Belgian SMEs abroad: for Sofico, going international was not a choice

Sofico, based in Ghent, sells its software solutions for car finance, leasing, and fleet and mobility management on a worldwide scale. Their target group is exclusive: large players on mature markets.

Quotations, contracts, insurance, fuel cards, maintenance, winter tyres, repairs, fines, and more – lease contracts are rather complicated. Not in the least because of the large variety in local legislation and commercial customs. Wim Bauwens (Marketing and Communications at Sofico):

"Our software package Miles covers the entire lifecycle of such contracts. It is a global solution but with a local implementation, adapted to the market and the company."

Sofico was founded in 1988. The company has 190 employees, of whom 45 are in Australia, 25 in Japan and 20 in France. Its target group is large leasing companies with 5,000 vehicles or more. The substantial investment is just not feasible for smaller companies. Going international was not simply a choice, but essential. Wim Bauwens :

"In Belgium, we had a dozen potential customers. The Netherlands seemed a logical first international step. Shortly afterwards, in the middle of the 1990s, an Australian leasing company asked us if we wanted to work for them. We started by sending people to the other side of the world for a few months, but after a few years we set up a branch."

The next international step – looking at Japan – was on Sofico's own initiative. Handling that market from Australia was not an option. In 2012, the company started to explore the market with a prospecting branch and three Japanese employees. That took about two years. Changing the core software package is an expensive and major decision for the customer, with a long decision-making process. Only when we had customers did we start working on the other functions. Sofico always worked together with local recruitment companies. Wim Bauwens:

"Japan is a mature market, like Western Europe. It has large leasing companies with up to 100,000 vehicles. Many services are also linked to the leasing contract, which makes product management rather complicated. Japan also has a complex, fragmented market with regard to legislation as each province has its own tax rules. It is an ideal environment for a flexible software package like ours."

Two years of prospecting without customers costs a lot of money, but the shareholders, who are also working for the company, were happy to try it. Wim Bauwens:

"Sofico has a healthy cash reserve on its balance sheet and is also able to make decisions without external shareholders breathing down their neck. This has paid off as we managed to get a customer from the Japanese top five rather quickly. The fact that management is able to decide independently on investments bore fruit again in 2014. At that time we made our first acquisition: Car Systems, a French company specialising in the leasing and short-term letting of trucks. It was an unforeseen opportunity which suits our strategy: we are not only looking at new countries but also at broadening our scope. Our next priority is the American market. There has been some interest but our potential customers do not recognise their product in our European set-up. We have to work on 'Americanising' it a little."

Adapting to local laws and customs is in Sofico's DNA. Its IT consultants work in 19 different countries, and they have enough cultural sensitivity and flexibility to understand that each culture has its own view on things.

Wim Bauwens:

"The Japanese are proud of their culture and Japanese companies are clearly preferred above foreign companies. For our Japanese customers we are a Japanese company, despite its Belgian origin. When the Belgians are in town, our Japanese colleagues love showing them a bit of Japanese culture. That's going well. IT people are the same the world over."



Belgian SMEs abroad: first China, then the rest of the world for Punch Powertrain

In 2006, Punch Powertrain was on its last legs. Ten years later, the Sint-Truiden based company is a world player in automatic gearboxes. Their success story started in China.

European drivers are still holding on to their manual transmissions, but automatic is standard in the rest of the world. The arrival of hybrid and electrical cars has meant that European car manufacturers are increasingly taking the same route. Punch Powertrain is loving it. This company, based in Sint-Truiden, designs and manufactures automatic transmission systems – today for the Asian market, tomorrow for the rest of the world.

We are astounded when we park our car in front of Punch Powertrain. To the left and right, new buildings are appearing at Chinese speed. CFO Bart Delaere:

"Things are going well. Last year we doubled in size. Automatic transmissions were already being produced here between 1972 and 2008 by various owners, and near the end of that period for BMW's Minis. In a top year, they would send out 35,000 transmission systems. By the end of this year we will produce 50,000 systems... per month. Worldwide we have 1,200 employees, some 300 of whom work in R&D. By 2020, the R&D department will be employing 740 people, of which 600 in Belgium."

