“Succeeding in China: Insights from a World Class Irish Company” Dave Murphy
-
Upload
asia-matters -
Category
Business
-
view
112 -
download
2
Transcript of “Succeeding in China: Insights from a World Class Irish Company” Dave Murphy
13 July 2015City Hall, Cork
Succeeding in China: Insights froma World Class Irish Company
Dave MurphyChief Executive Officer, PM Group
The project delivery specialists
PM GroupSetting Up a Business in China
focus.The project delivery specialists
Key facts…
3
Worldwide Office Network
4
International Office Network
BelgiumChinaCzech Republic IndiaIreland
PolandRussiaSaudi ArabiaSingaporeSlovakia
TurkeyUnited KingdomUnited States
The project delivery specialists
PM GroupChina Overview
The project delivery specialists
A Full Services Company
Program & Project Management
Concept & Basic Design
DetailDesign
Permitting
Procure & Contract
C & Q and Handover
Construction Management
Outsource Technical Services
“Life Cycle” Approach
China Clients Include…
China: Office Details
PM Group Unit 1505, Block ASOHO Zhongshan Plaza No.1055 West Zhongshan Rd. Shanghai 200051, China
上海中山西路 1055号SOHO中山广场 A座 1505室
Country General ManagerNiall O’Loughlin
Country Trends
• Population is increasing at a slow rate. Large cities now have a negative growth rate
• Life expectancy is getting higher and population is getting older
• Government still maintain a firm authority on industry growth
• GDP growth is slowing and becoming more stable
• Laws are changing to encourage more manufacturing within China
• Intellectual Property laws are getting stricter
• Universities in China are growing in world rankings, more and more educated workforce in China
• Democracy pressures from Hong Kong and Taiwan
• Government crackdown on corruption has slowed down the construction industry
9
Year Population (M)
Population Growth %
% GDP Growth
% Inflation Rate
2010 1340.9 0.5 10.4 3.3
2011 1347.4 0.5 9.3 5.4
2012 1353.9 0.5 7.7 2.7
2013 1360.3 0.5 7.7 2.6
2015f 1401.5 0.5 6.7 1.5
2016f 1408.5 0.5 6.9 N/A
The project delivery specialists
PM GroupExpansion into China
growth.The project delivery specialists
Singapore
Bangalore
Shanghai
Chennai
Hyderabad Manila
Ahmedabad
Changshu
Guangzhou
Mumbai
Hangzhou
GujuratBhubaneshwar
PuneGoa
Thiruvananthapuram
Coimbatore
New Delhi
Suzhou
Beijing
Uzbekistan
Azerbaijan
Georgia
Hanoi
Indonesia
Japan
Kuala Lumpur
Afghanistan Li’an
PM Group in Asia
Office:Project Location:
Vientiane
Shenzhou
Xi’an
Munger
Indore
Chandigarh
Ho Chi Mihn City
11
Dhaka
Mandalay
NantongWuxi
• ADB
Setting Up PM Group’s Business in China 2008-2010
We allowed 6 months at
least
Identify premises and
enter appropriate
lease
Register company name with Ministry for Industry & Commerce
Register WOFE
Capital requirements
Business License
Design License
Enterprise Registration
Tax Registration
SAFE Registration
12
Establishing a WOFE
• Engage local professional advice
• Develop a realistic business plan for WFOE licence submission
• Ensure all your registrations are applied for in the correct sequence
• Three months to submit all registrations – or start again!
• Comply fully with the terms of your registration
• Accept that China is more bureaucratic than Ireland – be patient
• Get it right first time – do your homework in advance
• Pay your Taxes!
13
Where to locate your office?
• Important for Registration!Which city?
• Shanghai – Puxi or Pudong?• Satellite cities with SEZ – Suzhou?
Which area in larger cities?
• PM Architecture & Engineering Design Services
Ensure correct designated zoning for
your business!
Enter appropriate lease
Must have lease before commencing
registrations for WOFE
14
Company Name
• Carrefour = “the family has happiness and luck here”
• Mercedes-Benz = “run fast”• PM 飘马 = “flying horse”
Chinese is an ideographic language
• RMB 50M Registered Share Capital“China” in name
• PM Architectural Engineering Consulting (Shanghai) Co. Ltd.
