winning_with_technology

“A successful industrial productcompany must be able to buildnetworks - good relationship withsuppliers, customers and related”persons - along the total supplychain.“A successful international industrial”company always stays close tocustomers



03MarkPeGrtoilnodgbuacInltsdMuiansrttkrhieaetl

Marketing Industrial Products in the Global Market Nowadays, with globalization, customers demandnew products with better quality, better performance butat cheaper price. The way of doing business has changed.Modern marketing is to translate what we know aboutcustomers’ demands and our technology into the next growthideas and create innovative products to offer back to themarket places with competitive price and good service. There are many tools for promoting consumerproducts. The internet and television commercials areeffective media in promoting products. News releases toTV and other media preceded the launch of the iPhone 4and iPad 2, which became hot products selling in manycountries. Personal selling is an expensive marketing methodwhen we consider the marketing expense per customer. Butin personal selling, the marketer is the person who adapts thevalue of the product to fit the individual customer’s demand.52 Winning with Technology

Personal selling is an effective marketing tool for industrialproducts. A good industrial marketer must be very goodin customer focus and able to communicate customers’demands along the organization’s internal supply chain toproduce the products and services that fit the customers’requirements.Modern Marketing Concepts Many successful companies grew their businessesfrom small enterprises into large companies. Some of thembecome very successful multinational companies. Toyotagrew from Mr. Toyoda, who made textile spinning mills. DuPont grew from Mr. E. I. Du Pont, who established a blackpowder (gun powder) plant in Delaware 250 years ago.Bridgestone, which is the largest tire manufacturer, grewits business from Mr. Ishibashi, who made rubber shoes forfarmers before World War II. These successful business-men grew their businesses by being hard working anddedicated to their work. The one thing they had in commonwas that they grew their businesses by adding new ideas togenerate differentiation of their products from others. TheyBanja Junhasavasdikul, Ph.D. 53

brought industrial demands into their organization to developbetter products to offer to the market places. In Thailand, thereare many successful Thai businessmen who also grew theirbusinesses from small firms into large enterprises. Mr.TiamChokwattana of Sahapatanapibuln Group is an example. Hestarted his business from a very small shop in Chinatown. Herepresented powder detergent from Lion Fat & Oil (Japan) inThailand. A few years later, he formed a joint venture with LionFat & Oil to manufacture detergents and household productsin Thailand. Now the second generation of Sahapatanapibulnis the largest consumer product company in Thailand, withhundred of factories, and has a very strong supply chainaround the country. This group is very strong in businessdiversification, always seeking better processing technologyto gain competitive edges in the market. Customers in today’s global market demand more newproducts that can offer better performance and at a cheaperprice. The way of doing business has changed. Besides thebetter product performance and innovative values to users,effective marketing is becoming very important for modern54 Winning with Technology

business success. News releases on the iPhone 4 and iPad2 created demand before the products were launched onthe market, and they quickly became hot selling products.Steve Job was an excellent presenter of Apple’s productsbefore they were launched on the market. Building a “Brand Image” is another marketingtool. Mercedes Benz promotes its image as the bestdriving-performance car of the successful businessman.Mercedes Benz has become the image of successfulbusinessmen in Asia. BMW promotes its image as thebest in engine performance and targets young successfulexecutives who love driving high-speed cars. Toyota Lexus built the image of Lexus as ahigh-quality luxury car that is comfortable to drive, cheaperin price than other luxury cars but excellent in after-salesservices. Toyota Lexus became a very popular car in the USand Asian countries. Unfortunately, the accidents causedby the braking system were not handled well or in time byToyota’s top management, and Toyota lost its share in theUS to Ford and GM. In marketing, consumers value theBanja Junhasavasdikul, Ph.D. 55

product not only for the technology and value-in-use butalso for the after-sales service and customer relationship,which are also important in building the brand image andmaintaining customer satisfaction. Building your business from the outside-in is anothermodern business marketing strategy. Besides focusing ondeveloping core-competency from inside the companies,many companies collaborate with customer to gain marketinsight and build strong relationships. Many companiescollaborate with their customers in the development of newproducts. They build value-partnerships along the valuechain. Du Pont, for example, set up innovation centers inmany countries to offer technical consultants and workclosely with customers. Du Pont gains market insight andknows about customer requirements from its businessconsultation with customers.56 Winning with Technology

