Tractus in China

Tractus Asia established its office in Shanghai in 1998 before China was admitted to the WTO and its economic growth boom. While China remains the world’s manufacturing hub and the go-to location for investors who are drawn by the world’s largest population and second largest economy,including a broad array of market opportunities in manufacturing and services, China is changing as costs rise, growth slows and the government slowly engineers its economic transformation to a consumer driven economy.

Its once dominant position as the most attractive investment destination in Asia is being challenged by the slowing economy and rising labor costs relative to other Asian economies. Nevertheless, opportunities are still abound for companies wanting to capitalize on China’s global position. The Middle Kingdom’s middle class is booming, providing opportunities in consumer goods, services and agro-food sectors. Furthermore, outbound investment (OFDI) is on the rise, as Chinese companies are more eager than ever to find new opportunities abroad and the central government is actively promoting it. Few economies in the world have the same potential as China has.

Tractus China has a proven track record of advising and assisting companies make informed decisions about how to structure and where to locate their investments in China’s complex, challenging and rapidly changing economy. Since 1998, our team in China has grown to 18 professionals and support staff supporting our consulting, economic development and business Inc.ubator clients.

Strategy & Execution

We built our business around the need for corporates to find the optimal site locations for their investments, to acquire industrial real estate and to negotiate competitive investment incentive packages in China. As China has changed, so has the nature of our client work. While the flood of greenfield investments in manufacturing has tapered off, multinationals that built portfolios of industrial, warehouse and office real estate throughout the country are considering how to restructure and rebalance their manufacturing footprints to be more efficient and competitive.

While new manufacturing investments and expansions have slowed, Chinese and foreign companies are embracing the use of China-focused shared service centers to more efficiently manage their China operations, and the Tractus’ site selection team assists our clients with the evaluation of labor market dynamics as part of developing a site location strategy for these centers.

Companies also rely on us to undertake market research, market opportunity and business case assessments and advise them on the most appropriate market entry strategy for their business. These strategies may include:

  • exporting into the country through a dedicated representative or agent
  • establishing a start-up greenfield investment requiring the identification of a new site and construction of facilities
  • entering into an equity joint venture or acquiring an existing business, or
  • entering the market utilizing Tractus’ business Inc.ubator services

Tractus’ business Inc.ubator was conceived as a cost effective and low risk way for companies to evaluate the China market without the expense of formally establishing a subsidiary or business entity. Our business Inc.ubator clients utilize Tractus services such as:

  • legal entity to employ dedicated China staff
  • office space as a place to do business
  • HR, administration and accounting shared services team for back-office support
  • senior management and Directors for experienced oversight

to establish a presence in the market before making a formal commitment to establish a legal entity and start-up operation in China.

Tractus’ business Inc.ubator has proven to be an effective vehicle for companies such as:

  • Lake Region Medical to market their medical guidewires
  • Fort Wayne Metals to sell their special wire-formed alloys and components used in medical devices; and
  • NovaTech Engineering to provide innovative beak treatment services for the poultry industry

to build their business in China. They have all experienced exponential sales growth and substantial market penetration by leveraging the Tractus Inc.ubator to accelerate their China market entry execution.

Tractus provides project management services overseeing the design, engineering, and construction contracts of new production facilities or the upgrade of existing ones, on behalf of our clients, such as:

  • BohmeChemie
  • Kennametal
  • Brady
  • AMCOL International
  • Hanesbrands
  • Wescast Industries

Regardless of the investment strategy chosen, the Tractus China team has the expertise and experience to support our clients with their investment strategy execution from registration of the legal entity, recruitment of key management personnel, selection of professional service vendors to managing the design, engineering and construction project management of a new or existing facility.

