur the growth. Therefore, relatively we have not experienced slowdown in these markets.
On the contrary, in the US, there has been an impact by the slowdown ensuing out of the recession. The turmoil has taken the toll led by uncertain demand. First of all, it has to do with some of the challenges in the academic – research funding. So there has been some impact associated with these issues resulting in a bleak outlook. But the good news is that, there are imminent signs of a recovery. We believe, going forward, things would look much better.
But the economic downturn has certainly affected Europe which has some spill- over affect, led by uncertainties in the demand environment in both new and existing businesses. Hence, there appears to be a reason to fear the crisis. But our goal is to stay on course and continue to make sure that we drive growth.