Successful Industrial Product Company I would like to share my experience from 40 yearsof working in industrial marketing. I have found that, to besuccessful in growing industrial products in a global market,the company must develop its competitive edge over thecompetitors in eight areas. 1. Build strong core-competency in three areas,  Strong technology in the industry that we serve.  Employees’ abilities, control systems, and culture.  A strong technical marketing organization. 2. Build a strong partnership in the total value chain. 3. Have the ability to ensure congruence between its internal competency and external position. 4. Develop great corporate strategies to stay in front of the competition. 5. Build great marketers. 6. Build a strong corporate image. 7. Build business network along the value chain. 8. Develop a strong marketing channel of distribution.Banja Junhasavasdikul, Ph.D. 57

1) Build core competency in three areas Build core competency to build internalcompetencies requires a clear corporate vision andlong-term strategies from corporate top management. Goodcorporate strategies come from the right balance betweenthe resources and business objectives. There is no oneright strategy for all companies because every companystarts at a different point, operates in a different contextand has a different kind of environment. The organizationmust figure out how to leverage those resources into thebusiness strategies and create synergy between businessunits to capture the value of individual units’ achievements.Internally consistent corporate strategies must be tailoredto fit the firm’s resources and opportunities. In the highly competition market, an organizationmust be able to offer innovative products of consistentquality at competitive prices. The company must build astrong market position in the industries it serves. Inside theorganization, it must have a business culture that enhancesthe internal core values. In Innovation Group’s cultures, we58 Winning with Technology

emphasize the development of employees’ abilities and goodcorporate governance. We build an effective administrativemanagement system to control the operations of businessunits and the system to measure the achievement andperformance of individual and business units. Ifyouproduceatechnicalindustrialproduct,technologyis a key factor in building the company’s internal competencies.A leading industrial product company always looks forbreakthrough technology to create value innovation as theprincipal source of differentiation and competitive advantageto the organization in the long term. Breakthrough technologycan put a company on the competitive map in creatingvalue in the products. To create breakthrough technologyand value innovation is hard work, requiring the buildingof employees’ abilities, as well as a sound knowledge ofbasic polymer science, and the intention and commitmentto understand customers and the market. Value innovationis not the invention of a lone genius but needs a team-basedapproach to innovation. It needs discipline, sensibility andaccountability of the team to design a method to match theBanja Junhasavasdikul, Ph.D. 59

needs of both current customers and the wider requirementsfor innovation in current and potential markets. The expectedresults of value innovation must be continually communicatedalong the total supply chain.2) Building strong partnerships along the value chain To be competitive in the global market, thecompany has to start building internal core competencies.But if a company puts too much emphasis on internalcore-competencies, it will be lured into concentratingtoo much on internal benefits, e.g. lowering the cost ofproduction. The company will lose sight of the marketand opportunities, and that leads to poor results overthe long term. We must know what customers want, gainmarket insight into changing needs, and monitor what newcompetitors are anticipating and how they are meeting theseneeds, etc. To create breakthrough technology in a technicalcompany, the company must be able to look beyond thebusiness lines to determine what technology is feasible andwhat viable business strategies can convert that sense of60 Winning with Technology

needs into profitable business. They must focus on whatmust be done or changed. Five years ago, InnovationGroup looked for a new technology to sustain its growthin polymer processing and selected Nanotechnology.From the beginning, Innovation Group has created viablebusiness strategies in developing this breakthroughtechnology started by forming a technology working group tostudy the feasible technologies by comparing Nanotechnologywith biotechnology and the technology of renewableenergy. After the working group decided that Nanotechnologywas its most feasible technology, Innovation Group setstrategies to develop this technology by co-researching withthe university. Innovation Group provided research funds to theuniversity and invested in the necessary research equipment.Twelve months after the project started, Dr. Sanong Akasit ofChulalongkorn University discovered Silver Nano and itsbiocide property. Innovation Group invited Mr. BoonyarithMahamontri of Lion Corporation to Innovation Group’sresearch center to discuss the value of Silver Nano inpowder detergent. Eight months after that, Silver Nano in“Pao” powder detergent was successfully commercialized.Banja Junhasavasdikul, Ph.D. 61

