Countertrade Mechanisms Used to Transform a Struggling U.S. Manufacturing Company into a Profitable Global Business
Here's What We Do Better
Background
The client was a U.S.-based manufacturing company that specialized in producing industrial chemicals. Their target market was other manufacturers in the United States, but they were struggling financially due to intense competition, rising production costs, and limited growth opportunities in the domestic market.
Problem
The client faced several challenges, including declining sales revenue, high operating costs, and limited market access. They were also experiencing difficulty sourcing raw materials domestically, which further increased their production costs. These problems left the company with significant financial losses and threatened their survival.
COUNTERTRADE SOLUTIONS
SOLUTION
As the countertrade consultant, we helped the company establish several countertrade mechanisms that would generate cash revenue and reduce their operating costs. These mechanisms included tolling agreements, economic enhancement programs, and buy-switch-transfer (BST) agreements.
Implementation
We helped the company establish tolling agreements with a Canadian-based chemical manufacturing company, allowing them to use the Canadian company’s equipment and facilities to produce their chemicals. This reduced their production costs significantly, and they were able to pass on the savings to their customers, increasing their sales revenue.
Implementation
We also helped the company implement economic enhancement programs by partnering with local businesses and governments in the countries where they wanted to expand their market. The company provided training and development programs for local businesses, which helped them become more efficient and productive, leading to increased demand for the client’s products.
Implementation
Finally, we helped the company establish BST agreements with several European-based chemical manufacturing companies, enabling them to switch ownership of production facilities and equipment after a certain period of time. This allowed the company to acquire production facilities in Europe and gain access to new markets, while also generating revenue from the sale of their own facilities in the United States.
Result
RESULT
As a result of the countertrade mechanisms we implemented, the company experienced significant improvements in its financial performance. They increased their sales revenue by 150%, reduced their production costs by 50%, and expanded their market presence into 10 new countries. The tolling agreements with the Canadian company alone saved the company $10 million in production costs, while the BST agreements generated $20 million in revenue from the sale of their U.S.-based facilities.
CONCLUSION
Through the implementation of several countertrade mechanisms, we were able to help a struggling U.S.-based manufacturing company transform into a profitable global business. The tolling agreements, economic enhancement programs, and BST agreements provided the company with access to new markets, reduced their production costs, and generated significant revenue.
What YOU CAN DO TO
ACHIEVE SIMILAR RESULTS
-
Analyze your company’s financial situation and identify the key challenges affecting your profitability, such as high production costs, limited market access, and intense competition.
-
Research and understand various countertrade mechanisms that can help you address these challenges, including tolling agreements, economic enhancement programs, and buy-switch-transfer (BST) agreements.
-
Identify suitable partners and target markets for implementing these countertrade mechanisms, focusing on opportunities that can generate cash revenue and reduce your operating costs.
-
Establish mutually beneficial agreements with your chosen partners, ensuring that both parties stand to gain from the collaboration.
-
Monitor the implementation of these countertrade mechanisms and measure their impact on your company’s financial performance, making adjustments as necessary.
HOW WE CAN HELP YOU
ACHIEVE SIMILAR RESULTS
-
Provide expert guidance on the most appropriate countertrade mechanisms for addressing your company’s specific financial challenges and goals.
-
Utilize our extensive global network to identify potential partners and target markets that can help you implement the chosen countertrade mechanisms and achieve the desired results.
-
Assist in negotiating and establishing favorable agreements with your selected partners, ensuring that your company’s interests are well-represented and protected.
-
Offer ongoing support and guidance throughout the implementation of the countertrade mechanisms, ensuring their success and maximum impact on your company’s financial performance.
-
Share our expertise in international trade, legal, and regulatory matters to help your company navigate complex global business environments and ensure compliance with all relevant laws and regulations.
CASE STUDY SUMMARY
This case study highlights how a struggling U.S.-based manufacturing company specializing in industrial chemicals was transformed into a profitable global business through the implementation of several countertrade mechanisms, including tolling agreements, economic enhancement programs, and buy-switch-transfer (BST) agreements. These mechanisms helped the company increase its sales revenue by 150%, reduce its production costs by 50%, and expand its market presence into 10 new countries. The company saved $10 million in production costs through tolling agreements and generated $20 million in revenue from BST agreements.
By following the steps outlined in the “What You Can Do to Achieve Similar Results” section and partnering with our expert team, your company can also leverage countertrade mechanisms to overcome financial challenges, achieve business goals, and ensure long-term success in the global market.