Technomic Asia is now the sole in-country consulting partner for Pan Asian, a commercial debt recovery consulting firm, in China and is also now managing the company’s overall expansion in Asia.

“We are pleased that Pan Asian has placed its trust in Technomic Asia to help the company build a dominant market position in Asia. Our work for the company in China has provided the blueprint for our expansion across the region,” said Technomic Asia Principal, Michael Zakkour.

“As the Western economic downturn continues, the need for Pan Asian’s products and services in the region has grown exponentially and Technomic is excited to help steer the company into the future in this most important of markets,” continued Zakkour.

Highlights of the expanded relationship include:

• -Responsibility for all Pan Asian strategies, implementation and operations in China
• -Hosting Pan Asian’s personnel at TA headquarters in Shanghai
• -Opening Pan Asian offices in Vietnam, Malaysia, Thailand and Taiwan

“Technomic Asia has proven itself to be an invaluable asset in every facet of our business activity in China, providing us with the guidance, strategies, infrastructure and relationships for measured, strategic and rapid growth” said Keith Stillings, CEO of Pan Asian.

About Technomic Asia
Technomic Asia, a division of Tompkins International (www.tompkinsinc.com), is a business strategy and supply chain consultancy with more than 30 years of experience helping clients plan and execute Asian growth and operational strategies. Technomic Asia’s mission is to assist globally-expanding companies to build their Asian businesses through high quality market strategy and implementation assistance.

The report, titled “A Strategic Assessment of China’s Light Passenger Vehicle Aftermarket, Sixth Edition,” stems from Technomic Asia’s ongoing primary research into the Chinese auto marketplace and its key players. Other major findings indicate that the light passenger vehicle car parc has expanded to more than 62 million units, with middle-aged vehicles (4-9 years old) reaching a 50 percent share. More information is available at www.technomicasia.com/auto.

“The aging and expanding parc, coupled with private ownership of vehicles at more than 70 percent today, supports strong growth in the parts and service market,” said Steve Ganster, managing director of Technomic Asia and primary author of the report.

“The market is fragmenting as more vehicles from recent market entrants, notably the Japanese, hit the road,” Ganster said. “Both local and international parts and service companies, as well as retailers and other service organizations, are aggressively developing their infrastructures to penetrate this dynamic market. Though many challenges exist, the outlook for growth remains robust, with the market expected to expand at 21 percent per year through 2015.”

“The market’s greatest opportunity, and also its most significant challenge, is in solving the complex and multi-layered distribution structure”, states Ganster. “For companies who can bring scale, expertise and sound strategy to solve distribution challenges, the prize will be great.”

This unique China auto report offers valuable statistics, insights and analyses to assist management to successfully address this important market, including:

• Perspective on China’s automotive market, including a long-term growth outlook for China’s light vehicle market in terms of types of vehicles, key OEMs, growth drivers and constraints, etc.
• Overview of the automotive aftermarket in terms parts and service, covering size, segmentation, parts types, key players and trends
• An assessment of China’s automotive parc in terms of size, vehicle composition, age, technology base and future growth
• Detailed descriptions of key market segments, covering maintenance and light repair, collision and other repairs with insights on market size, segmentation, services provided, pricing, etc., and current and forecasted 2015 value by vehicle and service type
• A detailed evaluation of the parts supply chain, with descriptions of structure, key players, pricing characteristics and future dynamics
• Perspective on key opportunities and challenges facing players in China’s automotive aftermarket

For more information on the report, or to purchase a copy, please visit www.technomicasia.com/auto or call our offices at +1-919-855-5437 (U.S.) or +86-21-6473-2588 (China).

About Technomic Asia
Technomic Asia, a division of Tompkins International (www.tompkinsinc.com), is a business strategy and supply chain consultancy with more than 30 years of experience helping clients plan and execute Asian growth and operational strategies. Technomic Asia assists companies in entering the Asian market or in expanding their business by providing critical market insight, an understanding of business potential and assistance in designing the optimum strategy for success. Technomic Asia’s Steven Ganster authored of “The China Ready Company,” a book that details the process to develop a successful China strategy. www.technomicasia.com

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Media interviews with Steve Ganster contact amaruggi AT providentpartners DOT net or call 612-293-7640

JANUARY 19, 2011 SHANGHAI – Despite challenging market conditions and an increasingly competitive business environment, U.S. companies in China closed out 2010 with all-time performance highs and remain confident about their future business prospects, according to the 2010–2011 China Business Report co-authored by Technomic Asia and The American Chamber of Commerce in Shanghai.

Technomic Asia’s 2010 survey of U.S. businesses in China was based on 346 responses from AmCham members, and powered by Technomic Asia’s survey technology, analytical expertise, and on-the-ground knowledge of China business across dozens of industries built up over 25 years of China consulting.

According to Technomic Asia’s survey analysis, U.S. companies had their best-ever performance since 2000, with revenue, profitability and market share up sharply from 2009, following an uneven period of growth from 2008-2009 due to the global economic downturn. Among the report’s highlights:

• 87% of U.S. companies in China report revenue growth, surging from 47% in 2009 and 77% in 2008.
• 79% of U.S. companies in China say they are in the black, up from 65% in 2009 and 70% in 2008.
• 61% of U.S. companies in China state that they gained market share for China products and services, up from 40% in 2009 and 52% in 2008.

Optimism about the China market continued in 2010. About 9 out of 10 U.S. companies in China forecast a revenue increase for 2011. China is the No. 1 priority for 20% of U.S. companies, and the percentage of companies that will increase China investment in 2011 by more than 15% doubled over 2010.

