Chasing the Dragons tail!

Team news

AuthorMBM

China’s Premier Trade Exhibition

Visiting the land of the Dragon (and walking 31 kilometres looking for its tail…)

Featuring an impressive 1.18 million square meters of exhibition space, occupied by more than 24,500 exhibitors and held in 3 phases twice annually, the Canton Fair in Guangzhou China must rank high, if not the highest, in terms of size and scale of trade and commerce exhibition events in the world.

It is renowned the world over as China’s premier Import and Export Trade Exhibition fair and caters for a diverse range of industries ranging from vehicles and spare parts, through garments and shoes all the way to building materials and medical equipment, and everything in between. If it is manufactured in China and available for export you are virtually assured to see it at the Canton Fair.  

MBMpl’s Johan Bornman attended the 118th edition of this event over the weekend of 17-18 October this year held in Guangzhou, China. As a first time visitor to China this was a good opportunity for cultural immersion and experiencing the sights, sounds and flavours of Australia’s business partner to the north.

“As a, now fit, Quantity Surveyor ( 31 kilometres walked over a two day period at the fair…. ), I found the exhibition booths for construction related materials and equipment particularly interesting. The exhibitor’s knowledge of their products, their willingness to listen and engage with a potential customer base and the quality of the products on show were just three of the many highlights of the trip”.

With the current high volume of building product trade from China to Australia, the exhibitors were well versed in the Australia-specific industry regulatory standards and approvals required for the use of imported building materials on project sites in Australia. Minimum order quantities, referred to at the trade as MOQ, was also not as high as expected. Again, showing a true willingness and intent by the manufacturers in China to do business with the rest of the world.

MBM’s is focused on servicing and constantly expanding our client base in Australia by providing  clients with accurate and relevant construction related cost data within an ever-changing development landscape. This trip delivered a unique opportunity to gain an insight into the supply chain of building materials coming into Australia from China. From discussions with manufacturers at the exhibition, the following key issues came into focus:

  • The western user’s perception of the ‘quality of product’ when coming from a Chinese manufacturer. In recent years Chinese manufacturers invested heavily not only in state-of-the-art plant and processes, but also employing Quality Assurance (QA) managers and supervisors specifically tasked to deliver products that can compete on the international market. The continuous and relentless drive to improve on product quality, coupled with a healthy dose of competition amongst various Chinese manufacturers with similar product lines, results in a buyer’s market where product quality and price are not necessarily inversely related, as in years gone by.
  • Time is money. Chinese manufacturers are now showing a keen awareness of compressed construction program strategies employed in Australia and other leading construction markets the world over. Clients’ never ending demands to have their projects delivered in shorter and shorter time frames, constant push for program acceleration and employing the principle of just-in-time procurement of materials, means that the time from design concept approval to installation on site of the final product is now measured in weeks and not months. More and more Chinese suppliers of building products are now offering fast one-stop procurement solutions where they can take a concept or design idea from the ‘back of an envelope’, brief their in-house design department on the desired outcome, manage a design process, develop and produce a prototype for client sign-off, manufacturing of the final product as well as assisting and facilitating in the freight and delivery phase, up to the point of the product arriving at an Australian port.
  • Product range. To put it bluntly – the buyer is spoilt for choice. With the constant improvement and advances on manufacturing processes, manufacturers in China now offer a bewildering array of product ranges and finishes options. Key to this is the fact that an increase in finishes options does not necessarily equate to cost uplift to the client. This is music to the ears of a QS, as I can now give my client and his architect the good news at the design meeting without dousing the fun with talk of extra dollars…
  • Minimum Order Quantities. Gone are days of having to place an order for 7,000 doors when my project only needs 70 doors. Happy days! Even medium sized construction projects in Australia have a viable economy of scale to make a discussion about an overseas product procurement strategy worth your while. Your client will find a discussion over lunch about how you intend to save her dollars with a tailor made procurement strategy, infinitely more interesting than listening to you going through your bills of quantities of 172 pages that you worked on for the last 3 weeks straight.
  • Put on your builder’s hat. Rigorous and productive contract price negotiations with any builder requires sound understanding of the building industry product supply chain. Where are the products coming from? Which products are better suited for local procurement and which products are better suited for overseas procurement? Why? How many middlemen are taking their cut? How is it transported? How is it installed? What are the wastage factors applicable to the specific product? In order to provide accurate and relevant cost advice to your client you need a thorough understanding of the product supply chain and the options available on your project.

We can all agree on one indisputable fact. Building product technology and innovation in the building industry is a juggernaut that is gaining momentum at an ever increasing pace.

Visiting the 118th Canton Fair provided an appreciation of the latest building product trends and innovation can give a cost consultant the edge on the competition whilst providing our clients with the one thing they cannot buy……. Value.

Johan Bornman is manager of the MBM Gold Coast office and can be contacted on Johan.Bornman@mbmpl.com.au