Visiting Tyco Security Lu Jianwen

HC Network: Tyco Security and Fire Protection is among the largest global manufacturers and marketers of security and fire protection systems. As a global leader in security, you have significant influence in the industry. What are your thoughts on being ranked among the top ten foreign security brands in 2005?

Lu Jianwen: I'm truly honored. Before this ranking was conducted, we had a brand called AD (American Power), which had already entered China earlier. However, we made some adjustments based on the development of the Chinese market. The real presence of Tyco in the Chinese security market began around 2001 and 2002. Having a single brand like Tyco recognized as one of the top ten foreign security brands in China is an honor and a great achievement for us.

HC Network: What did Tyco Security accomplish in 2005 and the first half of this year?

Lu Jianwen: We've been gradually implementing our strategic plan. In 2005, we achieved excellent results. In May, you also attended our press conference with a new business partner. We're establishing a new joint venture to bring China’s leading CMS to the international market. We have a wide range of security and fire protection products, along with engineering services. Our experience from both domestic and international projects will be applied to the Chinese market, which is fast-growing and highly valuable. Therefore, Tyco continues to develop the Chinese market according to its own plans, aiming to offer more advanced products, integrated solutions, and better alarm services to local customers.

HC Network: Tyco is a globally renowned brand. Could you share what unique security products you've introduced in the Chinese market over the past two years?

Lu Jianwen: Compared to major domestic brands, Tyco offers a more diverse product line. We have comprehensive security solutions, including CCTV monitoring, access control, and anti-theft alarm systems. Last year, we launched the first multi-protocol, multi-format reader in the world, integrating various card technologies into one device. This allows compatibility with different smart cards and proximity cards. These technologies are all consolidated into one reader. We continue to push forward with digital security network products. This year, we will introduce a networked video surveillance archive management system and a network policy management system. As security systems grow, managing access rights becomes increasingly important. To ensure network security, we have developed these products.

HC Network: The network management system allows users to set different levels of authorization, enabling them to view specific videos and control front-end cameras.

Lu Jianwen: Exactly. For a single or a few DVR systems, the authorization model is simple. But for large networks across multiple locations, the requirements for access rights are very high. Ensuring that these rights are properly managed requires effective methods. We are currently focusing on this area and developing advanced products. In addition to our products, we also provide engineering services and solution-based businesses.

HC Network: Tyco covers all aspects of security, but now you’re focusing more on applying advanced technologies to provide overall solutions. How does the company see this shift?

Lu Jianwen: It's driven by customer needs. Today, customers don’t care much about individual product specifications. They need complete, integrated solutions. With the homogenization of monitoring systems, the real difference lies in the solution itself.

HC Network: How does Tyco approach marketing, including direct sales and local agents? Does Tyco have a national agency?

Lu Jianwen: Currently, we focus more on improving product service quality and providing tailored solutions. We engage directly with end users and work closely with engineering companies and system integrators, moving away from a purely agent-based sales model. We use a multi-channel approach. So far, we haven't established a national agency.

HC Network: Does Tyco have any plans for local R&D and production in China?

Lu Jianwen: Yes, we’ve always considered it. We currently operate factories in Shenyang and Shanghai. We are also considering setting up an R&D center in China, though no specific timeline has been confirmed yet.

HC Network: Localized operations are essential for foreign companies entering the Chinese market. They help understand the unique needs of the market. Directly importing foreign equipment can lead to compatibility issues and higher costs. Localization is definitely a trend.

Lu Jianwen: Definitely, and Tyco will follow the development needs of the domestic market accordingly.

HC Network: Your department is called Tyco Security and Fire. What is the ratio between these two sectors in terms of marketing?

Lu Jianwen: These two areas are closely related. In our division, we combine fire protection and security under one group. In foreign markets, the distinction between security and fire protection isn't as clear as in China. Domestically, they are treated as separate entities. Currently, the marketing ratio is roughly split evenly between the two.

HC Network: Are security services part of your responsibilities too?

Lu Jianwen: Yes, we handle that as well.

HC Network: I recently learned about the development of the security service industry. Many believe that policy and environment are key factors in promoting security services in China. For example, alarms are usually handled by the police, not security companies. There are also regulations requiring reporting to public security when an alarm occurs. This affects the growth of security services.

Lu Jianwen: You're right. The main reason for the slow development of alarm services in China is due to policy restrictions and low customer demand. However, under WTO agreements, China committed to opening up the security services market by the end of 2006. The role of the public security department is expected to change. Some policy adjustments are still being implemented. Despite this, the potential demand for alarm services remains huge. The financial sector is currently the most active user. As the economy grows, residential areas, industrial enterprises, schools, warehouses, and retail shops will also increasingly rely on professional security services to ensure safety at all times. I believe the demand for such services will continue to rise.

HC Network: How is the cooperation with the new Vision Company in Shanghai for security services going?

Lu Jianwen: The cooperation is progressing smoothly. We are currently preparing according to the state's requirements.

HC Network: Is Shanghai the first city for your security service collaboration?

Lu Jianwen: Yes, it's our first project in the country.

HC Network: Tyco has an electronic article surveillance system, which is quite distinctive. Could you explain this technology?

Lu Jianwen: The electronic article surveillance (EAS) system is primarily used in the retail and library industries. It helps prevent theft and loss of goods. Tyco leads this market, holding over 60% of the global market share. The top 100 retailers, including Wal-Mart and Hualian, use our system.

HC Network: This system seems to have a large market. What is the difference between EAS and RFID technology?

Lu Jianwen: The main difference is that RFID uses chips to store information, while our EAS system uses acoustic magnetic anti-theft technology. The tags are attached to items and generate a detection signal. Unlike RFID tags, EAS tags do not store information. Additionally, their working frequencies and mechanisms differ. Each item is tagged, and when passed through the checkout, the tag is demagnetized and won’t trigger an alarm at the exit.

HC Network: Thank you for sharing the details about Tyco Security today. It was a pleasure speaking with you.