“Some of our customers from Switzerland and Europe have relocated their production to India and other Asian countries. The joint venture ensures customer proximity in the Asian region,” explains Christian Reinau, CEO of the Müller Group.
However, setting up a joint venture in India is not child's play for Swiss companies and presents them with major challenges. The example of the Müller Group shows that this intensive process can quickly lead to success with the right support. Christian Reinau takes stock of events: “We had been represented in India by an agent for some time. We also regularly participate in trade fairs in India. That's how we began talking with our joint venture partner in February 2016.” After an exchange of ideas, mutual visits to India and Switzerland soon followed. “We had a good gut feeling right from the start,” says Christian Reinau, “but of course we didn't want to rely on this alone. So got ourselves the support of Switzerland Global Enterprise.”
Negotiations on equal terms
On behalf of the Müller Group, S-GE took a closer look at the family business in India, and carried out a due diligence and business valuation analysis. “The support from S-GE was very professional and helpful,” reflects Christian Reinau. “Based on S-GE's research, our good gut feeling was confirmed. At the same time, we received valuable information about the Indian economy to help us negotiate with our Indian partner on equal terms.”
Two years later, in February 2018, the Müller Group and the Indian business partner had agreed a joint contract. “It was signed on February 13,” Christian Reinau recalls. “At precisely 12.39 p.m.” For the Indian partner, the day and time were very important. So the holiday Maha Shivratri (birthday of Lord Shiva) was chosen. And, according to the Hindu faith, the best time to sign important contracts is – in honor of Vijay Muhurat – 12.39 p.m. MuellerUnifab Packaging LLP was founded precisely to the minute.
We’ve always had to bear such cultural differences in mind when doing business in India. “There are many cultural stumbling blocks in India. For example, you have to sign an enormous amount of paperwork to conclude a contract, and we had to be very flexible throughout the process because the direction kept changing.” However, thanks to the support of S-GE and an Indian lawyer, these challenges were well met.
Knowledge transfer in full swing
The joint venture between the Müller Group is picking up speed. “We’ve been transferring know-how to India since the summer of 2018. Our focus here is on the production of drums for liquid contents and hazardous substances, such as paints, varnishes, chemicals or flavorings, since the Indian partner has so far only been able to produce drums for solids,” explains Christian Reinau. “It’s important for our customers that the barrels are tight and meet high international quality standards. We have now ensured this with an intensive exchange, training and tests.”
Construction of the new factory building began in spring 2019. The procurement of the production machines also started at the same time. The CEO of the Müller Group, who is regularly on site, attests that the construction is proceeding according to plan, “ensuring that sales of barrels can begin from the Indian plant in 2020. We want to be close to our customers, whether they be in Europe or Asia,” says a determined Christian Reinau, full of confidence.