Developing a breakthrough technology is a long process.It needs a clear corporate business vision and strategiesright from the beginning, in setting up a technology workinggroup to study beyond the business lines to determine whattechnology is feasible for Innovation Group. Then the viablebusiness strategies are set up to cover the requirements ofthis Nanotechnology development. It needs a breakthroughthinking process and the development of viable businessstrategies for this new breakthrough technology. It needsstrong commitment from top management and a goodbusiness controlling system to evaluate deviation fromplanned outputs until it succeeds. Many technology-led companies, like Du Pont,collaborate with customers in order to build value andpartnerships to sustain their growth. Du Pont has beensetting up many Du Pont Innovation Centers in manycountries to which it invites potential customers to discusstechnology support or co-project development. In theinnovation centers, customers and Du Pont marketers canhave teleconferences with Du Pont Research Centers whereDu Pont’s technical experts are located. By doing this, Du62 Winning with Technology

Pont can develop its collaboration with customers, which inturn leads to new product developments and new markets. DuPont builds value and partnerships along the supply chain. We connect to customers to gain market insight.3) Have ability to ensure congruence between its internalcompetency and its external marketing position A company that has aligned its differentiating internalcompetency with the right external position will stay in theforefront of competition. A successful company is customerfocused and looks beyond present needs to the markettrend, ensuring that the internal competency to meet theexternal demand. The company must stay in the industrythat is the best match with its technology and capability. Thecompany provides suitable technology, products andservices to its customers in the chosen industry, creatingvalue that customers acknowledge. This will keep thecompany ahead of its competitors. Innovation Group builds technology in polymers anddevelops products tailored to the requirement of customers.Banja Junhasavasdikul, Ph.D. 63

Our customers value our technological ability to provideproducts that meet their requirements. Many customers havevisited Innovation Group’s research centers and manufacturingplants. After their visits, many of them asked to form jointdevelopment programs for the new materials they needed andthat led to many innovative products being developed. Teflonin ABS as non-dipping ABS is a good example of a productthat Innovation Group co-researched with IRPC. This productwas being sold very successfully to many countries after ayear of joint research.4) Visionary organization with strong strategic planning A great company needs a clear business visionand great corporate strategies to stay in the forefront ofcompetition. Every company has its unique business culturesthat operate in the different environments. Good corporatevision and strategies must be able to leverage from thecorporate cultures, matching the business objectives to themarket or industry trends. The company must build its internalcompetency according to its corporate vision and strategies.With great corporate strategies, the company will be able64 Winning with Technology

to build its marketing position in the industries to which thecompany is attracted. The company’s available resources,capabilities and business intention must be considered insetting up corporate strategies. Innovation Group’s corporate strategy is “Build on whatwe do best.” We are using the strength of an excellent polymertechnology, market coverage, good connections and strongcustomer relationships to grow our business in Thailand, SEAsia and many other countries. We believe that InnovationGroup can grow 20% per year in the next five years and staythe “Best” in what we do. However, to sustain the growth overthe next five years, Innovation Group has to differentiate itsmarketing position from marketing only high-tech polymers andhave additional products of high volume commodity polymersand chemicals in the product portfolio. Innovation Group hasto balance corporate resources and business intention forlong term growth. We cannot just wait only for new productsfrom Du Pont and Dow Chemical but we must be aggressivein developing new products from our R&D and commercializenew products more quickly. In trading, we have to be veryBanja Junhasavasdikul, Ph.D. 65

active in international polymer sourcing and marketing thoseproducts in SE Asia and many other countries.5) Develop great “Marketers” We recognize that the marketer is the frontline soldier.In technical industrial products, personal selling is one of themost effective marketing tools. It is an expensive method ofmarketing if we count the expense by the number of callsor by the number of customers, but in personal selling themarketer can explain to customers the value of productstailored to meet each customer’s process and demand.A successful marketer must play six roles. He has to becustomer focused, create the product’s value-in-use to fit thecustomer’s process, be a good outside-in integrator, goodnetwork builder, good negotiator, good communicator, andgood implementer. A) Good customer focus A good marketer must gain insight into the customer’s needs. He has to focus on the nature of the customer’s business, its behavioral detail, processes, requirements and its technical and66 Winning with Technology

business issues. A good marketer must be able to tune-in to the customer’s mindset to discover the specific preferences and requirements. Doing this, the marketer can gain insight into new ways of doing business with his customers to maximize the satisfaction of each customer.B) Create product’s value-in-use to fit to customer’s process Good product knowledge is a basic requirement of an industrial marketer. He must be well versed in the applications of products and how each product is processed to maximize the value in the customer’s process. He must know how to offer the value of his product to customers to show that it is a better product than the in-kind competitive product. Product knowledge and applications are basic training courses in industrial selling for marketers, followed by courses in “Proposal Selling” and “Value Selling.” A marketer has to learn his knowledge of the customer’s processing technology at the customer’s site.Banja Junhasavasdikul, Ph.D. 67

