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Step III of YOFC's ‘Going Global’: Expanding into the African Market Aiming at ‘No. 1’

The long history, splendid culture, vast territory, rich resources and rejuvenated population structure of Africa fill this remote land with vigor and hope. The proposal of the ‘Belt and Road Initiative’ is prompting more and more Chinese companies to enter Africa and improve its infrastructure construction with innovative Chinese technologies and products, thereby assisting in the healthy and sustainable development of the continent.

As a leading company in the optical fibre and cable industry of China, in a positive response to the ‘Belt and Road Initiative’, YOFC has accelerated its pace of ‘going global’, launched a series of layouts in Africa and achieved impressive results. Recently, following the YOFC's ‘Quality Long March Campaign’, reporters from PPTN and CNII visited YOFC Africa Cable Co., Ltd. (hereinafter referred to as ‘YOFC Africa’) to gain a deeper understanding of its present operations, as well as the planning and vision of YOFC in the entire African market.

YOFC's ‘Quality Long March Campaign’ Research Group Visits YOFC Africa

The largest cable plant in South Africa was built in just over six months

The foundation of this project was laid in May 2016 and it was completed and put into operation in December 2016. In just over six months, YOFC built the largest cable plant in Durban of South Africa, which is known as the ‘best managed city in Africa.’ YOFC Africa refreshed the cable plant construction record of South Africa.

"YOFC completed a series of tasks such as foundation laying, plant construction, equipment commissioning and production in just more than 6 months. This is the fastest growing subsidiary of YOFC since its inception. As a member of YOFC, I'm very proud of this." Looking back over the birth of YOFC Africa, First YOFC Vice-President Yang Bangka was quite proud. He said that YOFC had originally planned to acquire a company in South Africa, but after nearly one year of investigation, he realized that the ‘greenfield investment’ in Durban would be to construct a new local cable company instead.

The shaping and landing of YOFC Africa in South Africa was a leap from scratch. YOFC Africa General Manager Pieter Viljoen revealed that in November 2015 the board of directors of YOFC officially approved the establishment of the YOFC Africa Project. Its foundation was successfully laid in May 2016, the plant was completed and put into production in December 2016, and it provided cables for its first customer in February 2017. In just over a year, YOFC Africa turned impossibilities into possibilities one after another.

Now, when walking into the Durban Industrial Park in South Africa, you can see YOFC Africa at a glance; the design-conscious office building, tidy office area, comfortable lounge and standardized workshop give people the feeling of modernization. One year ago, however, it was a different story. For any company, to setting up a factory overseas is not easy, and completing a 15,000 m2factory building and putting it into operation in six months is a tremendous challenge. "This benefited from the strong support of the YOFC Head quarters." According to YOFC Chief Financial Officer Peng Guotai, as the largest preform, fibre and cable supplier in the world, YOFC has extensive experience in the construction of cable plants with a complete set of ideas and solutions, and as a strong team. In the initial construction of YOFC Africa, the construction teams from China and South Africa had weekly meetings to discuss and solve problems.

"Considering the construction period, many projects of YOFC Africa were carried out simultaneously. The plant is still under construction here and the product line has been commissioned there." Talking about the construction process at that time, YOFC Africa Technical Director Qi Lin revealed this information. The successful operation of YOFC Africa cannot do without the strong support of the technical team. Under the coordination of the YOFC Headquarters, YOFC Africa sent eight technicians locally recruited from South Africa to the YOFC Headquarters in Wuhan in August 2016 for one-month training in cable technology, equipment maintenance and production management. Qi Lin then led these technicians back to South Africa and started commissioning for the production equipment of YOFC Africa: "In the beginning, the plant had no normal power supply or equipment commissioning; even the computers were required to use a generator, and the initial use of a small mobile air compressor required the replacement of relevant equipment. Fortunately, however, the domestic and foreign technicians were able to communicate well with each other and work closely together to work overtime and solve problems in case of emergencies."

