At the Hanover computer fair this year, CeBIT '90, a special press conference was held to announce the formation of a joint venture between a Taiwan computer company, Aquarius Systems Inc., and the largest office machine manufacturing company in East Germany, Robotron, Buromaschinenwerk.

Aquarius is not as well known in Taiwan as Acer and Mitac, so people may wonder how it managed to get a jump into the East German market ahead of companies that are both larger and have a longer history in Europe. To find out, we went to Dusseldorf and interviewed the man who brought it all off--Winfried Hoffmann, managing director of Aquarius in Germany.

Q: There are a lot of Taiwan computer companies in West Europe, so why did Robotron decide to joint venture with ASI? And why does ASI want to cooperate with Robotron?

A: Of course, there are many Taiwanese companies in Europe, but remember, the East Germans were totally independent from other sources in the past. Robotron, for example, is a totally autonomous PC factory. They produce everything themselves. It was their objective in East Germany not to be dependent on outside facilities. It was not just a question of money.

Now I did a lot of business with Robotron in the past, buying printers. Robotron is one of the biggest printer suppliers in Europe; they produce about 500,000 units a year. I did a lot of business with Robotron when I was working for Commodore, so I know their management. I knew that they were looking for the marketing, they wanted to grow, but to grow they needed new ideas in marketing and distribution.

So the combination of ASI Taiwan and ASI Europe was very good for them. My company is well known as a very strong marketing company. We sold more than 4 million computers in the last four years with Commodore, and they know that it is not just the product that makes business, it is also the people. They know the capabilities of my organization, and they know that if I chose a Taiwanese company like Aquarius it must be a good choice.

Q: Please tell me about the future plans of the new company.

A: Of course, we have certain steps. Step number one is that we qualify all Taiwanese computers here in Germany. That means that when the product arrives, we take it out and insert the hard disk and the software. And that way we have a chance to make a finer quality. Not that the quality is poor, but it gives us a chance to qualify it here in Germany. So our dealers are getting finished, finalized, and tested products. We say produced in Taiwan, and qualified in West Germany.

Step number two is the production and assembly of ATs, followed by 386s and even higher. We're also trying to build components, such as power supplies, cabinets, and keyboards, because looking forward to 1992, you have to have local contents, to source locally and to put more labor into Europe. A strong company has to be present and to be established. There are a lot of companies that came here one or two years, and then left.

This company has a large capacity for development. It has a huge R&D department, and we shouldn't forget that the future is still coming for computers. So we can use this intelligence, merged with our experience in Taiwan, plus the facilities and the people, and I think we are capable of growing very fast.

Q: What about Robotron's level of technology?

A: Robotron is building mainframes, minis and PCs. The level of technology is limited in their sources, in hardware, but not brainware. They can't get some of the nice new components, so they make their own. If they make an XT, it's maybe 10 kilos in weight, because the components they use look like something from an old radio. Technology of Robotron, the people technology, the brainware, is superb. They have the same type of educational system as West Germany has. My partner Paul Liu was astonished, because for a lot of Taiwanese people the East Bloc is a black spot on the map. The people there work on the same standards that we worked on 40 years ago, and they keep going. Giving them the technology, giving them the latest standards, I bet we can jump to the head of the industry together.

In fact, Wernher von Braun worked in this factory, and the V1 and the V2 that were used at the end of Second World War were developed there. The first punch card machines were developed there, and the Americans took the patent, and some people say that the beginning of IBM's punching machines came from Thuringia, where this company is. So there was leading technology there in the past.

We're trying to produce a whole range of PCs as soon as possible, ATs, 386s and more. It depends on whether East Germany can join the European common market. We think there is no limitation.

Q: What kind of incentives will ASI get from the German government for investing in East Germany?

A: They're very good. West Germany has a very big investment program. It's six billion Deutsche Marks, or US$3.6 billion, for joint ventures. So if we apply, we can get very cheap credit, 6.25 percent per annum for five years.

Up to now 1200 companies have applied for money, but they've spent only DM100 million, so there is a lot of money left. And I think that even if the six billion is spent, they'll put some more behind it, because one thing is very important: There is no mid-sized private business in the East Bloc, and the carrier of success is mid-sized, private companies. You know that from Taiwan. It was not the huge organizations that brought the country up. It was the small people, the managers who work fifteen hours a day, putting their own money behind it, their own risk. Without that kind of business a country dies. It's a big mistake of the socialist system, and they have to change that.