C) Good outside-in integrator A great marketer is a great observer: he must have creative intelligence, which enables him to discover market intelligence and transfer his knowledge to those inside the organization advocating on his customers’ behalf. He brings customers’ technical requirements to the R&D team to create innovative products to offer to the customers.Finally,being the outside-in integrator he must act as the communication channel, bringing customer and market insight to those inside the organization. D) Good network builder A good marketer must be able to build networks - good relationships with suppliers, customers and related persons - along the total supply chain. Marketing is not the job of a “Lone Star Hero”: a marketer must know how to communicate customers’ requirements along the total supply chain, from advising the internal purchasing department on raw material supply68 Winning with Technology

(in quality, quantity and delivery time) which matches the customers’ requirements. He links R&D to customers’ technical departments for product specifications and creates development programs etc. Sometimes he builds networks between customers and suppliers to have good information on specifications, demand and supply.E) Good negotiator A good marketer has to be a great negotiator to gain win-win outcomes. Courses of “Negotiation” and “How to handle objections” are the advanced courses for most industrial marketers. A good marketer must be able to handle tough bargaining situations. Very often a marketer has to negotiate an objection with a customer. A customer’s product quality claim, an internal request to raise prices, or a supply shortage are examples of the tough situations that a good marketer must be able to negotiate to gain acceptance from a customer without losing business, and maintain a good relationship with that customer.Banja Junhasavasdikul, Ph.D. 69

F) Good implementer The marketer stands in the middle of the total value chain of the marketing cycle. The success or failure of sales depends on the marketer’s performance. As well as all the characteristics mentioned above, the marketer must be able to implement all roles in the total value chain of marketing to close sales and maximize customers’ satisfaction. G) Good communicator A good marketer is a good communicator: he must be able not only to transfer his recognition of the value of the product he is selling to his customers but also communicate effectively inside the organization, informing CSR, supply chain personnel and the R&D center of the customers’ requirements.6) Build a strong corporate image We build a strong brand image to enhance marketingsuccess. A company trading in consumer products relieson mass media product campaigns to build a strong brand70 Winning with Technology

image. Customers for industrial products value a company’scorporate image in the value of its products, services,behavior and the capability of the company’s front-linepersonnel. The corporate image is also evaluated from thecompany’s corporate responsible to the society and industry. In building a brand image, a company has to start fromthe value perspective that reflects the company. For example,Nike creates the value of Nike shoes by promoting them ashigh performance shoes. Nike creates a perception of NikeAir as the best shoe for sport players. Michael Jordan was themost popular model and top selling basketball shoe for morethan ten years. Nike continues to build its brand identity astop performance sportswear products with excellent design.Tiger Woods was Nike’s brand identity in golf sportswear andshoes. Nike continues to build its brand identity by gettinginvolved with the famous players in most sports. Innovation Group has a very clear vision andperspective in positioning ourselves in the industries we serveas a leader in polymer technology. Innovation Group has a socialresponsible to provide customers with products that serve theBanja Junhasavasdikul, Ph.D. 71

customers’ production needs. Innovation Group contributesto the social, industrial and academic sectors in supportingthe country’s technology. We are sending clear messages tocustomers, industry and universities that Innovation Group hasa strong polymer technology and are ready to support to them.Innovation Group’s website also sends very clear messagesto target customers that Innovation Group is a technology-ledpolymer supplier that can serve a wide range of polymers, rubberand plastic compounds, and rubber parts to industry. InnovationGroup has a research center that can also provide technologysolutions to customers in many industries and countries.Every month, our website is visited by hundreds of peoplearound the world. We have received many enquiries from newcustomers from many countries. New customers visit ourTechnology Centers and manufacturing plants every month.In October 2011, Innovation Group will invite hundreds ofcustomers, suppliers, businessmen and professors fromuniversities to attend Innovation Group’s business seminar andopening ceremony for our advanced rubber processing factory.This is one of the ways to build a strong corporate image.72 Winning with Technology

