Sustained Performance

First established as a Singapore sales office in 1977 for Mitsubishi Electric of Japan, Mitsubishi Electric Asia has grown to become the regional sales and marketing hub for activities across Singapore, Malaysia, India, and other Southeast Asia regions, for a wide variety of businesses, including Factory & Industrial Automation, Living Environmental for Air-conditioning, Refrigerator, Solar Power Panel and Videowall display.

C H Tan (right), director, and Francis Cheng (left), general manager, are two of the main figures in the Industrial Automation division, which supplies Factory Automation (FA) products such as PLCs, Inverter/Drives, Servo Motion Systems, HMI Panels, and Low-Voltage Switchgear to factories, utilities plants, and commercial buildings

Q: It has been tough year for many automation suppliers. How has Mitsubishi Electric weathered the storm?

A: The first impact on our business from the economic recession was felt last October. In addition, we had to deal with the problem of the Singapore dollar weakening against the Japanese yen, which made our products more expensive since they are mostly manufactured in Japan.

Fortunately, we had a lot of buildingindustry orders from before the crisis hit, and these have managed to see us through and so we have not been that badly affected. In addition, there has been a notable pick-up on the factory automation sectors since June this year, especially in India and Malaysia.

Q: Which products are targeted for the building industry?

A: It’s mainly our inverters (variable speed drives) and air-circuit breakers (ACBs) used for the building HVAC systems. In Singapore especially, there has been a lot of government-initiated construction activity such as the Integrated Resorts (IRs) for Marina Sands and Sentosa, and the Marina Bay Financial Centre (MBFC), which we have benefited from. For instance, we have a contract for several million dollars to supply our F700-Series Inverters to the IRs. Energy efficiency is becoming an increasingly important area, and we are getting more and more requests from customers on how they can achieve on energy savings.

Q: Which are some of the other key verticals that you are focusing on?

A: The municipal water industry and utility power are two significant ones. We have won a number of projects in these sectors in Singapore, Malaysia, and Indonesia. Other verticals worth mentioning are the semiconductor sector in Singapore, and the automotive industry in India. We have identified the oil & gas industry in Malaysia and Indonesia for future potential Process Automation (PA) business.

Q: Is India a significant business area for Mitsubishi Electric Asia?

A: Yes, it certainly is. We now have two offices there, which report in to Singapore, and revenue has been increasing every year – about 30 percent on average. India now contributes a 40 percent share of our total business.

Q: As primarily a sales and service operation, could you describe your go-to-market strategy?

A: We have a 70/30 split, with 70 percent of business conducted through channel partners – i.e. distributors and system integrators, and the other 30 percent being direct. Broadly, it is the factory automation side that relies heavily on the use of channel partners.

For process automation – water, power, etc, and infrastructure sectors – transportation (MRT) or tunnel for expressway (LTA), we identify strategic accounts and tend to go with strategic partners or with our own resources.

Q: What is your approach towards channel partner selection and development?

A: In total, in Southeast Asia and India, we have about 20 partners, and many of them have been with us for more than 10 years. We prefer to engage partners that do not carry competitors’ products, and we provide comprehensive sales and product training.

Although we review their business every quarterly, we definitely do not take the hire and fire approach, like some other companies. Instead, we aim to promote a spirit of cooperation and understanding with a view to forming a long-term, win-win relationship where we can both profitably grow together.

Q: Could you highlight some significant recent product releases?

A: The FX3G is one. This is a compact PLC targeted at machine makers, and which aims to compete with the likes of MicroLogix from Rockwell Automation. We do keep an eye on what our competitors are doing, and in the PLC business, particularly on Rockwell and Siemens.

Then there is the GOT1000 platform, an evolutionary family of high performance Graphical Operator Terminal (GOT). This new platform looks to combine performance, graphics and functionality in a very compact and robust package. And there are many others, such as Data Logger Module, 1.5-axis Servo Motion System, and CC-Link IE (1Gbs) Network.

Q: You seem to have been putting a lot of efforts into brand building. Are you seeing results from these?

A: Yes, we believe we are. You should remember that unlike other automation companies, the Mitsubishi Electric name appears on consumer products like refrigerators and air-conditioning units, and many people were not aware of the industrial side of our business.

So that is why we have spent considerable efforts in highlighting our automation solutions and products applications – on media (CNBC and Channel NewsAsia) and in newspapers (ads), as well as in the more usual trade magazines and exhibitions. So definitely, many more people now understand this side of our business, and appreciate that we offer a lot more.

Q: Working for a Japanese company, what are some of the cultural characteristics you have observed?

A: Relationships are very important in Japanese companies, and the overall approach is much more “patient” than in the Western model of business, which typically adopts a much more short-term attitude. We treasure our relationships with customers and with business partners, and as previously mentioned, we would strive towards mutual gain, rather than success at someone’s expense.

Q: What type of people do you look to hire to work at Mitsubishi Electric Asia?

A: People that can fit into the culture just described. We want them to be happy and successful so that they grow together with the company. But we have a noticed a trend with some of the recent graduates that have come for job interviews: they seem to focus on what they can gain from the company rather than what they can contribute. This is different, really different, from the attitude of the older generation.

Q: Finally, your thoughts on the business outlook for Mitsubishi Electric Asia?

A: Although not all sectors will rebound at the same pace, overall, the picture is one of sustainable recovery and growth. Year-onyear, we are looking at 20 percent growth for the financial year (ending March 2010), which will bring us back on par with our performance in 2008.