Strategy

  • Market Opportunity Analysis
  • Regulatory Analysis
  • Business Case Assessments
  • Feasibility Studies

Execution

  • Site Selection
  • Real Estate Acquisition
  • Incentives Negotiations
  • Government Approvals
  • Start-up Management
  • PM & Client Rep

Business Inc.ubator

  • Recruiting Assistance
  • Office Space, Admin & Management Oversight
  • Operations Management

Corporate Finance

As markets in Asia mature and become more competitive, oftentimes the best strategy for accelerating market entry is to enter into a joint venture or acquire an established firm. While everyone must have a China business strategy, joint ventures and acquisitions in the Middle Kingdom can be deceptively difficult to conclude successfully due to regulatory issues, differences in culture, and expectations of Chinese investors.
Tractus’ China corporate finance team has years of experience negotiating joint ventures, acquisitions and dispositions. The team has assisted companies to:

  • identify and screen acquisition targets and joint venture partners
  • formulate optimal corporate/deal structures
  • undertake financial modeling and analysis
  • undertake financial and operational due diligence
  • support negotiations and deal documentation through closing on both acquisitions and dispositions

The China corporate finance team has developed significant experience structuring private placements and raising funds for companies in a wide range of industries, particularly in the medtech space, from North America.

While markets for growth capital are highly developed in North America and to a lesser extent Europe, Asia is a relative newcomer to the venture capital and private equity scene. But there is significant interest in private and sovereign wealth funds to capitalize on the opportunities for matching Asian capital and market opportunities with medical technology firms from the US.

Tractus China’s corporate finance team has been able to successfully secure growth capital for several early and mid-stage technology firms at valuations significantly higher than might be expected from the more competitive markets in North America and Europe.

As markets in Asia mature and become more competitive, oftentimes the best strategy for accelerating market entry is to enter into a joint venture or acquire an established firm. While everyone must have a China business strategy, joint ventures and acquisitions in the Middle Kingdomcan be deceptively difficult to conclude successfully due to regulatory issues, differences in culture, and expectations of Chinese investors.
Tractus’China corporate finance team has years of experience negotiating joint ventures, acquisitions and dispositions. The team has assistedcompanies to:

  • identify and screen acquisition targets and joint venture partners
  • formulate optimal corporate/deal structures
  • undertake financial modeling and analysis
  • undertake financial and operational due diligence
  • support negotiations and deal documentation through closing on both acquisitions and dispositions

The China corporate finance team has developed significant experience structuring private placements and raising funds for companies in a wide range of industries, particularly in the medtech space, from North America.

While markets for growth capital are highly developed in North America and to a lesser extent Europe, Asia is a relative newcomer to the venture capital and private equity scene. But there is significant interest in private and sovereign wealth funds to capitalize on the opportunities for matching Asian capital and market opportunities with medical technology firms from the US.

Tractus China’s corporate finance team has been able to successfully secure growth capital for several early and mid-stage technology firms at valuations significantly higher than might be expected from the more competitive markets in North America and Europe.

Investment Attraction

  • Strategy Development
  • Targeted Marketing
  • Lead Generation
  • FDI Missions

Trade Promotion

  • Market Research
  • Distributor Searches
  • Background Checks
  • Trade Show Representation

Technical Assistance

  • FDI & Trade Attractiveness Benchmarking
  • FDI & Trade Strategy Development
  • Economic Research & Analysis
  • Government Advocacy

Economic Development

For economic development organizations (EDOs), private developers and government investment promotion agencies (IPAs) seeking to attract outbound foreign direct investment (OFDI), promote trade or develop investment attraction and trade promotion strategies and policies, China is Asia’s biggest source market for OFDI and destination for exports.

Sharing our private sector experience assisting companies make decisions about where to invest into Asia provides unique insight into what strategies should be used to attract and retain investors and promote exports as well as policies to implement to promote economic growth.

Tractus’ China economic development team leverages its experience advising and assisting corporate investors make informed decisions about where to invest, identify, qualify and develop outbound investment leads. Outbound investment from China is largely financial, with companies seeing joint ventures, opportunities to acquire distressed assets and shares in companies as the preferred strategy to enter markets in North America and Europe.

Greenfield investments, though having the biggest profile, are fewer in number and average size, making it important for EDOs and IPAs to have a holistic approach to investment attraction encompassing both financial and greenfield investment opportunities.

Tractus represents US, EU and Asian EDOs and IPAs of regions, states and provinces, and municipalities to promote exports as well as identify outbound Chinese investors with an interest in entering these markets. We also provide sector analyses, trade show and trade mission support and representation for economic development and industry trade associations in China.

