VDE dialog: VDE stands for “Made in Germany” like almost no other organization, but is itself now a global player. How did that come about?
Sven Öhrke: At some point, it was simply logical from the customer’s point of view. Many products – individual components as well as entire household appliances – are no longer produced in Germany. For a long time, VDE was one of the last to say: “We’ll still test everything in Germany.” But when we had to admit that we were losing customers as a result, this was no longer justifiable, and the Testing and Certification Institute therefore gradually set up its first sites in Asia.
The first site outside Germany was opened in China in 1987.
Yes, that was our first sales office. It was followed by further offices around the world, for example in Korea, Japan and Taiwan. These offices provided local advice and support for our customers, but the products were still sent to Germany. Today, in addition to these offices, which are now spread all over the world, we also have local partner laboratories that are accredited to German standards. And we have also set up our own laboratories in Italy, but above all in China. These days, we no longer test the majority of our products directly at the Institute in Offenbach. But this development – i.e. having more than just individual people locally – only started around the turn of the millennium.
VDE Global Services was founded in 2001. What “services” do you offer?
In principle, VDE Global Services GmbH does the same thing at its various locations as the VDE Testing and Certification Institute in Offenbach – we test our customers’ products. We don’t cover the entire portfolio of the Institute, but a very large part of it. However, unlike some of its competitors, the certification authority remains in Germany, which is where the final approval of the certificate takes place. In this way, we ensure the consistent quality of VDE worldwide.
How strong is the VDE brand abroad?
It is very well known in Europe. However, the name VDE also opens many doors worldwide. Chinese manufacturers, for example, know very well that if you want to deliver to Germany, at least one in three buyers will ask for the VDE mark. And the mark is also relevant in China itself, on the domestic market. Major electrical and household appliance manufacturers such as Haier and Midea use our performance mark.
Your customers are mainly Asian companies that want to have products tested for the European market. Is that right?
Yes, that’s our focus. But it also goes in the other direction: the Chinese equivalent of the European CE mark is the Triple-C (China Compulsory Certificate). Such certification is mandatory for 22 product groups, including electrical appliances, cables and machines. And, in contrast to CE marking, certification is not carried out by the manufacturer, but by authorized Chinese bodies such as ours. This means that we can offer such certification to our German customers for some of their product groups in our own laboratory locally if they want to sell their products in China.
In Germany, there’s the Testing Institute in Offenbach, but in China you have now opened several locations with their own testing laboratories. Why is that?
Simply because the country is many times larger than Germany, with around 17 times as many inhabitants. We were also able to set up our last two laboratories – in Zhongshan and Cixi – with the support of the local governments. China is specifically relocating industry from its major cities and offering subsidies for development in new regions. We have benefited from this, just like many other German companies.
Are all sites outside Germany part of VDE Global Services?
No, not all of them. Many sites in Europe consist only of individual inspectors who are employed by the testing institute. In Turkey, for example, we have two inspectors, two auditors and a sales representative – all employed by the Institute. Global Services only includes the sites in China, Hong Kong, Korea, Taiwan, Japan and Italy. And the USA is also a separate division – VDE Americas.
Why a laboratory in Italy?
The Italian market is large – many household appliance manufacturers such as Whirlpool, Electrolux and Haier have production facilities or headquarters there. Italian customers also wanted access to local contacts. So we set up our own laboratory in Fabriano in 2018.
Are there differences between the sites for which they are responsible?
Yes, they do exist. For example: in Taiwan, we have a partner laboratory that only deals with components, such as switches and connectors. In Japan, we mainly do sales and have recently added a partner laboratory for motors and fans. In Korea, the focus is on many new developments in the energy sector as well as on “tried and tested” products – we also work a lot with the government there, but we don’t have our own laboratory, only our own inspectors. In China, on the other hand, we cover the entire portfolio.
Why is VDE not yet strongly represented in India, for example?
The market for our product categories has so far been primarily in China, Korea and Japan. But we have now defined India and Vietnam as focus countries. We are currently building up structures there – mostly through partners, as we do not have unlimited resources to set up our own laboratories. So India is coming.
You also have hardly any presence in South America. Why?
For the same reason. South America is also difficult because every country there has its own regulations, which makes the market confusing. And the return on investment is often slower there. Our strategy is fast growth and great impact. The focus is currently more on Asia, Eastern Europe and the USA.
However, involvement in the USA is still relatively new.
Yes, unfortunately. We simply have to admit that, for a long time, we were too slow in penetrating the US market because we worked with partners such as UL or CSA. But then these “partners” wanted to do their own business in Europe, whereas we didn’t have a foot in the door over there. However, in the meantime we are very well positioned in the renewable energy sector (VDE Americas) and now also want to become a Nationally Recognized Test Lab (NRTL), so that we can serve the US market ourselves. But as I said, this is a separate division within the VDE Group, VDE Americas.
What do you expect from the political situation in the USA?
That’s difficult to predict. The processes, for example for our approvals, are currently being delayed. At the moment, we’re not receiving any feedback from the US authorities. If this worsens, customers could drop out and go directly to the USA for testing – that would be negative for us. On the other hand, a trade conflict with China could lead to Chinese companies focusing more on Europe – which would of course be a great advantage for us.
Sven Öhrke is Managing Director of VDE Global Services and a member of the management board of the VDE Testing and Certification Institute.
