Harmony Reigns on Shop Floor

A rapidly growing company

Indeed, Byung Hyung Kim and Ji-Won Kim find their Dutch workers rather more flexible than what they have so far been used to in the European labour market, and better at handling the pressure of the workload in a rapidly growing company.

"That surprised us at first," admits Byung Hyung Kim, President of Benelux Sales and Marketing. "An additional advantage is that employee productivity is higher here. And that means that our labour costs per product are very reasonable in European terms. However, we do have to deal with the consequences of a slow, somewhat overstrained, labour market. It takes more and more effort to find suitable candidates for our job vacancies."

Attractive Almere

For Ji-Won Kim one of the advantages of doing business in the Netherlands is the great capacity and high quality of its logistics cluster. LGE uses the concept of bonded warehousing, for example: a license or 'bond' is arranged with the local customs authorities for goods intended for onward transit, so that these can be temporarily stored in Dutch depots without paying duties. This means important time-savings, but also lower transhipment costs, plus reduced administrative charges for carrier and commissioner. "That gives us a competitive advantage," says Ji-Won Kim.

Shared service centre (SSC)

Another development to emerge in recent years is the shared service centre. Says Byung Hyung Kim, "With the extension of our European network, we found we had a growing need for a centre in which we could centralise and standardise a number of supporting services for our branches in other European countries. For this reason, we have set up SSC in Almere, and that's where we have now brought together the management and development of our accountancy and financial functions as well as IT."

"Also, in that respect the Dutch identity of our company here is an advantage. The Netherlands has open reporting standards that dovetail well with the accountancy principles of the other countries where we are established. Moreover, the tax conditions for corporate financing are very favourable, and for this reason we are already consolidating our European operations here. Moreover there's considerable know-how here, both in the field of IT and regarding how you can best set up a centre like an SSC."

The fourth and final advantage of locating LGE's operating base in Almere is the multilingualism of the working population. The company's operating language is English, and Byung Hyung Kim and Ji-Won Kim are still frequently surprised by the ease with which the Dutch can communicate in a language not their own. "That is an enormous asset," says Byung Hyung Kim. "Misunderstandings caused by language problems hardly ever happen, and that helps us to keep a grip on our distribution chain which includes so many different language areas."

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Photo: Philippe Vogelenzang