However, the start was not at all rosy. When BMW decided in 2006 to change supplier, Sint-Truiden did not know what to do. The contract with the German manufacturer ended in 2008, and no other customers were to be seen on the horizon. Despite this, a number of Belgian investors saw the company had potential. Not in Europe (a saturated market with little demand for automatic systems) or the US (a market in crisis with cars too heavy for the Belgian systems), but in the Asia-Pacific region. The first task for Punch Powertrain was to conquer China. Bart Delaere:

"Our CEO, Cor van Otterloo, used to work for Philips and knew China well. We developed a triple strategy of which we are still proud today. One: we need more customers. Two: we need more products. Three: we need greater geographic distribution."

The search for customers began in China. Punch Powertrain visited every Chinese car manufacturer, which is quite a task as there are 150 of them. Today, 15 are customers, including Volvo owner Geely. Proton in Malaysia is also a major customer. How did the Belgians manage that? Bart Delaere:

"Unlike the large Japanese players, we were also interested in producing smaller series. We also offered the Chinese to take control of the entire development process: software changes, adaptation to the engine, etc. We also consciously use the strategy of a local production for local customers. The R&D and production of core components is and remains here, but assembly is carried out at the customer. Our Chinese customers consider Punch Powertrain a Chinese supplier.

Even before we had one customer, we arranged a share deal with an existing company in Nanjing and converted it into a transmission factory. The management team we brought together at that time is still there, which is something special in China. The team consisted of people we had already worked with and we could trust. That is very valuable."

The second step of the strategy was aimed at an increased variety of products. Currently Punch Powertrain only produces CVTs, continuously variable transmission systems. The R&D department is working on a cheaper automatic system, a CVT which can also power heavier cars, and systems for hybrid and electrical cars. Bart Delaere:

"When we are able to cover the entire range we can start the third step in our strategic plan and contact the bigger players worldwide. Whether it will work or not, only time will tell. In 2006 we were virtually gone, and in 2016 we are back on the radar. We work in a flexible and cheap manner, are prepared to do small series and are able to quickly respond to demands. We want to keep it that way. We are growing well, but with regard to our working methods we want to remain a small, horizontal organisation with short lines. This flexibility is proving to be beneficial."

How Chinese is Punch Powertrain?

Bart Delaere:

"In China they consider us a Chinese supplier with Chinese management. That doesn't mean that we do everything the Chinese way. Before, many workers lived far away from the factory and slept on site, sometimes with their family. We didn't like that. So we immediately flattened the sleeping quarters and moved our employees to the city. We also installed heating and air-conditioning, as people were sitting with a heavy coat in the office in winter and in summer it was often unbearably hot. Out there we look after our employees, as we do in Belgium. We use a single status for employees and make no distinction between white-collar and blue-collar workers. The incentive programmes apply to everyone. We get a lot in return. Last year we had so much work that we almost had to cancel all leave, but we had enough employees who volunteered to come to work."

What is the role of the bank in this expansion?

In 2009, BNP Paribas Fortis and two other banks were involved in the restructuring of Punch Powertrain, says Jo Peeters (Relationship Manager at BNP Paribas Fortis):

"We provided the financing together with ING in Belgium and KBC financed in China. The restructuring wasn't all that easy as they needed new customers, but we trusted the shareholders and management team, and their business plan. They demonstrated that it could be done and have proven it. In their first year the turnover went from zero to €50 million. That was amazing. It is also great to see that their strategy of ten years ago is still going strong now."

