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10 minutes with Alessandro Vespignani – OLI Far East

Oli Industrial vibrator Indonesia Malaysia

In Malaysia, which are the best-selling OLI products?

The MVEs are the best-selling products, along with the Concrete Consolidation range. There are not many machine manufacturers but rather small companies that repair machines and perform maintenance. We do 80% of our turnover with dealers who sell spare parts, and therefore all types of vibrators, for this reason we have a very large warehouse to meet market demands.

Do you have long-term goals for OLI Far East?

The first goal is to reach the BEP (Break Even Point), and then bring the subsidiaries to continuous growth. I started at OLI in 2020, we opened the OLI Far East subsidiary in Malaysia shortly after, and in 2022 I also started OLI Vietnam and OLI Indonesia. I also follow the market in Singapore and the Philippines, the latter still all to be discovered but with certain potential.

How were you able to make the OLI Brand known within Malaysia and the Far East?

We had a good starting base thanks to WAM, which was already selling OLI products before my arrival. WAM was very focused on some business sectors which is why I had to work hard to enter sectors where we were unknown. We started participating in industry fairs and visiting many clients, then covid slowed down the activities and led us to extend the growth times. After 4 years of work in Malaysia and participation in various generic and specialized industry fairs (construction, Palm Oil, and Machinery), this year we decided not to participate in any fair, to instead focus on sector research. The second lever I focused on to make OLI known to the market was to start cooperating with many distributors or retailers, offering very aggressive prices and products in stock ready for sale.

How do you imagine your branches in the next 5/10 years?

Indonesia is a potentially very large market, with a population of 270 million people giving us an idea of the potential of this country. Despite being almost a third-world country, the government is implementing a policy of large public investments which is why the construction sector is already in strong development, but also in the coming years it is destined to grow, creating a flywheel that will push a bit all sectors. Add to this that in Indonesia the Oil, Mining, and Palm Oil industry is very developed which should lead us to significant sales growth. As for Malaysia, being a much smaller country compared to Indonesia, having only 33 million people, but being a much more mature and developed society, the margins for growth are more contained. On the other hand, being a more mature and developed market, there is still a certain type of industry that takes machines from abroad rather than economic products. So I do not see margins for great growth but it will allow us to reach a break-even and then stabilize at a certain level of business. Therefore, it will be necessary to organize to have a lean and functional structure that will allow us to be present in a significant way, ready to seize all possible new business opportunities, such as investments in the electrification of cars.

How did you come to be General Manager of OLI Far East?

I got in touch with OLI through Wam, with whom I was already in contact. I was in Malaysia on behalf of another company and was looking for a new professional challenge, a new opportunity. OLI contacted me, probably after exchanging my contact with Wam, and presented me with a project for investment and growth in Asia. The project seemed interesting because it involved creating a sales structure for the entire Asia Pacific from scratch. It was a challenge that I really liked because I had already done something similar in China in 2009 for another company. The decision to open various branches was actually made later on, as the initial idea was to start with Malaysia as a hub for the whole of Southeast Asia. In reality, once we started, I realized it wasn’t feasible to manage direct sales in Indonesia and Vietnam with just one company and warehouse in Malaysia, because the sales involved quite high transport times and costs as well as many difficulties for many customers to import. Therefore, in agreement with the parent company’s board, we decided to create new subsidiaries with local warehouses. This has been the journey up to now. Covid certainly influenced the growth times of the branch in Malaysia as well as the market in Asia in general as in the rest of the world. In 2020/21, when I started with Malaysia (I was not yet following Indonesia and Vietnam), I mainly studied the market situation because the economy was moving slowly due to various lockdowns, just as in Italy, for several months; I started working at OLI in January 2020, and OLI Malaysia officially started in September 2020, despite Covid and lockdowns. Then, our sales have been consistently growing, and in 2022 we increased the budget and, all in all, I managed to achieve the results we had set for ourselves. The proximity to China and a certain economic dependence of the Southeast Asian countries on China leads us to have a lot of Chinese competition, especially in Vietnam, but also in Malaysia and Indonesia; on the other hand, Indonesia is still a country all to be discovered for us, the fourth country in the world by population, geographically very extensive and dispersed across thousands of islands. Considering that we started with a database of 50 customers in a market of 280 million people, it’s easy to understand that the first and biggest job is to know the market, contact as many customers as possible in order to create a database and map the market, through interviews with the customers themselves. In Malaysia, the work was different because the OLI brand was already well inserted, and we are already competitive with the prices even against Chinese competitors. The Malaysian economy, as well as that of Vietnam, are very dependent on the economic hegemony of China in the area, from which they depend for large public investments as well as for medium-large manufacturing enterprises. In these countries, in fact, there are many foreign companies (European, Japanese, Korean, and American); Koreans and Japanese are focused especially in the sectors of semiconductors, chemical, biomedical, sports, and footwear; the Chinese, however, have arrived especially in recent years when the United States began to create barriers and tariffs on the importation of Chinese products. This situation, in particular, has led in the last 7-8 years to significant investments by Chinese manufacturing companies in Vietnam (especially in the North) exporting products to the USA, in order to circumvent import duties.