We connect to industries to build a strong image ofInnovation Group as a technology solution provider in therubber and plastic industries.7) Build a business network along the value chain A successful industrial product company must be abletobuildnetworks-goodrelationshipwithsuppliers, customersand related persons - along the total supply chain. The whole organization, not just the marketing team thatis responsible for direct service to the customers, must buildstrong multilevel personal relationships within the customers’organizations. Our marketers bring customers’ requirementsinto the customer service department, the supply chaindepartment and the technology center. Researchers areresponsible for solving customers’ technical problems anddeveloping new product formulations and innovative productsto serve their needs. Joint research and development betweencustomers and our researchers is common; it builds strongrelationships with customers and also creates InnovationGroup’s brand image. CSR and supply chain personal areBanja Junhasavasdikul, Ph.D. 73

responsible for ensuring delivery of supplies to customers: thebest quality product, at the right time and at the right price. Innovation Group also treats its suppliers as strategicbusiness partners. Local suppliers benefit by supplying uswith only qualified products that meet our needs, at the righttime, and we audit supply capability and product qualityat each supplier’s site. We give them technical assistancewherever necessary. We visit our overseas suppliers orthey visit us frequently to build personal relationship. Wehave good communication with them on our requirementsfor quality, quantity and delivery time of raw materials.When there is a shortage of raw material, Innovation Groupis always in a better position than its competitors. Wereceive full support from suppliers because of our excellentrelationship and good communication. Every year, Innovation Group arranges a “SupplierAward”. Prizes are given to the best three suppliers based onthree categories: Quality, and Delivery. In the Supplier Award,suppliers are informed about their performance during thepast year and requested to improve for the next year.74 Winning with Technology

We have to build a win-win network along the supply chain.8) Develop a strong distribution channel A successful international industrial company muststay close to customers. Different countries have differentbusiness cultures, regulations, rules, laws, taxes andthe people in each country have different preferences.Marketing industrial products depends on how you sell thevalue of the products to meet customers’ requirements. Thisinvolves advising them on product selection and processingtechniques. To maximize customers’ satisfaction, we haveto stay close to the market and customers. There are two ways to market industrial productsin foreign markets. Either the company appoints a localdistributor to represent its products in that country, or thecompany sets up its own organization to market its products.Both have advantages and disadvantages. Setting up its owndistribution organization in another country is costly, but thecompany gains first-hand information and has direct contactBanja Junhasavasdikul, Ph.D. 75

with the customers. It is good for high-growth countries andlarge market volume, but if the market is fragmented and /or low growth, appointing a local distributor to represent thecompany’s products is the better choice. Some companieselect a combination of both methods. In 1981, I chaired a marketing study of Du Pont. In early1980s, Du Pont was new in Asian markets and established DuPont offices in many countries. Du Pont needed to study theadvantages and disadvantages of using local distributors tohandle its industrial products versus marketing the productsitself in various Asian countries. There were some interestingconclusions from the study.  For the highly technical industrial products, direct marketing was needed. Those products should be marketed by the company’s marketing staff. Although the marketing cost is high, technical selling on the value of products is needed for technical products. The technical values of these products need to be translated into terms of the customer’s value-in-use. Only the well trained76 Winning with Technology

technical marketer does the job well. It is difficult to train a local distributor to handle highly technical products. If a product becomes a commodity and there are many competitors in the markets, competitors offer in-kind or not-in-kind products in the market. Price is very sensitive for commodity products and the elasticity of volume versus price is very high. A good local distributor is preferred because of the local distributor’s lower cost of personal selling (per head, or per sale). The local distributor also knows local business cultures well, and can build strong customer relationships, but the question is how to find a good local distributor who has good industrial product selling skill. In a high-volume country, a combination of both methods is preferable. To set up a marketing organization in a high-growth or high-volume country will give advantages in total cost of marketing. The company can create more technical value from the product offering to customers. SomeBanja Junhasavasdikul, Ph.D. 77

companies elect to go directly to large customers, but let the local distributor handle small customers. This gives the company very good market coverage. Grow Innovation Group in the global market Innovation Group has had very clear businessmissions in growing in global market 1) building stronginternal competency in technology and people capability, 2)Innovation Group has been developing strong and uniquecultures and internal systems in controlling and auditing theoperation, and 3) Innovation Group has been developing astrong marketing position in many industries in Thailand asa quality product supplier.  We shall sustain our growth in the high-growth industries in Thailand.  Export our products from manufacturing to the USA, Europe and many countries in Asia.  Innovation Group cannot rely on technical products from Du Pont and Dow Chemical.78 Winning with Technology

