Set up factory in China

As the increase of manpower cost and material cost day by day, every manufacturer is faced with ever-increasing cost pressure. In order to make their products competitive on world market or make more profits, they have to try everyway to reduce the costs, including improving product technical performance, developing new technology, redundancy, oversees purchasing the components, materials, WIP or product, and setting up overseas factory to manufacture components, WIP or product, etc.

The ways improving product technical performance and developing new technology will require you have excellent technical staffs with strong the technical skill and millions times of experiments, it will take months or years and may not achieve success. Redundancy is the worst way, normally lots of companies don’t take this way unless it’s absolutely necessary. Therefore lots of companies choose to overseas purchase the components, materials, WIP or product, or set up overseas factories to manufacture their components, WIP or products to reduce product cost. Overseas procurement is an interesting option for small volume orders, but for big volume orders, overseas procurement maybe not the best way, as there are lots of different potential risks you can’t control during the whole overseas procurement, such as poor product quality; the shipped products are not same as your orders; the delivery time is often delayed; you pay the balance, but factory may not delivery the goods; even more important thing is profits your suppliers or trading agents earn may be times as much as the product cost. Face to those potential risks, you can only consider to set up an oversea factory to support your marketing plan.

Lots of manufacturers think it’s very hard to set up an factory in China as there are lots of problems on it and they don’t know how to fix up. The common problems are as following:
Where are the best locations? 
Can I find suppliers?  Educated personnel?
Should I build or rent the buildings? 
Who can build to our requirements?
There are nearly 3000 industrial zones in China.  Which one is the most suitable? 
What support and problems can I get from the government? 
How much will it cost me? 
How can I reduce the risk that something goes wrong?

KENTEL SERVICE can provide the answers you need:

Feasibility Study

We help you with feasibility studies to establish the best location and develop a budget for the operating cost for your new China plant.  Such a study can provide the information you need to make the decision to go ahead.

Implementation

In the implementation phase, we can support you with a package according to your needs.  Typically, we will do a detailed search for land and properties available, negotiate the lease, prepare business registration, take in quotations for construction, renovation and fixtures to prepare the plant and offices, source and install machinery, cranes, utilities and factory services.  We will also assist you in setting up internal systems to run the plant according to local regulations and to minimize legal risk, such as Human Resources policy, company chop control, and payment control documents.  Our services also include HR outsourcing, where we act as your Human Resources department until you have set-up your own resources. 

Complete Support

During the construction period and before you put in or hire your own local management, we can also act as temporary managers, ensuring that your interests are being taken care of in the process.  We can continue to support as consultants, board members, and/or corporate supervisors.

There are many questions to be answered when you want to start up new operations in China.  To this you have the effect of the Chinese legal environment, where the laws and rules seem very clear when you first read them.  But due to the fact that new laws in China are implemented slowly during several years while their interpretations are established, the actual practiced rules by different government agencies can be quite different and also differ between the agencies and localities.  Catch 22 situations are common when rules from different agencies do not match.  However, thanks to the pragmatic approach often practiced, there is always a way. 

Choose KENTEL SERVICE

You need a new team in China. The competition for well educated, English-speaking engineers is strong.  How do I choose the right people?  How much should I pay?  What HR polices should I have?  We can help you to answer these and other internal control questions.
 

KENTEL SERVICE is also a company working with manufacturing companies interested to do business in China. Our specialized staff will follow you in your every step to turn your projects into a successful business. Thanks to our managing experience, we can help you manage your Chinese company, and help you keep control of it from a distance. Under KENTEL SERVICE’s help, we absolutely believe your company will become more competitive and will therefore be able to face the global demand.

If you still have any query or want to know more information, please feel free to contact us by kentelservice@gmail.com.