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Sub-forum 2 Topic 3: Talent Strategy and Localization of Overseas Cooperation Zone

  China-Indonesia JuLong Agricultural Industry Cooperation Zone

  Mr. Qiu Aimiao, Director of Public Government Purser Department of Tianjin Julong Group Ltd. (sound recording)

  Hello, dear teachers and students! I am the director of the public government purser department of Tianjin Julong Group Ltd., and then I’d like to share our experience in talents reserve management and other aspects.

  My introduction is divided into three parts, and the first part and the second part are actually some self-reported relevant circumstances of our company. Julong Group engages in joint processing in China, with the market scale of 22% among the domestic enterprises, and we focus on palm oil subdivision. Somewhat similarly to Polaris, we were forced to go global. For the palm oil industry, the domestic environmental factors do not have the production conditions and basically China depends on imports and China is the second largest importer second only to India with the annual imports of more than 6 million tons. Therefore, the two best profits parts of the industry’s smile curve are upstream planting and downstream fine processing, but both are not in our country. From this, our company experienced several major ups and downs of the oils and fats industry, and finally we were forced to go global.

  For example, the price of palm oil rose to more than 14,000 during the financial crisis in 2008, and it fell to the lowest level-only more than 4,000 last year. A lot of enterprises that grasp the upstream resources, especially some companies belong to A, B, C, D categories, and even the Southeast Asian palm oil giant would rather breach the contract, he said directly to pay liquidated damages. When the price rise cycle comes, the giant would rather give up even if he will bear the liquidated damages. In addition, many domestic industries engage in financial investment, most industries, especially the processing trade are basically in the upside-down status, so we started the foreign investment cooperation in 2006. In fact we are engaged in the development and cultivation of oil palm. At present, our total area is 200,000 hectares in Indonesia. There are eleven plantations, most of which are located on one island, and still one is located in Sumatra port and two matching parts are located at the international terminal, with the total overseas assets of 1.5 billion US dollars. In 2013, the country’s foreign economic and trade cooperation policy underwent a major adjustment, and after the adding of the agricultural processing type, we asked one Chinese company to do the overall planning consulting to adjust the overseas operation mode, using the form of the platform + professional company, i.e. we re-sorted out the resources organization mode of foreign economic and trade core. We are still primary school students in this field, and on August 4 last year it was officially approved as agricultural economic and trade industrial park. There are 14 enterprises in the park, with the total industrial land of 3.23 square kilometers and the entire park investment of more than 100 million US dollars.

  Here I focus on our experience in the localization management. Create the management structure, pay attention to personnel training, to build an international management team. Firstly, establish a management model with Chinese characteristics. Take the co-management model of our military for reference to create 1: 1: 1 model, i.e. regimental commander + political commissar + chief of staff. We employ the local qualified senior manager to serve as the regimental commander, responsible for the operation and cooperation of the plantations; assign the domestic management personnel as the political commissar, responsible for comprehensive management and coordination; and appoint the Southeast Asian Chinese who can speak Chinese and Indian proficiently as the chief of staff, responsible for auxiliary decision-making and communication. For key gentlemen, i.e. the executives in the industry, we appoint those who have experience in oil palm planting. We have formed such a management model.

  In addition, we pay attention to the training of foreign employees. There are two training courses each year, one called Golden Palm and another one called Ivy. Ivy training courses are mainly for Indonesian employees, usually with six months of training in the local area and then test in China. Our first training course was held at Nankai University, and the one-year training program was conducted to enable them to learn Chinese, Chinese culture and corporate culture. Golden Palm training courses are generally for Chinese expatriate employees. After six months training in China and then passing the exam, they will be sent to Indonesia to work. During the training, they will get the rigorous assessment training and the language test must be firstly passed. The second aspect is to bring the benefit for the local people and respect their traditional culture, especially their local culture. This may be the main difference between agricultural projects and industrial projects and other trade logistics projects. The places we choose are far less developed, because the developed areas can not engage in agriculture. Basically the regions belong to the economically underdeveloped areas, so firstly we shall actively bring the benefit for the local people, attract the local to obtain employment, and formulate the development the competitive salary system.

  For example, the construction of our first plantation was started in 2006 and completed in 2011. The workers are basically the local villagers, and we call them the forest residents. Before the indigenous development, there was basically a virgin forest, isolated from the outside world, and the income level of residents who mainly earned a living by hunting and fishing was very low, with the yearly family income of no more than three thousand Yuan. After the plantation is completed, these industrial workers in the park obtain more wages, and basically their monthly wages can be more than three thousand Yuan if both husband and wife work here. It is more obvious by such comparison. In addition, we put a lot of money to mend road and build bridges, including the improvement in electricity, roads, hospitals and other public facilities. Indonesia is the world’s largest Muslim country; most of the people have the Muslim belief, and basically say prayers for five times one day. In order to respect such local religious customs, we also provide the space for prayer, including some supporting facilities in the office and dormitory area.

  The second aspect is to respect the local cultural practices and establish the environment division, similar to the public relations department in China. The division is specifically to deal with state relations, up to the President, down to the village elders, and there is some regular communication with them. Especially when it comes to the early development of the plantation, it is particularly important.

  The third aspect is to deal with conflicts of public relations properly. At first we had a lot of lessons written in blood. In case of land acquisition, there is a very large gap between the local cultural habits and that in China: after the local government sells the land to you, it will wash its hands of the matter, i.e. basically all the rest things will be handled by yourself, including the later compensation and the communication with villagers. The local villagers belonged to the forest residents, their education level was relatively low, so the conflict contradictions were frequent, and the roads were frequently closed, and some took the gun and machetes to come to our location. Later, we have also developed the relevant measures in this regard, and established the professional team to deal with such things. What’s more, in this process, especially in case of land compensation, basically every villager needs to register, sign the name, leave fingerprint and take photography. Therefore, we have established a set of system for such matters.

  In addition, we keep regular communication with the local county magistrate and police chiefs, and especially we resolved the storm for several times with the Muslim elder through religious rituals.

  The above is the brief introduction to some of our experience and exploration in the localization management.

  (The above content is combed according to live recording, with no confirmation by the keynote speaker)

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