by Ben Wilson
Our Consulting team‘s strategic planning and grant assistance drives $10m+ revenue from international expansion in food manufacture.
Our client company had been involved in manufacturing key food ingredients for over 40 years across multiple Australian states.
The Director was approached by one of their overseas customers who was aware of a gap in their own market, for which our client’s products were thought to be a perfect fit. The overseas customer proposed a partnership to target this market, so our client’s Director engaged Lambourne Partners Consulting to provide strategic planning assistance regarding the proposed partnership, and to assess the viability of the business investment in the overseas market.
How We Helped
We began with in-depth market research of the specific segment the companies product was targeting. We approached the NSW Export Office & AUSINDUSTRY to gather the latest information regarding export assistance and regulations currently in place. We made research and considerations of Intellectual Property, Control, Branding & Repatriation of Funds, all specific to the target market. Through negotiations with overseas parties in collaboration with the Director we determined an appropriate strategy to proceed.
The strategy selected involved the incorporation of an overseas joint venture company, which would construct a factory in India for the production of the Australian companies products under a license agreement. Our client would hold half of the equity in the new Joint Venture Company. In the short term, it was determined to be economically practical to export the products directly from Australia. We prepared a Memorandum of Understanding detailing the discussions between the Australian and Overseas parties, signed for intent by both parties.
For the initial export phase of the project, we registered the company under an NSW Export Office financial assistance grant, fortunately specifically aimed at their target market. At the same time we registered them for the AUSINDUSTRY TradeX program to provide GST credits on their inputs.
We valued the Intellectual Property in the existing Australian company under internationally accepted methodologies, and transferred this to a new Intellectual Property Licensing company, to insulate the assets of the existing Australian company from any Overseas Risk. These patents were subsequently registered under the Madrid Protocol for International Patent Recognition.
We prepared a complex forecast of the potential returns on investment in this market. This forecast factored the order quantities indicated by client companies overseas, potential fluctuations in currency conversion rates, likelihood of operating disruptions, and the potential synergies with existing overseas customers of the Australian business.
Once the setup and negotiation of company details and operating procedures was complete, Lambourne Partners Audit stepped in, to complete complex due diligence works across international borders.
Through a several stage process as described above, the overseas joint venture company was set up strategically.
Currently operations are increasing and the number of customers has grown materially from those initially identified. The Director has since been approached by a much larger overseas partner with access to further markets due to the success of the venture so far.
To date, the new joint venture has generated revenues in excess of $10 million.