This lawyer and business economist from the second generation of an entrepreneurial family can look back on nearly three decades of Indian business experience.
(Photo: Frederick Laux/PR)
Stuttgart Federal Economy Minister Robert Harbeck (Greens) will travel to India this Wednesday for a few days. Most importantly, closer economic cooperation between the two countries is on the agenda.
Stuttgart-based cable manufacturer Lapp discovered India earlier than other mid-sized companies. As early as 1996, the company established its own production plant in Bangalore, southern India. With more than 5,000 employees worldwide and last year’s sales of EUR 1.86 billion, Lapp is one of the world’s leading suppliers of industrial cables, connectors, data and fiber optic cables.
Co-owner Andreas Lapp also has strong ties to the country. He has been the Honorary Consul of India since 2000. Last year, the 67-year-old handed over management of the company to his nephew Matthias Lapp. In an interview, he described his decades of doing business in India.
Read the full interview here:
Mr. Lapp, you have been active in India for about thirty years and now have 800 employees in two factories and ten logistics branches. How would you rate India?
India now has a larger population than China, growing geopolitical importance, and a Western-style democracy. By 2050, India will be among the five largest economies in the world.
What did a mid-sized German company have to consider when embarking on this adventure?
He has to go to India to start, there’s no point talking about that.
And what should he pay attention to first?
Investors must always decide whether to work with a local partner or go it alone. Working with a partner sometimes things move faster, but Indian companies usually work in joint ventures and have a different decision-making process. Things can get difficult when cultures clash. If he tries it alone, he has to count more approval time etc.
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What should entrepreneurs absolutely not do?
He should never have bribed. Best not to start with this. Works without it.
Are you really sticking to it?
We have never bribed a penny. As an entrepreneur, it is even more important to have live dialogue with authorities, customers and suppliers.
You recently handed over operational management to your nephew. How often did you go to India while you were playing?
Two to three times a year. It’s important to be vigilant and have a personal presence. You have to talk to your partner on an equal footing. Due to my concern for the country, I am still the Chairman of Rapp India and am still coordinating with my nephew on this issue.
How is it different from China?
Coming to India and expecting to build a factory in a year is not going to work. You must take time. This is a democracy. Unlike China, these areas are not being cleared by bulldozers, just relocating people when big investors arrive. This can take a while, but usually you get all the permissions.
“You can’t do something in South India and think it will work the same way in North India”
Then everything is ok?
My experience is that you can get stable site conditions during ongoing operations.
What else is there to consider?
India, like Europe, is a multi-ethnic country with many languages. You can’t do something in a state in South India and think it will work the same way in North India. But it’s no different in Europe. If you invest in Sicily as an entrepreneur, it also works differently than in Norway.
Who do you manufacture for in India?
90% of our products are still sold to the Indian market. Only ten percent is used in other markets.
Is the caste system a problem for German entrepreneurs?
In our factory, the same job always pays the same salary.
But not the same food, right?
For individual groups, the canteen also offers vegetarian dishes.
Mr. Lapp, thank you very much for accepting our interview.
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