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Gaining Competitive Advantage through Local Production and Operational Excellence
1. Member on Stage:
Gaining Competitive Advantage through Local
Production and Operational Excellence
Arie Schreier - PTL Group
More than Management ™
2. www.PTL-Group.com
Who is PTL Group?
Over
penetration
Projects
(Currently 30
ongoing)
Established since
Year 2000
Warehouses &
office :
Beijing
Shanghai
Guangzhou
Employees
Factory
incubation in
Changzhou
Sales Offices in:
Italy
The Netherlands
Israel
3. www.PTL-Group.com
Executing of:
•Factory set up projects
•Incubation of factories
activity
Industrial project
management
Management of:
•Import
•Warehousing
•RMB contracts &
Invoicing
•VAT refunds
•Loans and promissory
notes
•Collection and transfer
of funds overseas
Management of
trading &Logistics
Performing of:
•Operational audits
•Work processes
improvement
•Interim Management
•External controller an
auditor
•Full scale Turnaround
Business recovery
& Turnaround
PTL activity in China
4. www.PTL-Group.com
Trends in the China 1
For the Chinese government:
Made in China Created in China Designed and innovated in China
Made in China Sold in China Made AND sold in China
For the foreign companies:
5. www.PTL-Group.com
Trends in the China 2
12th 5 year plan: 2011-2015:
• 2 trillion RMB for Science & Technology (priority on Biotech)
• 12 Billion RMB for new drug development
• 1 Million jobs in Biotech by 2015
• 8% of 2015 GDP : Biotech, new energy, emerging industries, new generation IT
• By 2015 2.2 % of GDP spent on research and development (USA = 2.7%)
For many European companies who never dreamt of going to
China, China becomes their only hope.
For many European companies who never dreamt of going to
China, China becomes their only hope.
Fierce competition to overseas companies by the locals in
every field but still lots of opportunities
6. www.PTL-Group.com
The “Go-West” & “Go-Inland” Strategies
China's provinces:
Real GDP growth % yoy 2010
China's provinces:
GDP per capita RMB, 2010
Source: Deutsche Bank Research
7. www.PTL-Group.com
Financial crises!
• Buying power is reduced
• Traditional supply chains are fragile or broken
• Fierce competition by overseas companies (Chinese mainly)
• Companies may have to follow their international clients to China
At the same in Europe and the USA…
For many European companies who never dreamt of going to
China, China becomes their only hope.
9. www.PTL-Group.com
• Increased cost of labor
• Government prefers innovation, green and high-tech
• Local competition is getting better and stronger
• Markets are spread all over China
• Licenses and regulation
What is waiting for the new comers….
But: the market in China is still thirsty for good, high quality
and innovative products
10. www.PTL-Group.com
Conduct your business in China like Chinese
• Sell in local currency
• Use local staff to do the work for you but under close
supervision
• Set up logistics and technical support
• Set up manufacturing/assembly plant to support your sales
IN CHINA
11. www.PTL-Group.com
Assembly and manufacturing in China to support local sales
• Applying for government tenders (made in China requirement)
• Overcoming import restrictions (SFDA)
• Improving value proposition to local clients
• Penetrating new segments in the market
• Reducing cost structure, improving sourcing, improving QC
• Logistics center for Asia
If you can’t do it by yourself - outsource
12. www.PTL-Group.com
China Industrial Incubator Initiative (CI3)
• Located in Jiangsu Wujin Economical Zone, Changzhou
• Owned and operated by PTL Group
• 13,000 sq m of workshop and office space
14. www.PTL-Group.com
• Using existing infrastructure
• Fast set up of Manufacturing capabilities
• Offering engineering and managerial added values
• Transparency
• IP control
• Modular growth strategy
• Product localization
Advantages of the incubator business model
16. www.PTL-Group.com
Taking Advantage of Chinese Gov’ funds
• Make local Government fight for your project
• Identify local funds through local contacts
• Find your investment leverage
• Make high level officials commit to your project
• Use the local banks to finance your activity
18. www.PTL-Group.com
Summary
• Challenges of competing in China are greater than ever
• Opportunities in the Chinese market are greater than ever
• To compete in China, a full scale operation system is needed
• If you can’t set it up by yourself – outsource
• Incubator is the current trend for a quick set up of decent
operation