At the start of 2015 the financing structure changed. Upon request of the customer, the Bank of Nanjing, a BNP Paribas subsidiary, took over the financing package in China. BNP Paribas Fortis became the mandated lead arranger for a new investment plan amounting to €270 million. Jo Peeters:

"BNP Paribas Fortis has taken on the majority of the financing and the balance is shared between KBC, ING and Belfius. This amount of €270 million is invested in phases in buildings and production machines in Belgium and China. We are also setting up a representative branch in India. Punch Powertrain proves that Belgian companies are also able to innovate and conquer foreign countries. The company is quick and flexible. As a financing bank we have to be quick in our responses and anticipate situations. We will be glad to continue to support them in their global plans."

Shortly after this interview, Punch Powertrain announced that its shareholders have entered into an exclusive purchase and sales agreement with the Chinese group Yinyi to purchase 100% of the shares of Punch Powertrain in Limburg.



Belgian SMEs abroad: AMOS technology spreads to the 4 corners of the world

Based in the Liège Science Park in Angleur, AMOS is scoring high with its professional telescopes and aerospace systems. 95% of its turnover is made abroad.

The Cerro Paranal mountain in the Chilean Atacama desert is more than 2,600 metres high. The sky is clear nearly every night, there is hardly any pollution and the atmosphere is also causing little disturbance: ideal circumstances for the Very Large Telescope. This European astronomical observatory consists of four large and four smaller telescopes, with a diameter of 8.2 and 1.8 metres respectively. Is there a lack of chauvinism? The fact is that few are aware of the amount of Belgian expertise that has gone into this advanced observatory. The telescopes of 1.8 metres in diameter are, for instance, built entirely by AMOS in Luik, says CEO Philippe Gilson:

"In Chile they are mounted on top of a tunnel system so that they can work together as one enormous telescope with a diameter of 100 metres. We also supplied various components for the four larger telescopes."

AMOS was founded in 1983 and combined the mechanical expertise of the engineering company Ateliers de la Meuse with the optical knowledge of the Institute for Astrophysics of the University in Liège. AMOS currently operates in three sectors. They develop professional telescopes and components for the largest observatories around the world, and produce on-board telescopes and instruments for satellites. Philippe Gilson:

"Another focus is the space simulators in which satellite components are tested. Space is a vacuum and the temperature is -270°C, but in the sun this can increase to several hundred degrees above zero. In this type of simulator it is tested whether or not everything continues to operate under these extreme circumstances. In our discipline precision is the keyword. Our technicians polish mirrors with a diameter of almost 3 metres. The surface is exact to a few dozen nanometers – and a nanometer is a millionth of a millimetre."

Some other companies in this niche sector specialise in one or more products, but AMOS' strategy is to diversify. Philippe Gilson:

"The astronomy and space sectors are cyclical markets. When economies are flagging, research budgets are often the first to be cancelled. The more we diversify, the better our chances for a stable workflow. This strategy is proving successful. Last year we grew by 25% and our order book is full for the next three years. We want to keep it that way. It would be a real waste to let people go after such careful training."

AMOS has no off-the-shelf products – all work is tailored to specific projects. The expertise of this company based in Liège is known worldwide and 95% of its turnover is derived from export. With a share of 44%, the European Space Agency is its biggest customer. Most European observation satellites contain telescopes or other components made by AMOS. The company is also working in the USA, Russia, Turkey and Vietnam, and currently China is a strong grower. Philippe Gilson:

"A third of our turnover is currently realised in India. We have collaborated on the construction of two astronomical observatories, the largest of which is situated in the Himalayas. India is a country on which we have had a specific focus for a number of years. It is an emerging economy with a well-trained elite wanting to play an international role in the scientific field."

Our Belgian engineers and technicians happily go on trips to the Himalayas. The basic comfort level is largely compensated for by the adventurous nature of the job. Philippe Gilson:

"In large companies people are sometimes prepared for foreign missions, but for an SME with 90 employees things are a little different. Our employees have learned to adapt over the years. As Belgians it's not a big jump: we are a country with different languages and Belgium is so small that we have to be open to the rest of the world."



Starting operations abroad: dos and don’ts

Are you just starting to consider operating abroad or do you already have a project in mind? Ten tips to lend force to your cross-border ambitions.

