Jereh poised for a gusher of growth in US

Updated: 2014-04-08 07:24

By Du Juan (China Daily USA)

  Print Mail Large Medium  Small 分享按钮 0

Private Chinese oil equipment company establishes a presence in the United States to grab market share, reports Du Juan from Houston

About 19 kilometers northeast of Houston, 39 acres (about 16 hectares) of office buildings and factories hold a dream for a Chinese-Amercian business team to establish a brand in the United States.

Yang Li, a Chinese-American in her 50s, used to be the owner of a construction company in the Texas city, but now the company is in her husband's hands.

Yang joined the private Chinese oil and gas equipment manufacturing and engineering company - Jereh Group - in 2011, when Jereh decided to enter the US market by establishing office in Houston - a place that is a must for any oil-related business.

"I hope Jereh can become a brand that is accepted and rooted in the US even though it will take time and the path is not easy in such a competitive market," she said.

Headquartered in Yantai, Shandong province, Jereh sold its first set of equipment to the US in 2005.

When the shale gas revolution boomed in the North America three years ago, the company seized the opportunity, becoming the first Chinese company to import shale gas fracturing equipment to the US.

To better serve clients and find new buyers, the company decided to expand in the US by hiring Yang as deputy general manager of American Jereh International Corp.

Jereh poised for a gusher of growth in US

As a world-famous oil city, Houston is home to about 5,000 energy-related companies. In addition, up to 45 of the top 200 listed oil and gas companies in the US are headquartered there.

"It's a place full of resources and opportunities for oil companies from all over the world," said Yang.

"However, compared with strong local players with 30 to 50 years' history in this business, we need to work harder as a newcomer," she added.

Due to a perception that Chinese products are of low quality, user error can has sometimes been considered to be a manufacturing problem, which has led to disputes.

"Whenever that happens, we send our engineering team to provide free training to the clients' operators," said Yang. "As a new Chinese oilfield equipment producer and a newcomer in the US market, we need to remove any concerns on the part of clients by giving them a clear signal that we are devoted to the market and will always be there when the products they bought from us have any problems to solve.

"As a brand that is not well-known in the US market, each of our clients is a precious resource for promotion," said Yang. "When they see that our products are of high quality, they will introduce us to other companies. That's how we can grow."

Jerry Griffith, senior officer with American Jereh, who has been working in the US oil industry for more than 30 years, said the company still faces challenges in expanding in the US.

"I love Jereh, but it has difficulties in marketing," he said. "There are teams of Chinese employees who are responsible for client maintenance here. They speak English well, but they don't know what all the words mean," he said.

"The network is crucial for any business. That is no exception anywhere in the world," he added.

Yang admitted that it's hard to compete with big names, "but we still need to seek new clients and keep them satisfied with our products and services", she said.

She said the company, which expects to double its number of clients this year, has been learning from its US counterparts. It established several engineering teams to solve problems for users around the clock.

The company also developed a strategy to grow profits from after-sale services and components sales than just selling equipment.

"It's common with US equipment manufacturers that profits from the after-sale sector are higher than new product sales," Yang said. "We are also heading in that direction."

The Chinese player now offers a full package of after-sale services, providing many options with which clients can solve problems and save costs.

The US market is now Jereh's most important overseas, according to the company.

Cheng Yongfeng, the group's board secretary, said the company's exports accounted for about 40 percent of total revenue in 2013, and its long-term goal is to expand that figure to 60 percent in the next five to six years.

"The US and its shale gas industry will play a big role in Jereh's overseas development," he said.

The company plans to make Houston its North American center for product fabrication and exhibition, as well as for after-sales service and research.

"As the shale gas industry becomes more mature and stable in the US, the potential demand for equipment is huge," said Yang.

As one of the founders of American Jereh, Yang said: "I would love to contribute to the company, passing along what I know to the young team here, establishing a reputation and brand of the company here."

Contact the writer at dujuan@chinadaily.com.cn

Jereh poised for a gusher of growth in US

(China Daily USA 04/08/2014 page13)

8.03K