At the 2017 International Exhibition Industry CEO Shanghai Summit, leading figures from the exhibition industry in China and abroad delivered excellent speeches. Based on the shorthand transcripts, the secretariat of the Shanghai Convention and Exhibition Industries Association compiled the key points of the speeches and is publishing them in installments.
Speech time: afternoon of June 19, 2017
Speech theme: capitalization of the exhibition industry: capital and industrial development
Speaker: Mark Cochrane, regional manager for Asia Pacific of UFI
Key points:
Opening remarks for this session.
Private capital is becoming increasingly active in China's exhibition industry. As President Chen and Deputy Director Xu Tao mentioned earlier, Blackstone spent USD 500 million to acquire Global Sources. Other large private equity companies have acquired exhibition companies in China, and some European private equity firms have acquired stakes in animation and comic exhibition businesses. In this section on capitalization of the exhibition industry, we will discuss capitalization from different angles of capital operation and from the perspective of mergers and acquisitions.
Speech time: afternoon of June 19, 2017
Speech theme: capitalization of the exhibition industry: capital and industrial development
Speaker: Jim Essink, president of UBM Asia
Key points:
UBM's acquisition of Allworld Exhibitions.
All of UBM Asia's capital operations are centered on the core strategy of events first. Whether for large exhibitions, small events, or the launch and development of new projects, precise planning and investment are needed to ensure revenue growth and profit margins. The goal is not to pursue quantity blindly, but to pursue quality. In addition to setting the revenue target for each event, organizers should also pay attention to long-tail effects and build a relatively complete and extended value chain.
Over the past few years, UBM Asia acquired Advanstar and Allworld, and these acquisitions brought large-scale restructuring of the organization. A successful acquisition first requires strategic alignment between the two sides and complementary business segments. Second, effective integration of organizational structure and resources is needed to obtain cost-competitive synergies. Third, business processes and standardization should be further strengthened. Finally, it should be recognized that cooperation, synergy and customer centricity are the keys to integration and communication among management and teams.
Speech time: afternoon of June 19, 2017
Speech theme: capitalization of the exhibition industry: capital and industrial development
Speaker: Song Yanjun, president of Lingnan Garden Group
Key points:
Capital operation by Lingnan Garden Group in the exhibition industry.
The entry of capital into the exhibition industry is an inevitable trend, and domestic main-board listed companies will create a new pattern in the industry ecosystem. There are different types of mergers and acquisitions in the exhibition industry. One is heavy-asset acquisition mainly involving venues and exhibition organizers, and the other is light-asset acquisition mainly involving operations. Heavy-asset investment models can produce great uncertainty because of project operation and management experience. Therefore, in laying out its cultural tourism business, Lingnan Garden chose a light-asset investment model that fits the group's development strategy. We have carried out acquisitions in multiple locations, targeting companies with integrated capabilities in exhibition display design, production, construction and event planning. The acquisition of Demage is important because it lays a channel and resource foundation for new business development and provides strong support for strategic growth.
Speech time: afternoon of June 19, 2017
Speech theme: capitalization of the exhibition industry: capital and industrial development
Speaker: He Fei, deputy general manager of China Merchants Shekou and general manager of Shenzhen China Merchants Real Estate
Key points:
Building a new global benchmark for exhibition venues.
Shenzhen World Exhibition and Convention Center brings together global wisdom and has global partners. Our goal is to build a new global benchmark for exhibition venues. The center is a major project invested and constructed by the Shenzhen Municipal Party Committee and Municipal Government, and Phase I is scheduled to be completed and put into operation by the end of 2018. In August 2016, two central state-owned enterprises, China Merchants Shekou and OCT Group, jointly won the bid. The two parties established Zhaohua Exhibition Operation Company, which will operate and manage Shenzhen World Exhibition and Convention Center together with the U.S. company SMG.
China Merchants Shekou and OCT are participating in this project not merely as a real estate project, but as a new step to expand industrial layout. Through the operation of the convention and exhibition center, they aim to build an open, transparent, shared, win-win and innovation-oriented platform, create an important industrial hub, and cultivate long-term development potential for the city.
Speech time: afternoon of June 19, 2017
Speech theme: capitalization of the exhibition industry: capital and industrial development
Speaker: Mark Temple-Smith, chief executive officer for Asia of Tarsus Group
Key points:
Choosing the best international merger and acquisition partner.
Mergers and acquisitions are like marriage. Both sides face many specific issues, such as investment ratio, controlling party, sustainable operation, and detailed venture capital matters. Therefore, the first consideration should be synergy in capabilities and value, together with shared vision, corporate culture and values. Second, there should be synergy in decision-making mechanisms and processes. Third, corporate governance and rigorous operating methods should be determined. On this basis, a more effective working team can be built, better return on investment can be achieved, and the effect of two plus two equaling five can be realized.
