Dr. Heinz Jörg Fuhrmann - Schau Verlag Hamburg

Peter Meyer must have a stomach
of steel by now. Over the past
20 years the delicacies that have
come his way have ranged from
scorpions to pigs’ ears, duck brains, tripe,
and even dog (“I only found out afterwards
what it was”). But the high point,
if one can call it that, was undoubtedly
a feast of snake. “The meat tasted good,”
Meyer recalls, “but then I had to toast my
opposite number with a glass of snake’s
blood …. .” Which shows the lengths
some people go to in order to close a deal.
Now aged 54, Peter Meyer has worked
for the Group in Asia since 1988. As Managing
Director of Salzgitter Mannesmann
International (HK) Limited based in Beijing,
he heads a team of 24 staff with offices
in Canton, Shanghai, Hong Kong
and Taipei. Business has been highly satisfactory
for some years now. In 2006,
Meyer’s team – in cooperation with the
rest of the Salzgitter Mannesmann International
Group companies – turned over
around 600,000 tons of steel for the international
market. The total for 2007 is
likely to be 800,000 tons. Such figures illustrate
both the current strong demand
worldwide, as well as the headlong development
in China’s burgeoning economy,
The Market in Asia A junk pictured
The massive upswing in the Far East continues to be headed by China. In terms of steel,
within a matter of a few years the country has developed from a net
importer to an exporter. Salzgitter Mannesmann International’s Beijing-based subsidiary
is also chalking up strong figures. We paid a visit.
which grew by 11.1 percent in 2006 alone.
We drove in from Beijing airport to
the office on the 8th floor of the modern
Sunflower Tower on Maizidian Street.
The city is surprisingly western in appearance.
Endless traffic jams (1,000 new
cars are registered every day in Beijing),
countless construction sites (ready for the
Olympic Games in August), noise, heat
and smog. Peter Meyer smiles a little sadly
as we drive: “When I came here for the
first time 20 years ago, it was an adventure.
There were very few western hotels,
no street lighting, all the signs were
strictly in Chinese – and when we went to
the zoo people stroked my little daughters’
red and brown hair to see if it was
real …”
Business, too, has changed dramatically
in the intervening years. China has developed
from a net importer to an exporter
of steel. Peter Meyer explains: “Up
to 2004, imports still accounted for more
than half of our business. A year later,
steel coming into China made up only
about a quarter of our trading volume.
The reasons are obvious – as the fourth
largest country on earth, China can satisfy
its own needs.” Back in 1988 China
was producing around 70 million tons
The Asia team with Peter Meyer (10th from left) on the Great Wall. The map on the right
shows Salzgitter Mannesmann International’s offices in Asia
of steel. By 2006, output had risen to 429
million tons, and the upward trend continues.
Faced with this situation, Meyer and his
team had to completely rethink their
operation: “Familiar customers we had
dealt with over many years just melted
away – so we struck up new contacts with
the steel makers’ sales departments.” It is
all the more remarkable that this dramatic
about-turn that climaxed in 2004 was
accomplished without a slump in business.
Imports were largely replaced by exports.
Time to call it a day. Peter Meyer shares
a table with longstanding colleagues Liu
Yan Haua and Victor Huang in the German
beer cellar across the street from the
office. They speak in English, as do all the
office staff. The waitress brings Bavarian
beer, roast pork and sausage. The place is
crowded, with far more Chinese raising a
glass than “long noses”, as Europeans and
Americans are known here. In the morning
Meyer is flying off to visit a steel producer
in Xiangtan, but for now he has a
moment to relax.
What do you need to bear in mind in order
to do business in China? Meyer, who
acquired his skills in the early 70’s at the
Salzgitter Stahl trading company in
Düsseldorf, before spending three years
working for the Group in London, doesn’t
need to think twice: “Someone once said to
me here in China, ‘Even if you cannot understand
one another, it is important to
maintain the correct facial expression.’ By
which he meant that when you are trying
to get a deal off the ground, it is important
in the first place to observe the correct formalities.
You have to be friendly, smile a lot
– and as far as possible don’t turn down
anything your host puts in front of you.”
Even if that includes scorpions …
Meyer continues, “The Chinese tend to
be skeptical and as a matter of principle it
is extremely important to earn their trust.
Once you have done so, you can look forward
to a long-term relationship.”
Negotiations are hard. “On principle,
Chinese producers try to gain the upper
hand.” A seasoned and savvy dealmaker,
Meyer is not to be outwitted, and he relies
on another characteristic of the Chinese,
namely their sense of fairness: “It is generally
enough for me just to remark that
we both have to be happy with the terms
of the deal.”
To this day, it is not unusual for Chinese
partners to deliberately conduct negotiations
at several levels of hierarchy. As
Peter Meyer explains, “When we are
buying steel, we have to make sure we
don’t start off at too high a price, so we
are able to give a little ground at every
level – right up to the boss who makes the
final decision. If we only accommodate
one of the negotiators on price, the whole
deal may come to nothing. Keeping face is
everything in China.”
The following morning at the steelworks
in southern Chinese city of
Xiangtan, Peter Meyer and his colleague
Laurence Chen sit down to negotiate
against the unrivaled
skyline of Hong Kong
prices for the months ahead. The plant,
which has been heavily modernized in recent
years and employs a workforce of
20,000, is one of the main suppliers to
the Salzgitter Mannesmann International
Group, producing sheet which is regularly
bought in for stockholders in Europe.
Before flying on to the Hong Kong office,
Meyer pays a quick call elsewhere in
the plant. Two Chinese employees of the
international certification specialist Bureau
Veritas are inspecting the quality of
a load of sheet destined for Indonesia.
“We are supplying 4,000 tons in total,”
Meyer continues. “The material will be
used in Indonesia to manufacture pipes
that in turn are needed to build a pipeline
in India.”
The trading activities of Salzgitter Mannesmann
Handel in China are centered
on four areas. Most important of all is the
business with Salzgitter Mannesmann In-
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