The Tractus economic development team also has significant experience undertaking technical assistance projects in China funded by multilateral organizations such as The World Bank, UNCTAD and others develop FDI attraction policies and strategies; benchmark the attractiveness of countries as destinations for FDI and undertake economic research and analysis.

Our Clients

What People Say About us

  • Yes, we will consider (Tractus) as our important resources on the U.S. market.

    Echo Gong
    Vice President, Sanqiang Company Ltd
  • Dear Kathryn (Bamberger, F&B Trade Specialist, Empire State Development), I would like to thank you for all of your hard work in supporting Empire Brewing Companies export project. There are so many exciting projects going on right now. The grand opening of our new state-of-the-art Empire Farmstead Brewery, the first export shipment to China and the official authorization of using ILNY logo on our packaging agreement, etc. We wouldn’t have been able to achieve all of these accomplishments without your support. . . .
    Empire (Brewing) is looking forward to continuing our partnership with ILNY and ESD.

    Jing Zhang
    Export Specialist, Empire Brewing Company, Syracuse, New York USA.
  • Industrial Metals International, Ltd (IML) first attending (sic) the 2015 CIE after learning about the event 15 days before it was to take place. The ESD team in New York and in China were amazing and were able to arrange for IML to attend the 2015 CIE and also have some B to B meetings with potential customers. . . Our experience at the Kunshan CIE event but more than that the ESD Team in New York and in China the past 2 years was very good for IML and has been the catalyst for new export work for us into China. . . I will re-state again that the ESD Team has really helped us out and we found that our participation was very positive for the future of our export growth . . . IML looks forward to working with ESD in the future as we look to grow our export business in the next 3-5 years as the Aerospace Market starts to move into a growth mode.

    Aimee Okamoto
    Manager of Business Development, Industrial Metals International Ltd., Ronkonkoma, NY 11779 USA
  • Our engagement with Tractus continues to be positive. We`ve worked with Tractus on a number of different projects in China. Tractus has a firm understanding of our value proposition, extremely well connected in Asia and is flexible with their execution. Throughout the projects we were kept informed and provided with regular information on the success and progress. Tractus has executed several successful campaigns and we would have no hesitation in using their services again in the future.

    Michelle Gubatan
    Manager, Business Development, Toronto Global
  • Performance and output improvements in our company, largely lead by the Tractus Team, have exceeded expectations and been a resounding success. On the topics of manufacturing process and manufacturing efficiency (attributable to improved management quality) we are extremely appreciative and helpful.
    Tractus has an intimate, hands-on approach to manufacturing and the manufacturing management process. The gains we have experienced while working closely with their seasoned team members have exceeded our expectations and proven there is no limit to how far we could push efficiency improvements; even in a labor intensive manufacturing process.

    Colin Oswald
    Production Director, Sorrelli Jewelry
  • Tractus was initially engaged to assist us on selling a manufacturing facility in China. As is so often the case, the project evolved in complexity and scope over time. The final successful transaction required a unique structure including the sale of a business and a holding company. Throughout the lengthy process, Tractus demonstrated perseverance, flexibility, and nuanced skills to match the ongoing challenge. I can say without reservation that without their resources, the project would never have succeeded.

    John Beattie
    VP-Treasurer, Spectrum Brands, Inc.
  • Overall performance has been good. Excellent support for business startup questions and China regulatory processes. Setup and startup of our facility has been excellent”.Our success is a direct result of the Tractus team’s oversight and constant counseling.

    Tolomatic
    Tolomatic executive’s formal review of Tractus’ services.

For more information about the business strategy and execution capabilities of Tractus China and how we can assist you to make informed decisions about how to invest in China contact below

Strategy & Execution

Herminio Andres

General Manager

Corporate Finance

Richard J. Smith

Head of Corporate Finance

Economic Development

John J. Evans

Managing Director

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Contact Tractus China

Suite B,22nd Floor,
1800 ZhongshanWest Road,
Shanghai 200235
CHINA