A Brave and Skillful Localization Team

A strong localization team is also the secret of YOFC's rapid landing in South Africa. "We want to have the people of Africa know that the plant is actually operated by Africans themselves, and people of all colors work together here." Yang Bangka made this statement to elaborate on the understanding of YOFC regarding localization, and to also let the reporters feel the determination of YOFC to promote localization.

YOFC has a ‘different’ understanding of localization compared with many other companies. As we all know, enterprises setting up companies overseas are more likely to appoint their own management team. However, Viljoen said that instead of using this popular approach in South Africa, on the basis of its 20 years or more of experience and rich network of contacts, YOFC chose to trust them to establish a localized management team for YOFC Africa. As a result, YOFC Africa has quickly settled down, developed customers and occupied the market with a full understanding of the local culture, market needs and relevant laws and regulations.

When the reporters asked about the extent of localization of the management team of YOFC Africa, Peng Guotai answered with a smile, "As you can see, in the entire management team of YOFC Africa, only Qi Lin and I are from China." Although such a configuration has made the Chinese delegation a bit ‘weak’, Peng Guotai believes that this makes the management team of YOFC Africa more inclusive and cohesive: "I'm mainly responsible for finance, but the daily work is not limited to this, and many times I’m more likely a 'green channel' between the domestic headquarters and local management team of YOFC Africa to promptly communicate with the management team and provide sufficient resources when YOFC Africa needs support. Similarly, YOFC Africa also feeds information and resources back to the Headquarters."

This highly localized team brings outstanding strength to YOFC Africa. Viljoen made a further elaboration on the importance of localization, telling us, "As locals, they definitely know more about the market and environment. The localized management and staff can serve local customers and understand local cable technologies much better. Moreover, only localized management teams know how to hire local employees and fully mobilize their enthusiasm."

In fact, the market has proven that this was the right choice. As YOFC Africa Marketing Director Chris Du Preez told us, "If the production capacity target can be successfully achieved by the end of this year, YOFC Africa will occupy about 50% of the market in South Africa." He also revealed that although it is less than a year in production, YOFC Africa already has more than a dozen customers in South Africa, including operators and non-operators. It is particularly worth mentioning is that YOFC Africa has just successfully passed the certification of Telkom, the largest operator in South Africa, and the cooperation between the two parties is in full swing.

Superior Quality Helps YOFC Africa to Pass Two One-time Certifications

‘Quality’ is an important element of YOFC's core values. Similarly, ‘quality’ has also become synonymous with YOFC Africa.

The quality management system of YOFC Africa can monitor and control the entire production process.

Just a few days prior to this visit, YOFC Africa set a new record in South Africa bypassing the one-time certification of Telkom and the ISO9001 Quality Management System. "As the largest operator in South Africa, Telkom has 'harsh' requirements for its partners, and the latest version of the ISO9001 Quality Management System certification was also a real test for the Company," Qi Lin said. Under normal circumstances, the certification of operators only involved the products, while the Telkom certification not only tested the products but also certificated the product processing and quality management system. "In certification, from raw materials to processing operations, and finally to the test site, Telkom must witness these processes; there is no such rigorous certification in China." In order to pass the latest 2015 version of the ISO9001 Quality Management System certification, YOFC Africa spent more than four months completing the establishment of related systems, and finally successfully passed the certification.

"The stringency of Telkom certification is well-known in South Africa," Du Preez, with 26 years of local experience, said. "As a new company, it wasn’t easy for YOFC Africa to pass the one-time certification of Telkom and also pass the one-time ISO9001 Quality Management System certification, which is 'rare' in South Africa. This proves the strength of YOFC Africa to the entire market, and especially the quality of its products." As the Marketing Director, he was very proud and happy because this will effectively enhance the visibility and recognition of YOFC Africa in South Africa and boost its further market expansion.

