Case Study: Transforming a business trading model in China

Head of Transformation – Greater China
Head of Transformation – Greater China

Background

A global engineering business focused on world-class power and propulsion systems for Aerospace, Defence, Marine, and Nuclear had £2bn in revenues from business in Greater China, yet continued to manage this business through a representative office. The structure was unsustainable for the size and complexity of the future business needs.

How We Helped

  • Developed and executed a programme to ensure the new company was fully operational to meet contractual requirements exceeding £100m. Rapidly navigated complex post-establishment registration processes, culminating in the required VAT taxpayer status.
  • Transfer of +110 people and assets, established service agreements, and de-registered the representative office.
  • Achieved full operational status in line with all global group requirements; including the new financial accounting system, reporting and banking processes, transfer pricing documentation.
  • Ensured capitalisation remained sufficient to sustain growing contract volume and trading requirements of all sectors. Accomplished through proactive dialog with business sectors to understand the detailed forecasts for contract timing, pricing, and costs.
  • Recruited and developed local accounting and international tax teams to ensure sustainability.
  • Engaged in customer negotiations to develop commercially sound operating models, interfaced with local suppliers and advisors, created joint venture structures, asset management, and service provision.

The Results

Successfully delivering this programme transformed the operating model in China and was delivered in time to realise 20% cost savings on +£100m contracts. The established local team had the competencies required to provide services and ensure on-going commercial success.