It is often difficult to choose between an international or local supplier for your products in China. The multinational corporation may have the quality guarantee, but the local company may know and understand you better. For Sinoref Holdings, it has the best of both worlds when it comes to the production of steel flow control products on the mainland.
“When compared to our international counterparts, our products are of similar quality, but we have the advantage of a local culture and background,” said George Tam, chief financial officer of Sinoref. “When compared to our local counterparts, although we have similar setups and relationships, we are definitely ahead in terms of technology knowhow and product quality.”
Since joining Sinoref at the beginning of 2010, Tam has brought an international touch to what he believes was a typical local Chinese company at the time of his appointment. For instance, he was responsible for preparing Sinoref for its listing in June last year. In the process, Tam had to flip "the company inside out” so he could set up the necessary internal control systems and finance teams.
Sinoref caters for steel manufacturers on the mainland with its high-end steel flow control products that include stoppers, ladle shrouds and tundish and subentry nozzles, which are all essential consumables in the steel manufacturing process. The company was incorporated in 2005 and began selling its products in China two years later. According to Tam, Sinoref commands around 30% of the high-end steel control flow product market share in China after just four years.
“One reason we have become a leader in the high-end market is because we have used our advanced technology knowhow to design and produce highly customised steel flow control products to meet steel manufacturers’ specifications,” Tam explained. “It is less difficult to produce low-end products, but producing highly customised high-end products [larger in size and more complicated in shape] is a different kind of ball game.”
The company is quickly becoming the supplier of choice for many of the mainland’s steel manufacturers because of its mixed international and local profile. Its products are also highly durable and are designed to withstand the 1,600 degree temperature of molten steel for extended periods. Sinoref is already in negotiations with steel product dealers in Europe and is looking to expand cross-border in Asia.
“Our target for the upcoming two years is to explore the relevant channels to penetrate the Korean and Taiwan markets,” said Tam.
With a track record of just four years, Sinoref is already operating at more than 90% of its annual production capacity of 8,200 tonnes. By the second half of this year, annual production capacity is expected to more than double to 16,800 tonnes. Although almost all of Sinoref’s sales are currently generated in China, Tam believes it is important for the company to venture cross-border.
“We would like to diversify our market network to strengthen our sales and to reduce market risk,” Tam explained. “In five years’ time, we aim to achieve 20% of our aggregate sales from overseas customers.”