In the past 29 years of development, ‘quality’ has been integrated into the genes of YOFC. In the process of entering the South African market, YOFC successfully passed this ‘quality’ gene to YOFC Africa. As Qi Lin told us, "YOFC Africa has introduced a full range of technology, equipment and test equipment from the YOFC Headquarters. At the same time, it has also introduced the systematic management system and established its own quality management system combining the characteristics and needs of the South African market."In order to fully guarantee the quality of its products, YOFC Africa not only established raw material admission inspections but also conducted controls and tests for the key indicators of cables in each process, as well as the testing of the final product. "YOFC Africa even has strict control over the packaging and shipping of its products, and all of these measures ensure the quality of the cables to a great extent."

As YOFC Africa technician Velile Mngonyama explained in an interview, "From the very first day I entered the Company, I felt the emphasis on quality. We have strict quality control over every aspect of production. In the morning meeting every day, the most discussed topic among the engineers is how to ensure quality and improve the process."He added that he is proud to be a member of YOFC Africa.

‘Keep improving and ensure excellent quality’ is the quality value of YOFC. YOFC Strategy and Marketing Department Manager Zhou Qinmin said that quality for YOFC not only covers product quality but also includes many other aspects such as process quality, work quality, system quality and operation quality: "In terms of quality, YOFC pursues the integrated performance of the organization and will make unrelenting efforts on the road to excellence and quality."

The great importance attached to quality brings practical impetus to the development of YOFC Africa in South Africa. "In South Africa, a construction contractor used cables produced by YOFC Africa, a local manufacturer and an overseas supplier in his project. He finally found that the cables produced by YOFC Africa had far fewer problems than those of the other suppliers. The contractor eventually chose YOFC Africa as its sole supplier." In an interview, Du Preez shared this case and added that due to the confidence in the quality of cables produced by YOFC Africa, some customers now directly use the cables of YOFC Africa as their first choice when launching projects.

Basedin South Africa, Radiating Through Africa

Regarding the future goals of YOFC Africa, Yang Bangka described them as follows:"Today, YOFC Africa has become the leading player in South Africa. In the future, YOFC Africa will be committed to becoming the leading enterprise in Africa as a whole." He added that the layout of YOFC Africa is the process of YOFC in Africa as a whole. The construction of the cable factory in Durban was just the beginning. In the future, based on the needs of the African market, YOFC Africa will further expand and radiate its businesses to the whole of Africa.

The demand for cables in South Africa and all of Africa will continue to grow. "In the next 2-3 years, YOFC Africa will continue to expand its production according to market demands, and is committed to becoming the No. 1 cable supplier in sub-Saharan African countries, providing high-quality products and services to a large number of customers. In the next 3 to 5 years, YOFC Africa will consider starting new projects if the market continues to improve." In Viljoen's opinion, the layout planning of YOFC Africa in South Africa and the entire continent is a systematic engineering plan which is moving forward steadily.

The development of the fibre and cable industry is closely related to the population; the denser the population, the greater the demand. "There is a lot of room for population growth in Africa, South Africa's GDP continues to grow and the investment environment is good." Peng Guotai believes that the development of YOFC Africa has just begun and there will be more work to be done in the future. To become the No. 1 fibre and cable company in Africa is the goal or even the mission of YOFC Africa.

Any market development should be planned and implemented step by step. In the face of South Africa and the African market, YOFC Africa has clear goals and plans: "South Africa is a vibrant market. As the demand for communication grows, new demands will arise in the fibre and cable market of South Africa and the entire continent." These words of Du Preez made the reporters believe that now is just the right time for YOFC's layout in Africa.

Today, the internationalization of YOFC is accelerating. As Yang Bangka told us, "With its close attention to the ‘Belt and Road Initiative', YOFC will accelerate the overseas deployment at its core, and there will be more overseas YOFC factories." With the advancement of internationalization, the proportion of foreign employees in YOFC is constantly improving in recent years: "In the future, YOFC will have more employees of different colors from different countries and different cultural backgrounds." YOFC is not just a Chinese company, it will take root in different countries and become an open and vigorous international company.

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