China/India trade mission

7/30/2019 China/India trade mission

1/5

MUNICIPALITY OF CHATHAM-KENT

CHIEF ADMINISTRATIVE OFFICE

ECONOMIC DEVELOPMENT SERVICES

INFORMATION REPORT

TO: Mayor and Members of Council

FROM: Michael Burton, Director, Economic Development Services

DATE: August 19, 2013

SUBJECT: India/China Trade Missions

This report is for the information of Council.

BACKGROUND

Foreign Direct Investment (FDI) is a critical element in the marketing mix for attractinginvestment to Chatham-Kent. Chatham-Kent Economic Development Services isfocusing on three main geographic priority areas in FDI. These include Europe, Indiaand China. Chatham-Kent has been developing relationships in the China market forapproximately 18 months with considerable success. In the past eight weeks, theMunicipality has hosted six delegations from China; two universities and four privatecompanies. Files in North America generally take two years plus to close. With the need

to develop personal relationships, the language challenges and the distance in Asiancountries, the process abroad can be twice as long.

As indicated in prior reports, in India and China, relationships are a critical factor inbusiness matters. Prior company relationships drive investment decisions beforebusiness factors. If the relationship does not exist, the business discussion will notcommence.

The role of the Office of the Mayor is a critical factor in FDI in Asia for gaining accessto top level CEOs in both China and India. The Mayors position is held in very highesteem in both countries. That is why many mayors coordinate trips with their economic

development staff.

Many jurisdictions recognize the value of FDI outside North America in their economicdevelopment efforts. The reason for that focus is quite apparent when reviewing thedevelopments with major US corporations. Ford Motor Co., GM, Navistar, Caterpillar,Raytheon and many more, present examples where US companies are focusing solelyon consolidation and retraction. Some US companies looking at repatriating off-shoreoperations to North America, focus on the political points by repatriating operations tothe US, not Canada.


2/5

2India/China Trade Missions

Asian companies have the opposite mindset. Most are privately-owned and haveeconomies that are experiencing 7-10% growth rates. They have typically not expandedabroad but now are developing strategies to spread inherent business risk to marketsoutside of their own home countries. These companies are generally multi-billion dollarcompanies where decisions are made with a long-term return on investment (ROI)focus, not with a short-term next quarter to satisfy impatient shareholders. This is the

target group the Municipality is beginning to influence. The process is slow and thebusiness opportunity has to be compelling, but with continued effort, the Municipalityshould be on their radar when the timing is right.

COMMENTS

India

The purpose of the mission to India was to introduce Chatham-Kent to a number ofmajor companies in the energy, agriculture and manufacturing sectors. TheMunicipality also met with the top Canadian trade official in New Delhi. An additional

objective was to develop export opportunities for Chatham-Kent based companies.Chatham-Kent representatives also visited with a number of companies to furtherprevious discussions that have taken place about specific investment opportunities. Oneof these companies has visited Chatham-Kent while another group, met with Chatham-Kent officials in Toronto.

China

In China, the objective was to meet officials at the provincial and city levels, criticalinfluencers in offshore investments. As well, further discussions with two universitiesthat indicated on previous missions, an interest in exploring an international research &

development centre and possible campus in Chatham-Kent, were visited.

This trip allowed the Mayor and the Director of Economic Development Services, tointroduce Chatham-Kent to a number of government officials, key influencers andcompanies.

Detailed discussions on a number of potential investment decisions were held withcompanies. In some cases, these were follow-up discussions, in other cases, newprospects for Chatham-Kent. Intensive meetings were held in China with two companieslooking at major investments in Chatham-Kent.

In order to keep critical information confidential, this report will not identify the names ofcities nor the companies visited, Chatham-Kent has engaged one agent in India and twoagents in China well connected with investor companies that pre-qualify all meetingsprior to Chatham-Kents staffs departure. All three agents have been successful indeveloping connections with major firms and governments to open doors for Chatham-Kent.


3/5


OUTCOMES:

India

1. In India, contacts and meetings were held with the Chief Executive Officer or

Board Chair of the organization. Chatham-Kent held meetings with seven major

global corporations in India and also introduced Chatham-Kent to the Canadian

High Commissioner staff in New Delhi.

2. Promoted the potential for Research and Development Centres to be based in

Chatham-Kent.

3. Identified a major $60 million dollar contract in India that is open for bid by a

Chatham-Kent company. The company concerned is currently preparing a multi-

million dollar bid submission. If successful, the business will represent a major

business and employment expansion opportunity in Chatham-Kent. As a follow-up, the Company representatives are in Bangalore August 22-25, 2013 and

meeting with the Indian local partner to further the business discussions.

4. Established a distribution arrangement in India for a local Chatham-Kent

manufacturer.

5. Explored with a leading Indian wind turbine manufacturer, the potential to

consider relocating manufacturing operations to Chatham-Kent.

6. Local investor signed an agreement to joint venture with IL&FS, a globalinfrastructure company and are now seeking Canadian institutional support to

launch the business.

7. Held detailed discussions on the potential acquisition and relocation of a western

manufacturer of heavy industrial vehicles and axles to Chatham-Kent.

China

1. In China, met with eight corporations and a senior agricultural official in the PRC

Federal Government in Beijing. Meetings focused upon the University of Guelph,Ridgetown Campus International Agricultural Research and Development

Institute initiative and specific new company investment proposals for Chatham-

Kent. Two reciprocating visits with two corporations were also held.

2. Coordinated joint-venture discussions with a local Chatham-Kent manufacturer

which is seeking a joint-venture partner to expand market potential with

increased employment potential in Chatham-Kent.


4/5


3. Continued extensive meetings with two private corporations on two multi-million

dollar investments which would create 400 new area jobs.

CONSULTATION

The Chief Administrative Officer was consulted prior to committing to these investment

attraction missions.

FINANCIAL IMPLICATIONS

India/China

Activity Amount

Travel Costs $ 7,772.78Accommodations (12 nights includingconsultant)

$ 4,668.90

Meals/Entertainment/Other $ 348.45

Consultants $20,458.70

Other including translation,gifts/presentation materials

$ 5,139.18

Total $38,388.01

Federal Contribution ($10,028.06)

Net Municipality Cost $28,359.95

China

Activity Amount

Travel Costs $ 6,730.03

Accommodations (8 nights) $ 755.25

Meals/Entertainment/Other $ 0.00

Consultants $ 0.00

Other including translation,gifts/presentation materials

$ 1,743.18

Total $ 9,228.46

Federal Contribution ($ 714.08)

Net Municipality Cost $ 8,514.38

The net amount of the mission trips were covered out of the Economic DevelopmentServices base budget.


5/5


Prepared by: Reviewed by:

____________________________ __________________________Michael Burton, Director Don Shropshire

Economic Development Services Chief Administrative OfficerAttachments none

P:\RTC\ECODEV\2013\Sept 9 India China Trade Missions.docx

China/India trade mission

Documents

Transcript of China/India trade mission