1. Plan your strategy as early as possible

Sooner or later, a company that wants to continue to expand will have to seek opportunities abroad. However, foreign trade is beset with risks, and funding foreign trade transactions can be a major challenge. That's why it is important to draw up a step-by-step growth strategy as early as possible, so that you can take account of these factors from the start.

2. Gather together the requisite expertise

If you enter a foreign market without knowing the local legislation, administration and culture, you could waste a lot of time and money. So you would be well advised to call upon a specialist – and preferably local – partner to help you on your way from the outset.

It is especially important to obtain legal advice in order to opt for the most appropriate type of company, comply with all the relevant regulations, conclude watertight contracts or qualify for any tax breaks.

3. Get to know the market

Tapping a new market shouldn't be a leap in the dark, so always start with a thorough (external) market study. How exactly does it differ from your home market? How is the market developing and what will be the impact of demographic trends? Who are the major operators in your sector and what is their strategy? Are the necessary infrastructure and logistics in place?

And probably the most important question of all – will your products and services actually fill a gap in the market? Don't ever assume that your chosen target market is just waiting for your product or service. You can't take it for granted that something will do well just because it is 'exotic', new and/or of better quality.

4. Consider the best way to approach the market

Are you starting up an independent entity, looking for a partner or taking over an existing establishment? Each of these has its specific pros and cons, so consider them carefully. You should definitely not throw yourself into something before having a clear idea of the financial implications, but should rather take a cautious approach with an assessment of the costs and benefits at regular intervals.

5. Respect the local customs and practice

Whether you visit in person or arrange a video conference, it is always a good idea to find out about local business etiquette and act accordingly. Different cultures may have very different ideas of what is appropriate, for instance when it comes to the right greeting, dress code, way of conducting meetings, eating habits or use of time.

6. Recruit the right people

Recruiting the right people is a significant factor in the success of your activities abroad. Finding the right sales representatives is of primary importance. First and foremost, they must be totally familiar with the local market; you can always provide them with the product knowledge at a later stage.

And when you are recruiting, remember that the local legislation, wage policy and union customs may be very different from Belgium.

7. Keep an eye on things

Stay in touch with your contacts on the spot. This is partly a way of staying in control, but it is also a very good way of proving your commitment. This does not necessarily mean you have to make a visit. Skype, WebEx and other forms of video conferencing are cheap and easy alternatives when it comes to matters that cannot easily be arranged by phone or e-mail.

8. Protect your intellectual property

Piracy or cheap copies could be a death-blow for your business, especially if you provide unique or high-tech products. Always be sure to protect your intellectual property adequately. The legislation in this respect may differ widely from one country to another. So choose a partner with the appropriate legal expertise to apply for and/or protect your patents and trademarks.

9. How universal is your logo and business or product name?

Remember how the Fiat Uno never got off the ground in Finland in 2006? The manufacturer was puzzled, because the new model was a great success in other countries. Until it turned out that 'uno' is Finnish for 'idiot'.

So be sure to check beforehand that your brand or product name doesn't have any negative connotations in the market where you want to set up. The same applies to your logo: a picture, symbol or even colour may be interpreted very differently by different cultures.

10. Use subsidies and incentives

The different governments in Belgium, and often also in your target market, have introduced many initiatives to encourage international business, from consultancy services to subsidies. You can obtain further information from Chambers of Commerce, embassies, industrial organisations or the following government departments:



Not words, but actions: how can you realise your internationl project?

Gaining a foothold in a foreign country is no easy task, and some good advice alone will not suffice. Trade Development at BNP Paribas Fortis is the perfect partner to turn theory into practice!

Many companies want to try their luck outside our borders and gain a foothold in new markets. This is necessary not only to be able to continue to grow, but also to remain competitive. But if you don't know where to start, it's hard to put your money where your mouth is. How do you find the right market? How do you find prospects? How do you prepare the whole operation in all its aspects? What risks do you need to cover? And which partner can you trust? All important questions that can make or break your project. And this is how international ambitions are sometimes left on ice.... 

