PA can provide access to turnkey manufacturing capacity in a low cost region that will dramatically reduce your unit cost with no capital investment and low implementation risk. In effect, you get a free factory.
Low manufacturing unit cost and low risk
Manufacturing industries are under relentless cost pressure. There are, however, huge opportunities to enter emerging markets with a lower unit cost.
Achieving a step-change reduction in unit cost requires relocating to a low-cost economy. This usually means substantial investment of capital and management time - and carries major business and implementation risk.
But it is possible to get the benefit of manufacturing in a low-cost economy with very low risk. By using the financial mechanism of ‘offset credits’, PA can provide access to turnkey manufacturing capacity in a low cost region that can dramatically reduce your unit cost with little or no capital investment and low implementation risk.
PA’s expertise in this area is recognized in our award-winning manufacturing relocation work for a leading international automotive components supplier – further details here.
What is an ‘offset’?
Offset benefits (usually referred to as ‘offsets’) can be broadly defined as an arrangement under which foreign suppliers implement specific projects aimed at partially or fully compensating (offsetting) the buyer's procurement costs. Offsets are generally used to improve a country's domestic industry, achieve technology infusion, promote investment and create job opportunities. The term offsets implies any transaction which can be demonstrated by the supplier as effectively saving or generating direct or indirect benefits to the procuring country. Offsets are used by 85% of the world's countries.
Low implementation risk thanks to PA’s extensive experience
The risk associated with migrating to low cost economies is dramatically reduced when PA’s extensive experience is applied, as we:
- provide the manufacturing, operational and product migration expertise to make it happen
- support you with our financial and taxation structuring expertise and experience of negotiation with local governments
- exploit the offset credits mechanism to ensure you have a low risk exit strategy as well as the opportunity to acquire the capacity.
Learn more about the benefits of offsets
For more on the benefits of offsets and PA’s award-winning expertise in offset credits and manufacturing relocation, please click here.
Contact us
To discuss how PA’s production-line relocation experience can help your organization to set up 'free' factories please contact:
Linda Pearse
PA Consulting Group
123 Buckingham Palace Road
London
SW1W 9SR
United Kingdom
Tel: +44 1763 267137
E-mail: linda.pearse@paconsulting.com
