International development in the GCC area.
The client is a manufacturer of outdoor paving and vibro-compressed cement. When transporting such large and heavy material to foreign countries, the cost is particularly important, as weight affects the selling price in the destination country. BDB Network also assisted the company during a difficult time in which the company was emerging from a corporate restructuring procedure.
In particular , the company was selected by the GCC to the countries of the GCC (a Union that consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) country as a destination target: if the company had sold directly to the market, it would have had great difficulty finding customers because of the high cost of transportation from Italy to the Gulf countries. In fact, the competition in those countries is represented mainly by companies that produce locally, or by-products that come from countries with low labor costs, poor quality, and poor reliability.
Client: Pavings and Construction Materials Manufacturer
Services: International Business Development, International Operation
Industry: Constructions
There were two goals:
1) To relaunch the company, which found itself without a highly developed market in Italy at that time
2) To find new forms of revenue through the creation of production franchises, i.e., agreements with outdoor flooring manufacturers present in different states, selling to them, who are interested in having an Italian product of very high quality but at far lower costs than having to import the finished product from Italy.
BDB Network supported the company to create new ways to enable the export of their products, to the countries of the GCC without having the problem of high transportation costs and also significantly reduce the cost of labor. This is thanks to the new production franchising formula implemented by BDB Network, and applicable to anyone in the field.
This formula suggested by BDB made it possible to place the client in a condition of competitiveness with respect to local products, but also to obtain the interest of local manufacturers themselves, who wanted to offer their customers a product made in Italy, with very high technical, aesthetic and durability qualities, at an affordable price. It was able to be competitive in the market because through the production franchise formula, the company was able to produce a 100% Italian product, with Italian patents and formula, but without transportation costs, which would be very heavy for the type of product. The production franchise model (set up by BDB Network) has enabled the company to create a real offering of its own that can be easily replicated in other nations. Also, The commercial aspect and the production aspect are separated, leaving this company free to have its own commercial network and local production without investment in setting up its own factory.
For the interested company, transportation costs decreased by 70%.
It was also an opportunity to introduce a construction technology to the Emirates, which enables CO2 abatement and air cleaning. Therefore, the Group has become the only player to offer that technology in the marketplace: builders, as a result, have benefited from offering pollution-reducing materials that are highly valued by contractors.
Unlike other business developers, thanks to the BDB Network team's experience in both business and legal aspects, the client was offered a solution that opens up business opportunities and legally protects its brand, leaving it full autonomy in the business network.
BDB Network prevented them from investing directly in a market where the product would have no market, as it was non-competitive. In addition, thanks to BDB Network's presence in all GCC countries, we limited the damage to the client due to a wrong direct investment, which had been previously suggested by another business developer, that would have resulted in a consequent loss of money for the client.
All companies that produce machinery or construction elements on which transportation costs, as well as production costs, have a strong impact, can turn to BDB Network to find local partners that can produce their product, and at the same time secure the construction of a commercial network either directly or through a distribution agreement with the same producing partners.
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