The ideal is: Trade Name + China +
Industry + City + Co Ltd
15
Legal & Contracts
Civil law based on statutes not common law
No systematic notification of new law
Enforcement of IP breaches
Different region – different interpretation
Dispute resolution – arbitration = uncertainty
Need very good in-country legal advice!
16
Finance & Tax
Capital Structure – equity v loan = 70:30
Total investment formally estimated at close to €2 million in business plan
20% paid up front
Withholding tax for outward payments
Taxation interpretation can vary with districy
Cash accounting – not accrual
Books must be kept in local language as well as in English
Renminbi not a traded currency
17
Key Success Factors
18
• Having a business model that matches our clients’ needs
• Investing properly in the business from the outset, giving our new venture the necessary momentum
• Having the right management team on the ground in China
• Achieving early wins with our MNC clients in Q1 and Q2 2011
• Developing a good working relationship with alliance partners
• Knowing our weaknesses – don’t overstretch and deliver on our commitments to clients
The project delivery specialists
Project ExperienceChina
committed.The project delivery specialists
AstraZeneca, ChinaHigh Containment OSD Facility, Taizhou
Project Type:
Secondary Pharma
Value: Confidential
Completed: In progress
Area: 6,000 sq. m
Services: E, P, CQ
• Redevelopment of an existing Sterile Fill Finish facility to an OSD facility
• Phased development commencing with 500 million tablets per year and increasing to 1 billion after the first year
• Scope includes Concept, Basic & Detailed engineering design, Process Procurement and CQ for Phase III
Johnson & Johnson, ChinaLiquid Medicines Facility, Shanghai
21
Project Type:
Secondary Pharma
Value: US $50 million
Completed: In progress
Area: 9,200 sq. m
Services: E, PM & Technical Support of PCMCQ
• Formulation and Filling of liquid OTC medicines
• Includes raw materials handling, liquid pre-mix & mixing processes, and 5 filling & packaging lines
• Meets J&J SDPs, China CFDA GMP v 2010 and Australian TGA compliance
CP Guojian Pharmaceutical (CPGJ), ChinaBiopharmaceutical mAb Facility, Pudong
22
Project Type:
Biological
Value: US $110 million
Completed: In progress
Area: 10,000 sq. m
Services: Engineering Design & CMCQ Support
• Large-scale GMP mAbs manufacturing facility
• 6 x 5,000L cell culture capacity• Provided CD, process
procurement and CM support
Abbott Nutrition, ChinaGreenfield Infant Formula Facility, Jiaxing
23
Project Type: Nutritional
Value: US $150 million
Completed: 2014
Area: 32,000 sq. m
Services: Engineering Design & CM Support
• Provided Concept, Basic & Detailed Design and onsite CM support
• Includes Wet Mixing, Evaporator, Spray Dryer (4 t/hr.), Dry Blending, Packaging
• Production, CUB, Warehouse, Office Labs and WWTP areas
Wrigley, China Greenfield Confectionery Facility, Guangzhou
Project Type: Confectionery
Value: US $173 million
Completed: 2011 & 2013
Area: 46,000 sq. m
Services: MP, E, P & Sustainability Review
• 2011 - Greenfield Campus with a CUB, Admin and Production facility designed to expand in 3 phases
Givaudan, ChinaGreenfield Flavours Plant, Nantong
Project Type:
Commodities
Value: US $50 million
Completed: 2015
Area: 12,000 sq. m
Services: EPCM
• Includes 3 x Spray Dryers and 2 x Powder Blenders
• Currently in Startup Phase
Mondelez, ChinaBrownfield Biscuit Factory Expansion, Suzhou
Project Type: Confectionery
Value: US $95 million
Completed: 2015
Area: 36,000 sq. m
Services: MP, EPCM, LEED
• 450m Linear Production Line in a Brownfield Biscuit Manufacturing facility
• PM Group provided full EPCM services for this project
The project delivery specialists
Ease of Doing Business & Transparency….
trust.The project delivery specialists
China’s Ranking 2009 - 2014
28
IMPROVING
DISIMPROVING
Construction Safety – a BIG issue!!!!
29
The project delivery specialists
Personal Reflections
detail.The project delivery specialists
Personal reflections on going International…….
‘Gravitational pull’ of the
home market
Need a huge ‘escape
velocity’ to overcome it!
Deep market research
Intensive travel
Can deliver a remote
business service
Technical know HOW and WHO
Must have Champion in the field and a Sponsor in
HQ
Patience - it will take
longer than you think!
And cost more than you think!
31