GLOBAL SOURCING: CONSTRUCTION EQUIPMENT

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Global Sourcing – Construction Equipment

Global Sourcing – Construction Equipment
OVERVIEW

Background European Client ‘ABC’ wanted to expand into two main markets outside of Europe i.e. Middle East & India and approached Virtual Director to help them achieve this objective. The Challenge Client had no prior experience of the Indian market and wanted to know whether any market existed for its machines. With contacts around the globe ‘Virtual Director’ was able to identify that the Indian construction sector was growing rapidly. This was due to government investment in a massive infrastructure programme, i.e. roads, hydro-electric projects, residential and commercial buildings and Indian contractors were keen to adopt technology which would assist them in faster project execution and thus qualify them for larger early completion bonuses. The Assignment Our ‘Virtual Director’ in India was able to undertake a market study to understand the use of concrete in Indian construction techniques and more specifically use of ready mix concrete. Whilst there was a significant price difference between local machines which were available at around 3,000 EUR compared to ‘ABC’ machines which were available between 70,000/100,000 EUR, competitor analysis demonstrated these similar machines had a much lower production capacity. Despite this price difference significant interest was gained from the Indian market especially large contractors involved in low cost housing projects. Seven potential distributors were identified by our ‘Virtual Director’ to give ‘ABC’ pan India presence and he was able to set up individual discussions with all companies concerned.

THE RESULT

The Result Distributor agreement signed in our ‘Virtual Directors’ presence with one particular company in Bangalore, to sell ‘ABC’ machines in four Southern Indian states. Our ‘Virtual Director’ was also able to advise ‘ABC’ on certain exemptions available in India whereby machines can be imported at lower duties thereby making them even more competitive. Currently ‘Virtual Director’ is assisting ‘ABC’ in developing their marketing efforts in India. Our ‘Virtual Director’ has helped oversee this process with other associates who have the relevant experience in the market place to lead this initiative and establish contact with potential customers and decision makers. The result ‘ABC’ continues to expand its customer base within the Indian market.