Trading companies of Innovation Group must be able to source various products from various countries to market in SE Asia.  Overseas investment is necessary to grow in the global market. Innovation Group’s marketing strategies in rubbercompounding and rubber parts include the following.  Sustain our competitive edge with Japanese customers.  Sustain our technology assistance to high-profit customers.  Develop the Innovation Brand image as a world-class rubber compounder and manufacturer of rubber parts in the international market.  Use social media and participate in major polymer trade shows to communicate to new potential customers.  Emphasize our high-tech customers to create an image in international markets.Banja Junhasavasdikul, Ph.D. 79

 Global sourcing and being a global polymer supplier. In the trading section, we have to be very active in sourcing new products to add to the product portfolio to sell in global markets. We developed three major actions:  Stay close to the potential markets.  Build an excellent international marketing organization. Now, Innovation Group’s representative office inVietnam is very active. We have one Thai manager andtwo Vietnamese sales ladies, who received very intensivetraining in polymer technology and product applications inthe technology center. Marketing executives travel to Vietnamevery months to visit customer with the Vietnamese team. Webuild strong partnerships with customers in Vietnam. Salesrevenue in Vietnam grows years after years since we set upthis office in 2009. We are looking for a location to set up ourtrading office in Indonesia.80 Winning with Technology

‘‘A successful international industrial company always stays close to customers.” In the two years since we started in sourcingcommodity products from many countries, we are usingThailand as a gateway linking products between North andSouth East Asia and from Asia to Europe and the USA. Weare adding a wider range of rubber and plastic products toInnovation Group’s portfolio. “We will become a strong Global Sourcing and GlobalPolymer Supplier in the global market. Innovation Group is building a gateway to various customers in Asia.”Banja Junhasavasdikul, Ph.D. 81



“Technology will not come bychance. We have to develop radical”technology to sustain the growth of theorganization.



04NanotDeecvhenloolpoegdy UwnitihveCrshiutylalongkorn

Developed Nanotechnology with Chulalongkorn University1) Back Ground Globalization creates not only business opportunitiesbut also greater challenges. To take advantage ofglobalization, a company has to focus on those areas inwhich the company has advantages (core competencies). Thecompany must emphasize efficiency in using resources,productivity and the organization’s technologicalcompetence. Technology and value innovation becomethe keys of the core competencies that a company musthave to sustain its growth in the modern global businessenvironment. From 1980 to 1990, the US and Europe looked atthe Asia Pacific region as the sources of raw materials,places for their manufacturing, and markets for their exports.86 Winning with Technology

Hong Kong, Singapore, Korea and Taiwan gained foreigninvestments and gained technology from those foreigninvestments. These four countries became the newlyindustrialized countries through foreign investments.Meanwhile, their governments emphasized the developmentof technology to up-grade their industries. In twenty years,these countries developed their industries to become newlyindustrialized countries by using the strategy of “Copy andDevelop” to enhance their manufacturing capability. Koreaand Taiwan are good examples. They have grown theirindustries by copying technology from the original product,then developing better products to offer to the market. Inthe past 20 years, China has been doing the same as Koreaand Taiwan in “Copy and Develop”. Now China is secondto the USA as the largest economic country. How about Thailand? Thailand has been developed from anagricultural country to an industrial developing country.Electric appliances, disc-drives, automobiles, auto-partsand food processing are major exports. The Thai economyBanja Junhasavasdikul, Ph.D. 87

is driven by exports, but if we look deeply into theseindustries, the key players of these industries are the foreigncompanies or joint venture companies with Thai companies.Advance technologies are in still in the hands of the foreigninvestors. It is a common discussion among Thai SMEs,which are 95% of registered Thai companies, that theyare facing stronger competition from the coming FreeTrade Agreements (FTA). They were hoping that thegovernment can help them to maintain high import dutiesto keep their products competitive, but it is not possible.Whether you like it or not, the FTA has to come. By 2015,the trade agreements of the ASEAN Economic Community(AEC) will be fully implemented. Import duty will be reducedto three levels: 0-1% for raw materials, 5% for semi-rawmaterials and 10% for finished products. Meanwhile theAEC is discussing with many other countries outside ofthe AEC on FTA, therefore many Thai SMEs are looking fortechnology to sustain their businesses and they are hopingthat the Thai government will help them to develop advanced88 Winning with Technology

