US President Donald Trump told China’s State Councilor Yang Jiechi in a meeting last week that Washington is willing to cooperate with Beijing on projects related to its One Belt, One Road initiative (Obor).
That’s good news for Shane Tedjarati, the president of Honeywell International’s global high-growth regions unit, because Obor is a major building block for Honeywell’s business in China and Asia.
The American multinational conglomerate produces a variety of commercial and consumer products, engineering services and aerospace systems.
Tedjarati oversees Honeywell’s business expansion in fast-growing markets such as Asia, Africa, Latin America, the Middle East and Eastern Europe, where it now derives most of its growth. Here he discusses how it plans to participate in Obor in an email interview.
Is Obor a real growth opportunity for Honeywell? Why?
Yes. [Obor] can bring huge opportunities to Honeywell. Honeywell offers a wide range of China-made, world-class solutions including building and process controls, personal protection equipment, and safety and security products that are helping to resolve some of the most critical issues being faced as the construction of Obor continues.
Critics say Obor will only benefit Chinese firms. Is this true?
Obor promises to raise the level of connectivity, cooperation and trade between dozens of nations that have traded with China for thousands of years. Multinational companies like Honeywell can bring a set of technology solutions to Chinese engineering procurement construction (EPC) companies throughout the value chain.
What cutting-edge technology does Honeywell have that China and others would want to use for Obor?
For example, Honeywell can integrate the distributed control system (DCS), Honeywell UOP’s expertise in processing, fire detection, security devices, and gas detection technologies, which can help EPCs get the best possible return on investment for big energy and infrastructure projects.
Does Honeywell plan to be a player in Obor initiatives in Europe and Africa? Where?
Honeywell’s “Follow The Growth” campaign was developed to help Chinese companies become more global and create new opportunities in high-growth regions such as Asia, Africa, East Europe, and the Middle East.
Can you explain Honeywell’s “East for East” and “East for Rest” strategies and how they relate to Obor?
Through our East for East (E4E) strategy, we identify China-specific needs and meet them with locally-developed innovations. Currently, about 40% of our revenues in China come from E4E innovations and products.
E4E solutions then support our East for Rest (E2R) strategy, the transfer of China-developed innovations to the “rest” of the world, especially in high-growth markets, where they can be further tailored to meet the needs of various sectors served by Honeywell.
How does that fit with Obor?
Under the E4E and E2R, we closely align with the Chinese government’s One Belt, One Road strategy and proactively advocate locally developed innovations and partner with leading Chinese companies to “go out,” especially in international development and energy projects.
What percentage of Honeywell’s revenue comes from China? From Asia?
In 2016, Honeywell’s global revenue amounted to US$39.4 billion, of which US$2.4 billion was generated in China, with all of its business units achieving steady growth.
Do you expect oil and gas development to be greatly expanded under Obor and how would Honeywell benefit?
Honeywell will continue to work with its partners to support oil and gas development [for Obor].
For example, we were selected by Asia Trans Gas to provide automation and safety technology. This was designed to help manage their operations and establish safer working conditions along the third pipeline of the Central Asia-China Gas project.
The pipeline became operational in 2015. The same Honeywell technology is in use in the project’s first two pipelines, which are already in operation [carrying gas to China markets]. Asia Trans Gas is a joint venture of China National Petroleum Corp and the Uzbekistan national holding company, UzbekNefteGas.