Andy Woodward is a director of Shanghai SIP Engineering Consulting, part of the SIP group. SIP is a UK firm, but focuses entirely on China; the acronym originally stood for Sino Infrastructure Partnership. The firm started up in 1993, providing consulting and project management services through a joint venture, but became a wholly foreign-owned enterprise (WFOE) in 2002. CHINA ECONOMIC REVIEW spoke with Woodward about the value of objectivity, the Shanghai Expo and SIP’s role building the world’s largest condom factory.
Q: Why did you decide to become an independent WFOE?
A: Because our clients like the idea of impartial, independent advice. If we were affiliated with a contractor, for example, there could be a temptation to offer advice that was influenced by the needs of our partner. Because we don’t have any tie-ups, our advice is more independent and objective.
Q: What are the greatest areas of demand in terms of fixed-asset investment?
A: We’re seeing significant activity in the retail, automotive and aeronautics sectors. There’s also green engineering; wind power, photovoltaics and so on. Manufacturing projects are historically our largest sector, but we are also very active in the commercial and leisure sectors, both of which are currently showing good potential. As for green stuff, we recently completed a major photovoltaic cell project in Shandong and we just started a wind turbine project outside Shanghai.
Q: What is the competitive environment like these days?
A: There are actually surprisingly few direct competitors. We sell ourselves as the largest foreign-owned pure project management company in China. The reason we say that is because the vast majority of other companies that offer project management don’t do it as a core part of their business. They are usually designers, contractors or cost consultants. There are domestic pure project management companies, but they tend to offer a very different kind of service. We’ve recently set up a separate business unit to service local client requirements because their priorities are different. For example, a Western company will typically spend a lot longer in the strategic phase of development, whereas Chinese firms typically want to use a tried and tested strategy that has worked for them previously.
Q: What is SIP doing for the Shanghai Expo?
A: We’re doing four separate projects at the moment. One is the Urban Best Practice Area [UPBA]. Liverpool and Prague, for example, are there demonstrating things that are close to their heart about sustainable urban development. The other three projects are national pavilions for the United Arab Emirates, Norway and Ireland. We’re basically the international liaison project manager. Our role is to interface with all the foreign participants and give them guidance on procedures and strategic advice, policies, that sort of thing.
Q: How does the Expo compare to the Olympics in terms of investment?
A: The Olympics was a key event for the Chinese government, and no expense was spared. But now we are in an environment where some countries have to justify the expense of the Expo.
Q: We understand you recently helped build an enormous condom factory.
A: Ha. Yes, it’s in Qingdao, which is also famous for its beer factory. It’s about 23,000 square meters and is capable of producing over 1 billion condoms per year! I was actually at the opening of the facility last week. It’s a state-of-the-art facility, and a major investment by SSL, the British company that owns Durex. It’s also one of the largest condom facilities in the world.
Q: Looking forward, what will be the principal source of growth for your firm?
A: Our roots are in manufacturing, but our future is in pretty much any sector that has growth. In China, high-tech sectors are really good targets for us at the moment. We also have significant experience with sustainable buildings. We have in-house LEED AP-qualified professionals capable of assisting with the full spectrum of services required for LEED accreditation, which is a US-based sustainable building rating system.