Ron Ball is a winner in CCBC’s 5 at 50 Entrepreneurs category. Now retired, Ron founded the Escalator Handrail Company, later renamed EHC Global, in 1977 in Oshawa, ON, with only one employee, and his success sets a great example of how dedication and commitment can contribute to the Canada-China relationship. In 2018, Ron became one of the few Canadians to receive the prestigious Shanghai Municipal Government Magnolia Silver Award.
Highlights from Sarah’s conversation with Ron:
• Any of our listeners who have been to China know just how many escalators there are (and thus how many handrails are needed). Big drivers of demand for escalators: malls and transit (bus stations, airports, subway systems). EHC’s expansion into China in the 1990s was a classic case of following customers into the market. Now 75% of the world’s elevators and escalators are built in China. EHC is a mid-size global company, with operations in 15 countries and manufacturing in Canada, Germany and China. 60% of global sales are at EHC’s Shanghai operation.
• When the Asian financial crisis hit in 1997, Ron moved to China to take charge there, but EHC’s headquarters stayed in Canada. Ron remained living in China for more than 20 years. Even though the market shifted to China, Canada benefited greatly by this arrangement, with stable employment in Oshawa, ON, including keeping the R&D operation at headquarters. Early in the Canadian operation EHC exported a lot, especially specialty items. Keeping R&D in Oshawa was partly for intellectual property (IP) reasons but also because Canada has better engineers.
• Ron attributes his success as a CEO in China to having strong soft skills – it’s important to be tolerant, patient, and open-minded.
• EHC was afraid of having its IP stolen in China, but that didn’t happen. Why? At first they only brought in old technology; it wasn’t until 12 years ago that EHC brought its best technology to China. When it did, EHC took critical steps – setting up a separate manufacturing plant site with a cadre of employees who had been with the company for more than 5 years, having a high level of security, and being very careful with documentation. Raw material shipments were sent first to a separate warehouse where all identifying information was stripped off. They also gave confidentiality bonuses – 20% pay increase, identified as a confidentiality bonus, so that it would have merit in labour court in China.
• EHC’s company culture has been a huge strength. What does EHC do differently than a typical Chinese company? EHC has strong HR leadership, pays well (not exorbitantly), treats people well, and this results in much lower turnover than average. The factory is highly effective and efficient – equal to or leading their global operations. They treat people like family, and they respond with loyalty.
• Advice to a company considering doing business in/with China today? Ensure there is a market for your product in China. Don’t look for low cost labour. Hire good advisors (accounting, legal, etc.).
• Ron describes the COVID-19 quarantine experience in returning to China last year.
This multi-part miniseries is sponsored by Manulife.