Given that Asia Pacific accounts for the bulk of the world’s population and some of the fastest-growing economies, Danish pump manufacturer Grundfos has announced a new structure to reinforce its market position for sustainable and profitable growth in the region.
The Asia Pacific operations will now come under four geographical clusters: East Asia, South Asia, Oceania, and Indochina. The reorganisation aims to improve customer centricity with a stronger focus on local requirements, strengthen business efficiencies with better resource allocation, and increase market competitiveness with better economies of scale.
The East Asia cluster comprises Japan, Korea, the Philippines and Taiwan; South Asia covers Indonesia, Malaysia and Singapore; Australia and New Zealand comes under Oceania; while Indochina will spearhead business activities in India, Thailand, Vietnam and other emerging markets such as Bangladesh, Bhutan, Cambodia, Laos, Maldives, Myanmar, Nepal and Sri Lanka. The Asia Pacific Regional (APREG) headquarters remains in Singapore.
Effective May 2015, the new structure considers the commonalities in technological requirements, as well as cultural, demographical profiles that exist within each geographical cluster. As such, it will allow Grundfos to concentrate on opportunities and challenges that are unique to each cluster.
“In Japan, Korea and Taiwan for example, where pumps run on 60Hz electric motors, it makes sense to localise the engineering expertise for our 60Hz product range, so as to reap better operational synergies and deliver more agile technical support to our East Asian customers,” says Mr Okay Barutçu, Grundfos’ Regional Managing Director for APREG.
With resources dedicated to the needs of each geographic cluster, Grundfos is expecting to do more in the region for the region by expanding on product range, and increasing assembly and production facilities for local requirements. “What this means is better availability of product and information, improved support and services, swifter response time, and a deeper understanding of local challenges that will translate into pump systems and water solutions that are relevant to our customers,” he says.
Today, Grundfos operates 12 sales companies, 13 production facilities, and local offices in 22 countries across APREG. According to Mr Barutçu, Grundfos has the most extensive APREG presence amongst peers. “We’re pioneers in APREG, and many of our local companies have been here for 20 to 30 years. But beyond that, our customers know they have access to 70 years of Grundfos global experience each time they put a call through. We’re aiming for a service level that comes with full assurance and peace of mind,” he adds.
Becoming more efficient and agile
With the reorganisation, back-office functions such as finance, accounting and HR will be centralised for improved resource allocation. Supply chain management will be further optimised to provide a stronger competitive edge. These strategies will enable Grundfos APREG to secure its cost base while fostering collaboration across functions and geographies through a culture that is customer-focused, cost-conscious and responsible.
The new structure will also encourage employees to expand their horizons in terms of roles and responsibilities and acquire new competencies. “To execute our strategies and drive the next lap of growth, strong and experienced teams are extremely critical. People development and capable leadership are important focus areas,” says Mr Barutçu, explaining why local General Managers were appointed to helm the new clusters as Area Managing Directors.
Gearing for sustainable and profitable growth
Besides the new organisational structure, diversifying the customer base and offering a wider range of solutions and expertise is another key enabler to broadening revenue streams under each cluster. Mr Barutçu shared that Grundfos will be focusing on the emerging middle-class and commercial and domestic building segments, while intensifying its drive on energy-efficient products and water utilities for flood control and water-treatment applications.
There are also plans to elevate aftersales services into a business in its own right – where maintenance service contracts, pump audits and energy checks, replacement, upgrading and commissioning services offer fresh opportunities for business growth.
A promising outlook
Grundfos is looking to double revenues in APREG over the next five years. With the reorganisation, Grundfos India will now report under the APREG structure. In addition, the company has recently initiated a partnership with JJ-Pun, its appointed master distributor in Myanmar. In the short term, it will be working towards a sales office in Sri Lanka, and a local presence in Bangladesh and Cambodia.
“With 70 years of global expertise and experience behind us, and the stronger organisational alignment that’s now in place, I am confident that we will ride the opportunities and challenges to achieve continued growth,” Mr Barutçu concludes.