Firm Gets China Pact

May 12, 2008
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GRAND RAPIDS — Will Jeff Lambert do anything to drum up business in China?

Well, almost anything. On a trip to the world’s most populous nation earlier this year to meet with new client Shiner International Inc., Lambert sampled the local fare, but drew the line at eel.

“I had some cultural experiences, such as eating chicken feet and worms, but it was not forced on me and it was the kind of thing that I felt I wanted to immerse myself in the culture. That’s part of the adventure,” he said. “The worms were good. The chicken feet were not.”

Overall, Lambert said, he was impressed by Chinese hospitality and interest in doing business.

Lambert Edwards & Associates competed with four other companies to win the investor relations business of Shiner International, based in Haikou, China. Reporting to the Securities and Exchange Commission $42.8 million in revenue for fiscal 2007, Shiner makes packaging film that wraps consumer products such as food, liquor, tobacco, CDs, DVDs and cosmetics. It employs 500 people in three facilities. The company incorporates anti-counterfeit technology into its product, Lambert said.

“They’ve been doing packaging film for years, but more recently have gotten into anti-counterfeiting film,” he said. “Counterfeiting is a $600 billion problem in China. What they have figured out is how to put a hologram in the plastic film so you know it is real product.”

Shiner International merged with a shell company to earn a spot on NASDAQ and is traded under the symbol BEST. It’s been a public company in the U.S. since January.

The work in China developed through referrals, this time through an analyst who was following both Shiner and another client, Lambert said. Lambert Edwards was one of four companies who pitched the client by telephone, he said.

While Shiner is led by a man with an MBA from Cornell University, most of the management team speaks no English, “which is the biggest challenge,” he said.

“The nuance of the language and the time delay in talking about something, letting the translator communicate that, then hearing their response creates a challenge in the flow of a conversation. At the same time, I think they are very open to Western business.”

Stepping from the edge of the Grand River to the Pacific Rim is a potentially costly venture, Lambert said, in terms of both money and time.

“Before we said yes, we had to evaluate the time and economic cost,” he said.

With a 12-hour time difference, conference calls occur at 7 a.m. or 7 p.m. “Trying to connect on timely matters demands middle of the night communications at times,” he said.

But, Lambert added, he had to weigh that against the value of a unique opening into a hot global market.

“Because of this referral relationship, we had an opportunity to penetrate China at a fraction of what it would cost to go there without any relationships.”

Since Lambert Edwards began representing Shiner International as of Feb. 1, the company has been courting investors interested in packaging, small cap or Chinese public companies. The firm has been working on Shiner’s annual report and will be at a three-day investors’ conference in New York with management.

“They didn’t come to the U.S. to be publicly traded because they needed the money. They came because of the prestige,” Lambert said. “They felt like being listed in the U.S. was an important thing they could share with their employees and their customers, and it was a sign of credibility.”

Lambert visited five other Chinese companies during his trip and said he expects to develop more business there. Lambert Edwards has other clients based in Canada but the Shiner International account is the first outside North America.

“I believe we have a tremendous opportunity not just in China but in a lot of different international markets,” he said. “Currently the weak dollar makes (U.S.) services or other businesses very attractive in China.”

Exporting the service industry is underutilized, Lambert added. “There’s no tariff, there’s not an additional tax. Essentially, we’re exporting our brain power. There’re no limitations on our ability to provide services to China.”

Lambert said about half his staff is devoted to investor relations, with three people assigned to the Shiner account.

“What I’ve learned is how international we already are — we as a community and we as a country. Business translates across any culture. Business is business whether in the U.S. or China. We have the same business objectives of a good work force, profitability, growth in sales.

“The basic business tenants are the same and that’s what translates.”

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