Creating Profit Through Alliances - business models for collaboration E-book | Page 74

Chuchawal Royal Haskoning
The Thai-Dutch joint venture Chuchawal Royal
Haskoning was set up in the late sixties by the
engineering company De Weger to supervise the
design and construction of the new Bank of Thailand
headquarters. To gain access to local knowledge, a
US-educated Thai architect by the name of Chuchawal
Pringpuangkeo was hired as an advisor. In 1974 the
ongoing collaboration was formalised in a joint
venture named Chuchawal-De Weger, and after De
Weger was incorporated by Royal Haskoning in 1998,
the alliance changed name.
From the start the joint venture has been managed
operationally by a representative of Royal Haskoning.
Currently this is Alko Plas, who sits on a board of
directors with two representatives of Chuchawal and
a division director of Royal Haskoning. This board
reports to the shareholders meeting, attended by
Chuchawal Pringpuangkeo and a board member of
Royal Haskoning.
Alko explains the strategy of Royal Haskoning: “We
always start from the customer's request, and then
see what kind of expertise is required to arrive at a
solution. This need not always be technical expertise:
we recently won an assignment for the renovation of
seven bridges thanks to the fact that we also took
into account the communication with the
municipalities involved.
To obtain all the necessary expertise we frequently
collaborate with various partners. That can be either
one-off or for longer periods. With Nedeco, a
combination of Dutch engineering agencies, we have
been active in Thailand for more than 20 years and
have, among other things, developed a large port
complex. More recently we acquired an order for the

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design of a tunnel plan between Hong Kong and
Macau, together with engineering consultant
Witteveen+Bos.”
The collaboration is sometimes formalised as a new
legal entity, and in other cases bids are made as a
consortium on separate purchase orders. Chuchawal
Royal Haskoning is a Thai legal entity that was active
in other Southeast Asian countries, but these
activities were sold to Royal Haskoning in 2002.
Financial settlements are easy and transparent: only
the salary costs for some expats and a management
fee are invoiced by Royal Haskoning to the joint
venture. Dividends are paid out yearly. Usually the
costs of local representation are split by the various
divisions of Royal Haskoning that profit from such an
entity, with the country manager reporting to
multiple divisions. Since the alliance partner has a
direct line to the board of directors, the joint venture
only reports to one division to simplify internal
communications.
Alko Plas: “For Royal Haskoning this is the only
country in the world where we have such a
continuous joint venture with a local partner. Due to
Thai legislation, it is the only way to have a
permanent entity here. Of course you have to adapt
to your partner and to jointly determine your strategy
and operational approach.. We make our investment
decisions together and hold budget rounds. What I
see is that the Thai partner is more entrepreneurial
than Royal Haskoning, which is more cautious in
bidding for projects . At the same time the joint
venture gains from the long term contributions of
Royal Haskoning in items such as a code of conduct
and knowledge around sustainability.”