Our building products team is engaged by a major building products and services company in southern U.S. to identify potential Chinese manufacturing partners to serve in an OEM capacity. The Client has over 30 years of flooring experience and currently installs in over 30,000 new housing starts per year. The Client is one of the U.S.' leading experts in the field of wood flooring and wants to leverage that knowledge into developing and marketing a "best of breed" wood flooring offering. In January 2005, our team was retained to develop and implement the Client’s product development strategy in China.
- Phase 1 - Our team first conducted an in-depth analysis of the China wood flooring industry by attending trade shows, visiting domestic point of sales, and speaking with current American distributors of Chinese flooring products. Then we pre-qualified potential partners based on the Client's requirements for management style and capabilities and then conducted on-site due diligence and inspections of machinery, materials, production process, QA, and above all, people.
- Phase 2 - After working with the Client to identify the top manufacturer, we facilitated all discussions and negotiations between our Client and the Chinese manufacturer throughout the product development stage. This was the first experience working with a foreign company for both the Client and the manufacturer, thus, it was crucial that differences in language, customs, and business practices were properly managed. Over the course of 6 months, 8 new wood flooring lines were developed and approved to the satisfaction of the Client.
- Phase 3 (actually initiated in the middle of Phase 2) - We negotiated, on behalf of the Client, an Exclusive Supply Agreement for the North American territory valued at over $50 million USD over the next 6 years. We were able to balance the manufacturer’s immediate needs for cash flow with our Client's goal of investing gradually.
Our building products team has developed a cross-pacific supply chain for products within the fastest growing wood flooring category by bridging an up-and-coming Chinese wood manufacturer with the right skills and technologies with a leading U.S. wood flooring expert who has established distribution channels and marketing know-how.