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In China it would be quite possible to give an agency to a firm without arousing jealousy amongst the others as is the case in Japan, and in my opinion, the best way to conduct and increase business in China would be to appoint a firm having offices in Hongkong and Shanghai, as agent, and to stimulate them by frequent visits of the individual acting as repre- sentative in Japan of the manufacturers. This representative could also act as the general Far Eastern representative, for the manufacturer.
Trade conditions in China are so complicated that if losses are to be avoided, local and up-to-date knowledge is absolutely essential. The finan- cial position of native firms changes rapidly, and it would be difficult for an individual conduoting business for a firm in the Far East to keep up-to- date.
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There are certain points to be considered in the selection of a firm to act as a representative. In China "face" is everything, and for this reason it might be thought that the larger and better known a firm, the better they would be as representatives. My experience, however, is that a small sound firm would make a better representative than some of the princely Hongs." Large firms have such ramifications and have so many agencies that unless the agency happens to be an extraordinary good paying one it is apt to be neglected, and that they sit down and wait for business to come to them rather than go out and look for it. The overhead expenses and complicated channels of sale in the bigger firms cost so much, that unless, as I have said, the agency is a paying one, it is not worth their while to take it up seriously, even though stimulated by frequent visits of a prin- cipal or senior representative.
SIBERIA AND THE KAMCHATKA PENINSULA.
Of late British tinplate manufacturers have begun to turn to Siberia as a possible market for their products. Already considerable trade has been done with the ARCOS Company in London, but purchases made through this department have gone chiefly to the Caspian and Black Sea areas.
The purchasing of tinplate for the Far East is made by the Soviet trade organisation in Tokyo. This organisation makes its representations and recommendations direct to Moscow headquarters, who usually act on this advice. Certain members of the Tokyo organisation, being expert fishermen themselves, are au fait with the requirements of the trade, and mistakes in sizes and quality are therefore less likely to arise.
If we wish to increase our trade--and we are already late in the field-we should be prepared to take credit risks, to face possible losses with a view to ultimate gain, and show Russia that we are out to do business.
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This business could be quite easily carried on by the individual selected as the Far Eastern representative for the British manufacturer. might be necessary for him to occasionally visit Vladivostok, where there is a large can-making factory, and possibly once every few years to visit Saghalien and the Russian fisheries of the Maritime Province, but once the requirements of the trade had been studied, business could be carried on from Tokyo.
In conclusion, three things appear to be certain-firstly, business can rarely, if ever, be satisfactorily handled under modern conditions by cor- respondence only without some kind of personal representation in the market; secondly, the selection of agents requires the greatest care and attention; ard thirdly, the employment of agents, however trustworthy, does not relieve the firm of the necessity of maintaining close contact with the market. It is, in my opinion, essential that principals should pay frequent visits to all important markets of the firm. While the policy of giving a substantial degree of responsibility to the representative on the spot is
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advocated, it is impossible for an intelligent selling policy to be maintained by headquarters, unless there is first-hand knowledge there of the market and its developments.
One important point more there appears more inclination on the part of foreign competitors to grant credit facilities than is the case with British firms, and we undoubtedly suffer in this respect. If credit is to be given, first class up-to-date information regarding the financial status of firms must be available, and it is not possible for a firm to be kept thus posted unless they have representatives on the spot who can keep in close touch with clients.
(Signed) R. T. NEVILL.
27th October, 1930.
NOTES ON THE TINPLATE TRADE IN SIBERIA (VLADIVOSTOK) AND MANCHURIA. (Supplementary to Notes, dated 27th October, 1930.)
The tinplate market in Siberia would at first sight appear to be a most favourable one for manufacturers at home, and will probably increase during the next few years, but this depends entirely on the attitude adopted by them towards trading with the Soviet Government. The chief com- petitor is, of course, America through the United States Steel products Corporation. Russia herself is also a competitor in "oil sizes" to a limited extent, but the quality is poor and the plates should never be used for food canning although they can be used for oils.
The two buyers in Vladivostok are The State Fishing Trust, Soiuzryba,' A.K.O. (Akzionernaya Kamchatka Obshestva), A.S.O. (Akzionernaya Sagah- liensky Obshestva), and the Neft Sindikat.
Soiuzryba purchases for A.K.O. and A.S.O. and has the cans made up at the A.K.0. Can Factory at Churkine across the Bay; and the Neft Sindikat purchase through ARCOS in England, the kindred organization in the United States, or direct from the Lisvievinsky Tinplate Works at Lisiev, Perm, Urals, and make up their cans themselves. In rush seasons the Nihon Seikan Kaisha Hakodate also make for Soiuzryba, the majority of crab cans having been made there hitherto. Crab can are now being made at Churkine, as suitable supplies of lacquer have been obtained. Soiuzryba must take approximately 20,000 tons per annum or 400,000 basis boxes, and the Neft Sindikat about 50,000 basis boxes, although this figure is uncertain. Both organizations are subject to control from Moscow, but Soiuzryba appear to have more freedom of action than the Neft Sindikat; and, although not allowed actually to purchase direct, have power to influence the source of supply, in that, being engaged in food canning they cannot be pressed into taking an unsuitable plate.
The A.K.O. Can Factory at Churkine appears to be well run and managed. Troyer Fox full automatic plant is used, there being two lines running at 200-250 cans per minute.
Trouble has been experienced with the flux used for soldering the vertical seams, and the hydrochloric acid therein caused a great number of last year's cans to become useless through rust.
They have also had minor troubles with rubber solution for sealing, but these have been overcome and the quality of the cans now produced appears excellent. All plates used are supplied by the U.S.S.P. Corp.
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