Searching the colossal Asian market for suppliers can be challenging and time-consuming, but thanks to Premier Connect, a business matching service offered by the Hong Kong Trade Development Council, Advantage Air sourced suppliers and had production up and running in no time.
Perth-based air conditioning company Advantage Air has come a long way since starting out 12 years ago as a wholesale business with a team of three.
When the company began manufacturing components for air conditioning systems, Walter Kimble, the company director, had no idea it would grow to the size it is now, with branches in Sydney, Melbourne, Brisbane and Adelaide, as well as three more in South Africa. "And now, instead of just selling components, we sell the whole air conditioning system," says Kimble.
Australia’s manufacturing sector is less technically advanced that its Asian counterparts, which means Advantage Air outsources some of its production overseas. Working out the best way to go about it, however, was a long and expensive lesson.
The Supplier Challenge
Four years ago the company developed an electronic system to control temperatures in every room of the house. The remote control, however, wasn’t compatible with foreign-made air conditioning units or even updated Australian-made ones.
"That’s when we decided we needed to make our own air conditioning unit," says Kimble. With China as the manufacturing hub of the world, Kimble decided that's where he needed to get the units made. Sourcing suppliers began with endless searches on the internet and several trips to China, Taiwan and Thailand to meet with manufacturers and suppliers.
"We churned through them," says Kimble. "It took us an awful lot of time to find anybody who was willing to do what we wanted and could meet Advantage Air’s specifications and standards' requirements."
A Different Approach
Focused on finding suppliers in China, Kimble admits he never really considered Hong Kong as a source of potential business partners. "We knew a lot of the manufacturing was done in China, and we thought Hong Kong was more of a commercial banking centre."
This all changed when he attended a Hong Kong Trade Development Council (HKTDC) seminar last year in Perth. "The HKTDC certainly opened our eyes to more specific opportunities in Hong Kong." In particular, he was introduced to the HKTDC’s Premier Connect service, designed to help companies locate suitable Hong Kong business partners. His initial concern was how much the service would cost. "But when we made the enquiries and they came back and said it was US$100, we thought, ‘Wow, we’ve got nothing to lose’."
Kimble’s first step was to fill out a form explaining what the company wanted in a business partner. This, he says, was the most important part of the process. "If you put very little or very general information on the form, you’re not going to get such a good result. But the more details you include, the better chance you have of finding a good match.
"We were mainly looking to have some electronic components made over there, especially the high-volume ones."
Within a few weeks of sending the form, Kimble received a list of three companies that matched his requirements, along with a description of their capabilities and what they could do. Kimble contacted each of them, then went to Hong Kong to visit the companies and their factories to see what they could do. In particular, Advantage Air was looking for a manufacturer to produce the wireless light switch it had developed, which controls lights and air conditioning in a room. Of the three companies provided to him by the HKTDC's Premier Connect, Kimble selected a well-established Hong Kong company with impressive credentials.
Asked about the key elements in choosing a business partner, Kimble says he first met with the company's senior management and was impressed that they were happy to introduce their production team to him. "We said we wanted to come back the next day and speak with the team that would be working on this. So they got their team together, including the engineers, technicians, moulding people and electronics people. We sat in the boardroom and talked about the product, and the ideas flowed freely. They gave us a lot of good input, and we could quite quickly tell that their team had good experience and knew what they were talking about. We got a good vibe from them and felt like we could work with them. Their pricing was slightly lower than the other companies as well, but what we really liked was the contact with the people at the coalface."
Since then, Advantage Air has also engaged another of the Hong Kong companies recommended through Premier Connect. "The other company was given the job of producing a little wireless temperature sensor for our GenIII system, and they’re in the process of making the first production of those for us. So we got two out of three, which is good," says Kimble.
The HKTDC’s Premier Connect service saved Kimble time and introduced him to reputable companies. "We were put in contact with companies that had experience, that were already manufacturing for some pretty big names. It gave us comfort knowing that they had good quality standards."
Protecting his company's intellectual property was equally important. "Both of the companies we’ve gone with went to great lengths to show us their procedures on the protection of IP, and how they protect it internally in their own company."
Kimble says he’s gotten his money back for the Premier Connect service many times over. "When you do lots of trips to China—three years ago we were going there every six weeks for a week—it adds up, so it’s quite nice to be able to shortcut that whole process."
Production began in August, and Kimble says this is just the beginning of a long relationship he hopes to have with the two recommended suppliers. "The first manufacturer has already quoted on two or three other products for us. That was one of the reasons we chose to spread the work across the two companies. We wanted to build relationships with two companies to find out their strengths and weaknesses, so that when we’re looking for a supplier we can give the appropriate job to the appropriate supplier."
Asked if he would use the Premier Connect service again, Kimble says "absolutely". In fact, he recently recommended the service to a relative planning on travelling through China next year to source suppliers. "I said, ‘Don’t waste your time. I’ll give you the HKTDC’s phone number’."