Multinationals eye further investment in local research

Top multinationals are eying further investment in local research efforts for faster adaptation to the Chinese market landscape.

Foreign-funded research and developments activities are considered key to realizing the goal of making Shanghai an international science and technology innovation center.

German specialty chemical company LANXESS expects that two or three more business units will locate their operations at the Asia Pacific Application Development Center in Shanghai, in addition to the four units already there, to further upgrade local development capabilities.

LANXESS Chief Executive and Chairman of the Board of Management, Matthias Zachert, who visited China for the first time since 2019, said last week he has high hopes for innovations originating from the company's local research facilities.

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"The Shanghai Foreign-funded R&D Center Enhancement Plan" unveiled earlier this month by the city government proposed further measures to simplify Customs clearance and supervision processes for research materials of foreign-funded R&D centers, and to facilitate quarantine approval.

By the end of January, Shanghai was already home to 563 foreign-funded research and development centers.

"I'm deeply impressed to see the smooth progress and operations at the development center and we want to convince more business units to locate their research activities at this facility, to enhance local innovation efforts and stay close to customers and market trends," Zachert said.

Zachert is a firm believer in home grown innovations serving local industry solutions and also believes this serves the company's interests to pursue faster adaptation to local needs and aspirations.

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Chief Executive Officer and Chairman of the Board of Management at Signify, Eric Rondolat, also expects more innovations will come from China as it steps up adaptation to local situations.

Following an organizational restructuring last year which integrated product development, marketing and sales, logistics and manufacturing into one unit in China, the company is better prepared to respond to local needs in terms of new product design and offerings.

Despite already being the company's second biggest market, he still believes in China's high potential and its fully integrated organization allows the company to privilege "China for China," and he highlights the need to be present in the Chinese market to capture opportunities.

"In the future, a lot of the success that we have in China will be developed and produced in China and innovations originating from China not only have the potential to extend influence in Asia, but also potentially to Europe and the US," he said in a recent interview in Shanghai.

During Rondolat's visit to China where he meet customers and research staff, he also got to see the latest research development and technology upgrades in automation and connectivity.

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A joint clinical research program was launched last week by Nestlé Research & Development (China), Wyeth Nutrition, and top local hospitals such as Shanghai Jiao Tong University School of Medicine's Xinhua Hospital to verify the clinical effectiveness of two HMOs for Chinese infants.

It also plans to further step up research efforts for localized infant recipes and speed up new product launches in the near future, according to Shiela Qiu, regional business head of Wyeth Nutrition China.

"It's essential to keep up the same speed as local brands and maintain our forward-looking approach for product research," she said.

Wyeth launched the liquid milk containing two types of HMOs which were approved by the National Health Commission to be used for infant formula.