Aubridge advised a leading U.S. wood products manufacturer in establishing a sourcing network and a greenfield operation in China. The Client is the world's largest manufacturer in its line of wood products. However, it has seen its market leading position increasingly threatened by Chinese upstarts. Over an 18 month period, Aubridge helped the Client develop and execute a custom-tailored China entry strategy.
- Phase 1 - Aubridge conducted in-depth research of the China market for our Client’s products. We identified key competitors and analyzed their business models and cost structures vis-à-vis our Client’s. We performed a preliminary screen of potential sourcing and manufacturing partners that fit the Client’s specific requirements. Finally, we developed various strategic options for the Client to enter the China market.
- Phase 2 - Aubridge hosted a visit to China by the CEO of the Client to further “kick the tires” and to conduct in-depth due diligence of potential partners. We also assessed potential sites for the greenfield factory. Together with the Client, Aubridge developed a final recommendation to the Board of Directors for the Client to enter the China market through a two-prong strategy. The recommendation was unanimously approved by the Board.
- Phase 3 - Aubridge negotiated exclusive supply agreements with finished goods and in-process raw material suppliers. We selected the greenfield factory site and secured special incentives from the local government. Aubridge served as the Client’s team on the ground in China overseeing all aspects of sourcing execution and greenfield set-up.
- Phase 4 - Aubridge developed a network of in-process raw material suppliers to ensure steady, volume production at the greenfield factory as well as export of the raw materials to the Client’s U.S. factory. During the development period, Aubridge deployed manufacturing experts to the suppliers’ factories to oversee production, inspection, packaging, and logistics.
By helping our Client set up a sourcing network and a manufacturing base in China, our Client will have the broadest product offering as well as be the world's lowest-cost producer in its products.