processing technology to improve their product quality andlower their processing cost. In response to requests, theThai government arranged many technological seminars,hoping to help Thai SMEs to learn new technology. In somecases, the government provided technical consultants forThai SMEs, but so far it hasn’t worked very well because thegovernment’s actions were inadequate. Technical seminarsdid not answer the different problems that SMEs have andthe Thai government did not put enough effort or money intomeeting the technology requirement of Thai SMEs. The Thai government sets up many technologyorganizations and spends 0.2% of the country’s GDP on thecountry’s technological research and development. Most ofthe budget is allocated to these government organizations.Thai government hopes that these technology organizationswill generate some advanced technologies that can help todevelop sustainable technologies for Thai industries, butso far these technology institutions has not produced anysignificant advanced technology that can help Thaiindustries. They are not able to link their researchers toBanja Junhasavasdikul, Ph.D. 89

the research that would serve industries’ requirements.Instead, the Thai government requests the private sectorto invest more in R&D. So far, the government incentivesfor private company to invest in R&D have not been veryattractive, therefore only a handful of large Thai companiesinvest in R&D. Siam Cement Group (SCG) and PTT aretwo of Thailand’s largest petrochemicals companies thatinvest substantially in R&D in petrochemical products.Chareoen Pokkaphan (CP), which began business inpoultry farming and the manufacture of animal feed stock,has been successful in research and development inpoultry and fish farming technology. CP has been invited byChinese government to set up many poultry farms in Chinathat the Chinese government uses as demonstration farmsfor their people. CP has now diversified its business to theconsumer retailing chain and telecommunication. Because oftechnologies that they gain from the research, these threecompanies have built strong internal competencies thatallow them to diversify their businesses. They are goodexamples in developing technologies and building upinternal competencies to sustain their growth in the global90 Winning with Technology

market. However, apart from a few large companies, manyThai people still think that R&D is high investment and highrisk, therefore not worth investing in. Some companieswould like to invest in R&D, but they do not know how tostart. Some companies started their R&D by investing ingood research equipment, but they failed to manage theresearch competently and could not gain the required valuefrom the investment. Researchers are also difficult to find,as most of the good scientists and engineers prefer to workas university researchers. Let’s look at the academic sector, which is anotherof the country’s sources of technology. Thailand has manygood science and engineering schools, with excellentscientists and engineers who have had an excellenteducation from good universities around the world. But aftergraduation, besides teaching, they prefer to do researchthat they like. They seldom get involved with the industry. How can we link these excellent scientists andengineers to industries so they can meet their technologyrequirements?Banja Junhasavasdikul, Ph.D. 91

2) Research and Development Center of InnovationGroup As an organic chemist by background, I had beenworked for many years with Du Pont, one of the leadersin technology. Du Pont has excellent research centers inmany countries. Having been exposed to Du Pont’s culturefor many years, I have a very strong belief that technologyis one of the key factors of business success. After I leftDu Pont in 1983, I was appointed as Du Pont’s polymerdistributor in Thailand. I believed that to be competitive,I had to differentiate my company from other tradingcompanies. I have to be able to provide technology solutionsto the customers I serve, therefore a small research lab wasset up. Starting with three chemists and simple researchequipments, after three years we were able to develop newproducts and provide technology solutions to the customers’technical requests. From a small trading firm, we were able togrow to become a large group of companies consisting of sixfactories, two research centers and a strong internationaltrading organization as a consequence of the strong92 Winning with Technology

technology capability that we developed within theorganization. Now these R&D are the centers in which manyinnovative products are developed to offer to the markets.We gained market share and customers’ confidence. Wewere able to diversify Innovation Group from a polymer tradingcompany into a company that offered the whole range ofpolymers, customized polymer compounds (rubber andplastic) and rubber parts for automotive, shoe, electronicand electric appliances. Two R&D centers give technicalservice and a joint product development servicetocustomers.Innovation Group has become very strong in both the rubberand polymer businesses and exports its products to variouscountries. Besides service to customers, these two R&Dcenters are Innovation Group’s technological knowledgecenters for training employees and university students. In the past ten years, Innovation Group’sResearch Centre has been a polymer training centre forInnovation Group staff members and university students.We use the Research Centre to train new technical staffbefore transferring them to the marketing, technical andBanja Junhasavasdikul, Ph.D. 93

