|
When the value of goods purchased is large
enough, setting up a dedicated factory in China may be a
consideration. It is the preferred option when issues of
quality, design security and brand control are paramount.
However, the effort required to build and manage a factory from
the ground up can be intimidating, especially for those
businesses which are new to China. For companies that want
greater control over the production process, but prefer to avoid
the headaches associated with “going it alone” in China,
PassageMaker offers two forms of cooperation:
-
Virtual Joint Venture in China:
Existing PassageMaker floor space, staff and equipment are
dedicated solely to the production of the client’s given
product. In this fashion, the client can leverage the
existing PassageMaker business umbrella (space, staff,
management, logistics, accounting). Compensation to
PassageMaker depends on the scope of the factory formation
project, but can take the form of a fixed monthly retainer
and/or percentage of production value.
-
Joint Venture in China: In cases where the production space and
staffing requirements are substantial, the client and
PassageMaker may form a Joint Venture at a new facility. In simple
terms, under a pre-agreed compensation structure
The client provides:
• The start up capital and production
training (if outside of PassageMaker’s core
competencies)
• Technical Support (if production methods are outside
of PassageMaker's core competencies)
• Equipment/Material requirements
• A commitment to purchase a given # of units in a year
PassageMaker provides the following:
• Initial Feasibility Study
• Facility Identification & Analysis
• Ad Placements, Interviews and Hiring of Local
Staff
• Equipment Procurement
• Construction/ Decoration Coordination
• Local Government Liaison
• Registration/ Tax Planning (working closely
with local law firms to ensure legal entity is
structured in an efficient manner)
• General Management of Daily Operations
Our Factory Formation experience includes Hardware
(primarily metal stamping), Medical Devices, Auto
Components (molded rubber) and Custom Moldings (injected
plastics).
Security Concerns
General Management, Accounting, Logistics,
Government Relations are directly handled by PassageMaker staff
to ensure professionalism, accountability, transparency and
security.
In cases where certain components to be
assembled at the factory are sensitive in terms of supplier
confidentiality, design control, pricing data and other Intellectual Property Rights (IPR)
issues, Purchasing Engineers located at PassageMaker rather than
the Joint Venture can assist with “Sourcing Feasibility Studies ” as well as on-going
“Vendor Coordination”.
Additionally, PassageMaker’s existing
tool
and die shop,
assembly/inspection center,
metal
fabrication and
plastic
injection lines may be utilized.
Conclusion
Many investors with Joint Venture’s in China, especially
those with “local partners” complain of a lack of control/
transparency in their China operations. Our Joint Venture model was created
with these concerns in mind and we welcome you to visit our
profitable & well run operations in China. We also recommend you
talk with the clients whom have Joint Venture’s in China with us.
References Available Upon Request
|
