Niche Market: An Interview With Hans Vriens


Since setting up Vriens & Partners six years ago, Hans Vriens has added six offices and 50 staff to his operation. But, Craig Hoy discovers, he has no plans to extend its reach beyond its niche: government affairs in South East Asia


Following the economic rout of 2008, Hans Vriens bet on Asia’s emerging markets when he put his name above the door of Vriens & Partners, his Singapore-headquartered government affairs firm. A well-known figure in the industry in Asia Pacific, Vriens has had a varied past: a corporate strategist turned lawyer, turned journalist, turned PA practitioner. He headed up APCO Worldwide, first in Indonesia, then out of Singapore for Southeast Asia before setting out on his own path.

Less than seven years in, Vriens is far from a sole trader with seven offices across the region and a full-time staff now topping 50. “We set out to cover Southeast Asia. We are on track but there is a lot for us still to do in this highly diverse region with 600 million people. Government affairs is a local business. All politics is local. This means we need to have a strong in-country team to be able to answer the questions from the regional CEO and the regional head of GR. We want to stay focused on what we do, which is only government affairs, public policy and political risk – nothing else.”

To this end, Vriens is content not to pursue work that would bring his firm into the intensively competitive mainstream of communications consulting. “We don’t come across the big PR firms. Southeast Asia is a difficult region to cover. You cannot do it by just sitting in Singapore. You need outstanding teams all around the region.”

Tight focus

And the focus of the firm will remain tightly set on what it does best, he says. “When I sit down with the CEO of a multinational in Singapore: “He asks,‘what kind of government policies around the region can negatively impact my business?’”

Given the differences in the markets his business covers, Vriens is certain that a firm of the kind he is building cannot just have a big team in Singapore. “Singapore is not Brussels or DC. It doesn’t issue directives that have to be implemented around the region. So for us it’s about decentralizing. We are not a franchise operation. We are a one-firm firm.

The paradox is that you need to have strong centralized client management and a highly decentralized organization. Our Vietnam and Myanmar offices are the same size as our Singapore office. I expect Indonesia will soon be our biggest operation. My role is not to tell Phuong, our MD in Vietnam, how to work with government and the party. She knows that like no one else does.”

vrienshead2From his vantage point, Vriens goes to great lengths to dismiss the notion of there will ever be a single fit solution in Southeast Asia, despite the emergence of regional bodies such as the Asean Economic Community – which he calls “highly aspirational”. “You cannot generalize in this market. Is it getting tougher for business? That depends on what country, and what sector you are in. For example,Indonesia is becoming more inward-looking and nationalistic.

“In 1998 during the Asia financial crisis, local banks and telcos were sold to foreign companies. But now local companies are cash rich and they want to control things – they want the banking sector back. But in Myanmar, Singapore, Thailand, things are different and we have seen the opposite trend. In these countries, major investments by our clients are seen as a validation ofgovernment policies.”

International focus

Vriens is staying focused on major international companies, with a portfolio including global operators from Europe, the US, Japan and Brazil across sectors ranging from telecommunications to toys. “They are often up against strong vested interests,” he says. “And increasingly, regional companies are finding this too when they leave their home markets. When a company from the Philippines goes regional, they discover they don’t have the government connections they used to have back home.”

Vriens notes that regional and international trade can be hampered by local operators that operate in tandem with governments to use legislation and the political system “to work against international companies.” “Many governments will often favour local companies over international firms, and this is in part because local companies tend to be better at speaking to their own government. This puts international companies at a disadvantage, because they would often rather focus on business than talk with a government that they don’t necessarily fully understand. However, this is no longer possible. You have to talk to those responsible for public policy and it is better to talk with them before they regulate you rather than after they have done so.”

Tactically, Vriens plays down the notion that Western approaches to lobbying simply do not fit in an Asian context. “If you know the local government and parliaments, you can be very effective in every country. Indonesia is often the most challenging but so is working with the military government in Thailand. But it really comes down to understanding the policy-making process.”

Vriens believes international companies increasingly understand the need for coherent and continued dialogue with policy makers. “Over the last six years, we have seen many more firms move their policy people to Asia. But often it is only one person in Singapore and that person tries to cover 25 countries around Asia Pacific. The result is that they spend most of their time on planes or in internal meetings. But at least we have somebody in the company who is focused on public policy who we can work with on a daily basis.”

Pace of change

Vriens attributes his firm’s success to a combination of the growing awareness of the need for government engagement and the pace of change in Asia. As one of the first firms to enter Myanmar as sanctions were being lifted, he is not afraid to invest while others stand by to watch which way the wind blows. “Political change can be good for business. Political instability is not. It might mean more work for us, but it is not good for the big direct investors who are looking for long-term security. There is a big difference between the change we saw in Myanmar when sanctions were lifted and the situation we see in Thailand or Malaysia at the moment. In every country in the region at the moment there is a lot of change, and not all of it for the better. In many ways Myanmar has been the best government for us to work with in the last three years.

In the face of market turbulence and occasional upheavals and coups, Vriens points out that his clients “take a long term view” on Southeast Asia. “They invest and build factories for the long term. So they are more concerned about the underlying issues and the longer term trends, which is why, for example, they still want to invest in countries like Indonesia. Our clients are more concerned about the security and stability of their investments than they are about the government of the day. But of course life is easier if the government of the day implements balanced policies.”

Vriens is based in Singapore, a country which he says “fully understands the need for foreign investment and has been eminently successful in attracting it since its foundation in 1965.” But he travels every week to keep engaged with clients and policy makers around the region, although he is at pains, after a three month spell away from the office, to ensure that the company that bears his name can run independently. “We are extremely busy all around the region. More and more sectors are being regulated. And regulation is not always friendly towards international players,” he warns. “We are seeing regulation in industries like food and the tech sector catching up with sectors that are traditionally heavily regulated like pharma,” says Vriens, who counts the Asian Internet Coalition among his clients.

Regulation rising

This, he believes, becomes a careful balancing act. “Let there be no misunderstanding about what we do. In the end, governments will regulate sectors such as technology. All we can do is help the government to understand how we think this could best be done. But it’s their decision and we always have to take into account what measures are in the interests of the country. We always try to align the interests of the country with those of our clients. That is the secret of the game.”

Looking to what’s next, and with the eye on his own long-term plans, Vriens wants to secure more of the same, rather than expanding out into new practice areas or territories. “We have seven offices and a rep office in DC. We are focused on Southeast Asia and we will not expand outside Southeast Asia and Hong Kong. We have a good combination of outstanding local employees with detailed knowledge and talented foreigners who understand the country they are based in. We are 50 people now and will be 60 by the end of the year. In addition, we have 25 former senior government officials as senior advisors. Our senior directors are shareholders in the firm. We have a culture that is driven by more than just numbers. It is one firm.”

“It may sound counter-intuitive. But it is better to turn business away and focus on what you are good at. We want to stay motivated. We want our staff to be motivated by work that they find interesting. We are a niche player and we are very happy to play in this niche market.”


 

Hans Vriens was talking to Craig Hoy, Executive Director of PublicAffairsAsia. Additional reporting and editing by Mark O’Brien. This interview appears in the latest edition of PublicAffairsAsia magazine