production departments. Every year, Innovation Groupprovides a “6-week polymer technology summer camp”for 25-30 senior students of 8 universities. This is a veryintensive polymer and manufacturing training program forwhich 8 universities will select their top students. Roomand board are provided free of charge for these students,who learn polymer technology in the classroom. They learnpolymer processing and testing in the lab for 3 weeks andalso visit Innovation Group’s processing plants. They have achance to do research of their own in the last two weeks. Why has Innovation Group provided thisTechnology Summer Camp to the senior students since2002? This is to answer my question, “How does the Grouplink technology with the university?” We have to giveuniversities an educational benefit before they will startcoming to us. I also believe that development of thetechnology to serve industries has to start from thetechnological capability of the university students.The third-year students should be trained in practicaltechnology as well as what they learn in the classroom.94 Winning with Technology

They have to learn how the industrial working environmentfunctions before they graduate. This experience will helpthem to be more creative. This was also the same periodthat I was invited to teach in two of the best universities inThailand, therefore it was very easy for me to link thesescience and engineering schools to the polymer industry.I hope that by doing this, I can help to develop technologicalcompetency for Thai industry.3) A new technology to sustain the long term growthof Innovation Group I have always believed that technology is around usall. It is a question of deciding to capture it or let it go, butit needs a strong personal commitment in financial andpersonal effort to capture. In 2002, after 20 years in developing polymertechnology, I started to look for a new technology that couldbe added to our polymer technology portfolio.Banja Junhasavasdikul, Ph.D. 95

Three technologies were under consideration.  Biotechnology. Certainly, this is the advanced technology for the next few decades. Du Pont is now catching up this technology. Du Pont dropped many products that are produced from petroleum from their product portfolio and turned to products produced by biotechnology, putting a lot of money and effort into developing biotechnology products. However, after an in-depth study into biotechnology I believe that, because this technology needs a lot of effort and investment, it will take too long for Innovation Group to gain any benefit from research in biotechnology and it is beyond Innovation Group’s resources to fund research in this biotechnology for the 10 years it would take to reach the required standard.  Renewal energy. Solar energy, energy from wind and wave, biogas from biomass etc., have been widely discussed in industrial sectors. However, having carefully reviewed the potential benefits to Innovation Group and the chances of success,96 Winning with Technology

we believe that renewable energy is not Innovation Group’s field of business. We preferred to look at Nanotechnology. Nanotechnology. It is a technology related to very small particles. Compared to the same weight of micro sized particles, nano particles have a million times more surface area. This means a comparable increase in the reaction activity of nano particles versus the micro sized particles. The quantum energy generated from the nano particle gives higher physical and chemical reactions to the nano materials. There were many reports on the value of nano composites in plastic and rubber. Developing innovative nano composites in plastic and rubber to offer to the market would be quite beneficial to Innovation Group’s business.4) How could we start? The best way to learn nanotechnology is fromtechnical seminars and nanotechnology trade shows. I tookBanja Junhasavasdikul, Ph.D. 97

our technology group to visit the Tokyo NanotechnologyExhibition and Seminar in 2005 and the TaiwanNanotechnology Exhibition in early 2006. Although the TokyoNanotechnology Exhibition was bigger than the exhibitionin Taiwan, we learned more from the Taiwan NanotechnologyExhibition. The Taiwanese government gave strong supportto the building of a national technology center and joins handwith the private sector in developing industrial technologythat is suitable for industries. From the Taiwan NanotechnologyExhibition we saw more in application researches and manyend products from nanotechnology. Many applications ofnano materials gave us ideas on how we should start ourown nanotechnology research. After we came back fromthese seminars, a special task force was set up to developthis new technology. We learned from the nanotechnologyexhibitions that this technology has been widely developedin many countries, but there were not many developmentsin rubber composites. This gave us very good opportunitiesto research nano composites. To be successful in this newtechnology, Innovation Group should collaborate with atechnology institute.98 Winning with Technology