"We want to help companies achieve their international ambitions", says Rob van Veen, Head of Trade Development at BNP Paribas Fortis.

"We look at the local market into which the company wants to launch and make sure the underlying potential is sufficient." And so, the first step towards success is taken.


There's a deep gap between theory and practice that managers do not always dare to cross. It's essential to collect a lot of data and information, but this is certainly not enough. Talk must then be followed by action.  Your growth project's first stone must be laid... preferably with the greatest possible chance of success and as few risks as possible. In such an adventure, (good) guidance is not a superfluous luxury. Even more reason to call on the support of Trade Development: a partner who can assist you with a wide range of solutions and help you establish a long-term strategic vision. In Belgium and beyond. 

"In their project's first phase, companies often find a lot of information and support from the Belgian export promotion agencies", says Rob van Veen.  "But they don't get all the practical answers they need to roll out their activities in a given country."


Given that growth prospects in Belgium are rather limited, companies must therefore look for international growth. But where? This is where the Trade Development team comes in. Your choice of target market is certainly crucial. A vague, poorly thought-out decision can have dramatic consequences: examples of failure abound – partly because companies don't understand the local 'culture'. Companies sometimes gravitate towards exotic markets because others have gone before them. But every international project is unique: does the market fit into your overall strategy? Are you aware of all the challenges that lie ahead (regulatory, commercial, etc.)? 

"Let's take the example of a company that wants to set up in Brazil. Our first question is then: what activities have you already been carrying on in Europe? Might there be new, undiscovered opportunities there? For example, it's much easier for a company to set up in Poland than in Brazil, where taxes on imports are extremely high" , continues Rob van Veen.


Your project has taken shape and you've determined your target market. The time has then come for Trade Development to roll out one of its greatest assets: access to a global network of competent and reliable partners.

"We introduce the client to local specialists who can support their project abroad from start to finish. One deals with the roll-out of activities, another specialises in legal and tax issues, and a third takes care of the administrative side of things. We prefer to work with small, local agencies, most of whom are long-term BNPPF network partners", says Rob van Veen.

These contact persons have a perfect knowledge of the national rules and customs and know how to adhere to that specific framework. The company therefore has the great advantage that it can benefit from such a skilled team: a win-win situation. "In addition, our permanent contact persons are evaluated by the client after each project. This way, we can guarantee the quality of our services!" 


Are you looking for an effective distributor or a reliable representative? An ideal on-site supplier? Do you want to determine these contacts' actual potential or get to know possible new partners? Not easy for a company… 

"Most of them are looking for a white knight. Our trade developers draw up realistic selection criteria in consultation with the client. They carry out a financial analysis of the commercial partners and check their technical baggage and their reputation", explains Rob van Veen.

First, a list of four or five serious and interested candidates is drawn up, and then the contact phase follows. "Our local contact introduces the candidates to the Belgian company to ensure that both parties are interested in a partnership. Once all these issues are clarified, the relationships can be rapidly explored in depth." 


Every target market has its problems and risks: from the language to cultural and commercial differences. Very specific problems that are often difficult to solve from Belgium, especially in the post-COVID-19 era. Hence the importance of being surrounded by specialists who know the country like the back of their hand. Need an example? "To be able to supply retailers in the UK, you often need to be able to invoice at a local level", explains Rob van Veen. "Our trade developer can then act and take care of the local invoicing and accounting on the company's behalf at a fixed and transparent rate for each transaction. This is a simple initial structure that does not require major investments but is very interesting professionally." The client can naturally then seek its own local partner. "That too is a task they can leave to our contact person, who has the necessary experience to do so." Need another example? Russia, where everything takes a huge amount of time... Trade Development's network of experts can also speed things up considerably here and solve problems more quickly. 


Ready to try your luck outside our borders with the utmost peace of mind?
Contact us 

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