German industrial conglomerate plots PH expansion plan

FROM left: Martin Hayes, President, Managing Director – Robert Bosch (Southeast Asia) Pte Ltd; Peter Tyroller, Member of the Board of Management – Robert Bosch GmbH; Andrew Powell, Managing Director – Bosch Philippines

When one thinks of German companies in the Philippines, automobile firms like Mercedez Benz, BMW or Audi probably come to mind. Or perhaps industrial and consumer chemicals manufacturer Bayer, or maybe even engineering and communications firm Siemens.

But a company like Bosch—which has been in the country for two decades now—is probably not top-of-mind for most consumers.

That may be about to change, if the firm’s top brass will have its way.

Recently, Robert Bosch GmbH management board member Peter Tyroller flew in to rally the company’s local troops to their new goals, and also join them in celebrating the 20th year of the German industrial giant in the Philippines.

He spoke to the media and outlined wide ranging plans for the firm both in the country and around the region, especially in the light of the dynamic economic activity being experienced locally.

More interesting

“Asean is getting more interesting because there are a lot of big things going on here,” Tyroller said, referring to the 10-member-nation Association of Southeast Asian Nations, which is in the process of forming an increasingly tighter economic union.

“Talk about more than 600 million people here—that’s a huge market. There’s a fast-growing middle class in this region. Since we are also underway to develop mid-priced products for the mid-priced segment, we are now prepared to cover the potential in the future,” he added.

The Philippines is of particular interest to Bosch, he said, because it is a market of roughly 100 million people that is experiencing an economic rebirth of sorts.

In recent years, the local market has become more affluent to the point of being able to afford more of the premium products that Bosch sells, instead of relying on cheaper alternatives in the past.

“Our philosophy is invented for life and our expectation is we fascinate with our products and we make price-competitive products for market-related products,” said Bosch Philippines managing director Andrew Powell. “And our idea is to have that throughout the Philippines not just in Manila, but also in our business hubs in Cebu and Davao and we want to provide our products and services to all Filipinos.”

“We have a very strong market share in power tools already in the Philippines and that continues to grow exponentially,” he added. “We are already here with automotive products for our automotive aftermarket [products]. We recently launched security systems organization that’s promising to be a very good growth area for us here in the Philippines.”

BOSCH POWER. From left: Tyroller, Hayes and Powell.

Because the rising economic tide has lifted the boats of more Filipino consumers, so to speak, Bosch is now taking a closer look at its wide portfolio of products to assess which can be introduced into the local market.

Wide portfolio

“We have a very wide portfolio. So we take a look at that, we take a look at market potentials and then we decide how to expand our footprint for that,” Powell said. “That will be our real focus.”

Already, Bosch—which is not publicly listed, but is instead the world’s largest privately owned corporation with 49 billion euros in revenues and over 280,000 employees worldwide at the end of 2014—is looking at making a bigger splash in the Philippine market.

“The big projects, we are a part of it,” Tyroller said. “We are not trying not just to sell a specific product; we are trying to even sell some solutions for public projects. Or we have big projects like the [Philippine] Arena and we have the loudspeaker systems available for [that] projects. And we have the power tools to build them.”

The company’s broad spectrum of products and services—from the automotive sector to consumer goods—allows it to employ an effective cross selling strategy in all the markets where it is present.

“We try to bring not just one division in such a project,” Tyroller said. “We are trying to have one approach that has various divisions providing the right components, the right systems and the right product for those big public projects.”

At the same time, Bosch is also making the most of the world-class Filipino talent pool that is available to it. The company has a business process outsourcing hub based in the Philippines that services the company’s foreign operations and customers, both from within the sprawling Bosch industrial conglomerate and without.

And it is here, in the services sector, where the Bosch executives are most excited for the Philippines vis-a-is the upcoming integration of the Asean markets.

“Asean economic community is important,” said Robert Bosch Southeast Asia president Martin Hayes. “We manufacture the majority of our automotive components in Thailand, we just started in Indonesia and we also have in Malaysia but once there should be zero tariffs around, that would definitely ease the products bringing in to the market.”

Free movement

In particular, the growing Bosch conglomerate is interested in seeing freer movement of labor among the various Asean nations.

“I think there’s a lot to do there,” Hayes said. “I hear in Singapore they are 70 percent completed but I think some of the first thing they need to do is, free travel of Asean members within Asean to aid them basically, and for us, that we can put people in to the right place where we need them within Asean.”

To better compete with its neighbors and to be better able to spread the benefits of economic growth around, the Bosch executives agreed that the Philippines had to work more on improving its infrastructure systems.

PETER Tyroller addresses the employees of Bosch Philippines.

“[Infrastructure] is one of the critical issues,” Powell said. “I’m looking at the positive side—the domestic growth of consumption here in the country’s where we’re really focusing our efforts because there we see the potential to grow business.”

“The challenges are being fast enough to have our footprint, to have people on board, to get the right people, train the right people, and to build up an attack and trade these businesses into the future,” he added. “I don’t want to mention the traffic, of course, and I also want to mention the language capability. [We have] very competent people here in the Philippines with semiconductor production and that is also another aspect here in the Philippines where we have sub-contractors who are providing the Bosch Group with semiconductors and electronic components which is growing dramatically. We are tapping into that capability also in the Philippines.”

If the company’s plans unfold according to plan, it is not inconceivable for Bosch to join other top-of-mind German brands for Filipino consumers in the not too distant future.