Vekoma

Building a rollercoaster, with all the technique and technology that entails, is a big project. A small ride might be completed in as little as 6 months, but for a large rollercoaster, the process can easily take a year or even two. On average, Vekoma supplies 20 rollercoasters per year, many of which to foreign clients. As said, the construction of rollercoasters is a long and costly process. How does Vekoma limit the risks involved in dealing with orders of this size and with doing business abroad? We spoke to Peter van Bilsen, Division Manager Sales and Marketing, about just that.

Vekoma and international business

“Our focus has been the international market for a long time already. We have many existing clients, including some that we’ve had a relationship with for decades. Around 70 to 80 % of our clients are regulars. That is of course a good thing, but we also work hard to bind new clients to us.”
Vekoma takes a proactive approach to the market. “We visit one foreign client or another about once month. On the one hand we take an active market approach. Meaning, we regularly attend exhibits and fairs and participate in tenders. On the other hand, because of our brand reputation, we also receive a lot of enquiries.”

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Checking out new collaborations

Especially because it often pertains to long-term projects, Vekoma tries to properly assess the risks beforehand. When considering a new collaboration, Vekoma first sees what it can find out about the other company by itself. Does the client appear reliable?

“When we visit a client, we always fill in a checklist and pay attention to several specific matters. What country is the client based in? Is it an existing or a new client? How long has their amusement park been in operation? Who are the stakeholders behind the company? What options are available in terms of financing? Depending on the answers to these questions, we determine what external checks we require.”

It is not always necessary to perform further checks on clients. In some cases, there are plenty of reasons to trust that a new client is reliable. “The payment risk is the most important factor for us. There are also situations where we run virtually no risk and where, therefore, there is no need for additional checks. As an example, that was the case with two well-known amusement parks in France, that have been in business for decades.”

Using international credit information

If Vekoma does decide to engage external sources to assess the risks, it uses the information provided by Graydon.

“In some cases, we require additional information about a company, before actually engaging in a collaboration. Especially when an application for financing needs to be made. In that case, the bank requires us to show that our business partner is reliable. For this, we consult Graydon’s database. The more reliable information we can supply to the bank, the better the chance that the client’s credit application is approved.”

But foreign credit information is not used solely to evidence the creditworthiness of specific clients.

“We also research new, interesting sectors. For example, at the moment, the cruise ship industry is a sector that might be interesting for us. We increasingly encounter companies wanting to build rides on a cruise ship. In such cases, we look for market information in a sector that might be of interest to us. That way, we can discover what opportunities such a sector might hold for us.”

Preventing reputation damage

Besides a check into the creditworthiness and exploring new markets, the right information is also used to prevent reputation damage. “It is very important to know who we’re doing business with. Who are the people behind a company? We try, as much as possible, to discover this by ourselves. Even where the law doesn’t require us to do so. But, because Vekoma is part of a listed company, negative publicity could have grave adverse consequences for us.”

“A country like Russia is a good example of a country with a lot of inherent risks. Besides the fact that the MH17 crisis may play a part, you’re also faced with a special customs check into dual use goods. Dual use goods are items that could potentially also be used for military purposes, such as weapons. For requests from Russia, we have had to fill in a form for Dutch customs and we’ve had the components checked in terms of dual use. Luckily, our components turned out not to be suitable for military applications and so we were able to deliver as planned. So, where it comes to Russia, it is important to ensure we’re properly informed in advance, to avoid issues afterwards. After all, failure to comply with these rules could result in penalties.”

Being a reliable business partner

It happens regularly that companies get bad publicity in the media for doing business with a company that turned out to be backed or owned by a criminal organisation. One way to find out whether the company you’re doing business with is reliable, is by finding out who its Ultimate Beneficial Owner (UBO) is. A commercial enterprise like Vekoma, is not required to perform a UBO check, but sometimes it may still be a good idea.

“For our company, it is very important that we are seen as a reliable business partner. That is why we do everything we can to show that the parties we deal with are also reliable. If it turns out a party wasn’t reliable after all, we can still mitigate the damage to our reputation, because we could show that we properly investigated that party but were unable to find anything wrong with them.”

Local production

Doing business internationally often involves transport costs and import rights if the components are manufactured elsewhere. Local production and assembly can sometimes help avoid such costs.

“Currently, China is our biggest market and as such, we’ve built a local factory there. However, engineering and manufacturing of core components always takes place in Vlodrop. In countries where we do not have factories, we often look into engaging a local company for the production of some of the components. If we go into business with a local manufacturer, a Vekoma expert is always sent to that company for quality and safety assurance. Due to our experience and our expertise however, manufacturing in our Dutch factory often remains the cheapest option.”

Good relationship management

Vekoma’s clients are spread all over the world and each have their own cultural customs. “Relationship management is very important to us. When I visit an international client, I try to adjust to local culture and custom as much as possible. Respecting people, their culture and their way of doing business are very important.”

Creating internal awareness about dealing with different clients is perhaps the biggest challenge we face. “With Chinese clients, for example, we noticed that it takes a lot of time to close a deal. It takes many meetings with many different people within their organisation. Before you know it, six months have passed. The communication with the client is not really the issue in those cases, it is a matter of generating internal support. It is important to properly explain internally which client you’re dealing with and what culture and customs they have. That way, your colleagues in the Netherlands understand why some deals can take much longer to close than others.”

More information about Vekoma is available on their website, at www.vekoma.com.