I think the support of the German government is nice, and I know that Taiwan is also putting a nice program in place, with certain conditions. And since we have a partnership, Aquarius Taiwan and Aquarius Germany, we want to use both as much as possible, because we need the money. It's a big investment. It's an investment of up to 10 million dollars to make this whole thing really happen.

Q: How good are Taiwanese computer companies? How did you start to cooperate with them?

A: I'm very happy to find Aquarius. First I must tell you that these people were so responsive, so fast--listening and doing. I have to make a big compliment. I don't know if that is unique in Taiwan, but I have no complaints with my partner, nothing at all. I worked more than ten years for Americans. They talk a lot, they promise a lot, but they don't do it. I have a lot of respect for my partners in Taiwan.

I have a very nice team of top people, and they have a nice factory. Aquarius wasn't so big, and smaller, mid-sized companies are always better to deal with. I can play an important role for Aquarius, because for Aquarius we're another window to the market. We've proven that we are doing big business and that we are growing very fast. So our cooperation is very good for both of us. He takes less, I take less, and together we are very price competitive. But quality counts, too.

I must say the cooperation up to now has been more than successful. The only bad thing is, my people here never worked so hard, because success is flying over us.

Q: Have you heard that Taiwanese companies want to set up a computer park in Europe?

A: I don't think that's necessary. I think the individual way of finding local solutions and merging with local standards is easier. Creating a little Taiwan in Europe is not good. You should go to the local people, you should merge. If you say two or three companies in one place, fine, but if they put in 50 or 100 companies, I think they'll have a small Taiwan, and they won't get the local touch. Taiwanese companies need the local touch, in communication, information, sales, financing, legal matters. I don't think that's the only way to go. In principle, 1992 brings the common market together, but in fact, it's already together. It won't change very much. Anti-dumping may apply if somebody is really far below certain possibilities. We may come up with a few more regulations, but it won't change much. We'll still be able to bring in computers or high-tech products. It's not like they're closing the border. But it's good to be here, because in case something happens, you're in.

You won't sell more, though, because we don't need more computers in 1993. Maybe in the East Bloc. And we still have our cultures, our languages and heritages and everything. There are a lot of things. We need local documentation, local customization, for various countries. It's a job that has to be done. A lot of American companies think that in 1992 it'll be like the United States of America, but that's different. They have one language, they have one electricity system more or less, and the standards are there. That is not happening in 1992.

Q: So you think that Taiwanese companies don't have to worry about the EC?

A: No, not too much. Because you're not a dumping country. Taiwan has a perfect business relationship with West Germany. The balance sheet is US$5 billion, and it's equal. That's a good sign.

And Taiwan is not really a big producing country anymore. You're already in a high-technology phase, and you'll always come up with new technologies. Let's look at the graphics market. The future of the computer lies in graphics, and those things can be developed in small quantities at a high price and produced in Taiwan.

Europe is the biggest market in the world. There are 350 million in the West and about 300 million in the East. It's a 600-million person market. Less than one percent of the population in the East has computers, so there's a big demand, and that's very good for all of us. But the Taiwanese have to explain quality and price, because the Koreans aren't sleeping. I think there's still a big difference in quality and price between Korea and Taiwan, but Taiwan has to learn to sell. Going OEM is not the best way.

[Picture Caption]

Aquarius Systems Inc. is currently the only manufacturer in Taiwan to be engaged in joint-venture production in East Germany. Their cooperative relationship was brought off by Winfried Hoffmann (delivering a speech), international managing director of Aquarius in Germany.

Hoffmann has done business for many years in Eastern Europe. Sitting on his right is a Hungarian agent for a computer consulting firm.

The demand for consumer electronic products in Eastern Europe is intense.

A diesel railway vehicle company in Hungary with foreign backing has begun using large numbers of computers. More and more companies will have a similar demand for computers in the future.

Hoffmann has done business for many years in Eastern Europe. Sitting on his right is a Hungarian agent for a computer consulting firm.

The demand for consumer electronic products in Eastern Europe is intense.

A diesel railway vehicle company in Hungary with foreign backing has begun using large numbers of computers. More and more companies will have a similar demand for computers in the future.