“There has always been a great deal of optimism about the China market, mostly based on the hope of future opportunity,” says Steve Ganster, Managing Director of Technomic Asia. “But now we’re seeing a more ‘mature’ or seasoned optimism, grounded in the reality that succeeding in China is critical to the future of the company no matter the challenges it presents.”

Although showing impressive financial results, U.S. companies report that China remains a challenging business environment for a variety of reasons. Finding enough qualified staff is the No. 1 business challenge, and business competition is picking up not only between U.S. and other foreign companies but also between U.S. and Chinese companies – both private and state-owned enterprises (SOEs).

“This year’s survey results indicate that U.S. companies in China have come to expect challenges in the China market, have weighed them against the opportunities and have found a way to succeed despite them,” says Brenda Foster, president of AmCham Shanghai. “Nonetheless, it is essential that the U.S. continues to engage China to address key business challenges that hinder market access today.”

China’s regulatory environment remains a top hurdle that can hinder growth and threatens full and fair access to the China market. Nearly two thirds (63%) of surveyed companies characterize the regulatory environment in their industry as either “not changing” or “deteriorating” over the past year. Nearly one half report a regulatory environment that favors local Chinese companies over foreign rivals.

Other results show U.S. companies remain focused on accessing the domestic China market. An “In China for China” strategy of producing in China for the domestic China market was the top priority of 55% of companies, and was pursued in some capacity by 76% of companies. The vast majority of those that scored highest on the Success, Confidence, and Welcoming indices were “In China for China.”

About the 2010-2011 China Business Report
Co-authored by Technomic Asia, AmCham Shanghai’s 2010-2011 China Business Report is based on the 2010-2011 China Business Survey, a comprehensive survey of U.S. companies with operations in China. First launched in 1999, this year’s report builds on ten years survey data. This year’s survey was conducted online from mid-November to early December 2010. A total of 346 companies participated, yielding a response rate of 25%. The China Business Survey is one of the longest running surveys of U.S. companies in China. With the analysis and insights of Technomic Asia, the China Business Survey is the most analytically and methodologically rigorous survey of foreign businesses of its kind in China.

About Technomic Asia
Technomic Asia is a Shanghai-based market growth strategy and supply chain consulting firm. In China since 1985, Technomic Asia was one of the first foreign consulting firms licensed to practice in China. Technomic Asia works across multiple industries and has completed over 800 assignments throughout Asia. For more information, visit www.technomicasia.com or write to franktsai@technomicasia.com.

Technomic Asia, the Asian arm of Tompkins International, is a strategic consultancy with more than 25 years of experience helping clients plan and execute Asian growth strategies. Technomic Asia assists companies in entering the Asian market or in expanding their business by providing critical market insight, an understanding of business potential and assistance in designing the optimum strategy and implementation for success.

“After almost ten years as part of WTO Chinese companies have had time to learn about their rights on the international business stage. Collecting on corporate debts they once wrote off as a cost of doing business is a natural step for Chinese companies, all they lack is the right partner to guide them. We look forward to helping Pan Asian Commercial Consulting Group become that trusted partner in China,” said Steve Ganster, CEO of Technomic Asia.

“Technomic Asia will be an invaluable asset at Pan Asian Commercial Consulting Group for establishing and fostering relationships with key government and trade organizations in China. Boasting a client list that includes GM, GE and Sara Lee, their portfolio of work speaks for itself. Their enthusiasm for our services has been overwhelming,” said Lisa Baines, COO of Pan Asian Commercial Consulting Group, LLC.

About Pan Asia Commercial Consulting

Pan Asian Commercial Consulting Group, LLC is a commercial debt management company experienced in the recovery of business-to-business debt, focusing on China and other Pacific Rim countries.
For more information about Pan Asian Commercial Consulting Group, LLC please visit their website at www.panasianccg.com.

“We have seen an increase in projects and interest in China from foreign firms, particularly in the last six to twelve months,” said Technomic Asia’s Managing Director Steve Ganster. “Expanding Technomic Asia’s ability to address growing interest from businesses considering China markets, tending to ongoing service for existing clients, and providing our perspectives on the Pacific Asia region to media covering China business issues will be among Mr. Zakkour’s responsibilities,” Ganster added.

Zakkour provided strategic and sourcing advice to more than 100 multinational firms during his time with China BrightStar and prior to that as Vice President for Beijing-Gongmei, a manufacturing conglomerate in China. His insights from a decade of living and working in China make Zakkour a sought after speaker and analyst for media commentary. Zakkour will continue that role at Technomic Asia. Major topic areas of Zakkour’s presentations include US-China political and trade relations, manufacturing, sourcing and supply chain management, China distribution logistics, and sustainable growth initiatives in China, among other topics.
 
Here is a snapshot of the events at which Zakkour was recently featured as a speaker: New York Bar Association’s Asian Affairs Committee; The Thompson-Reuters annual China Conference; Columbia Business School; and the Wharton School of Business China Conference. Additionally, he serves on the board of directors of the Asian Financial Society and is Lecturer in Residence at The China Institute in New York City.

Zakkour will also contribute to the China Business Podcast and Blog along with Tompkins’ Global Supply Chain Podcast. His current post highlights the latest five-year economic plan from Beijing which takes effect in 2011.

About Technomic Asia
Technomic Asia, the Asian arm of Tompkins International, is a strategic consultancy with more than 25 years of experience helping clients plan and execute Asian growth strategies. Technomic Asia assists companies in entering the Asian market or in expanding their business by providing critical market insight, an understanding of business potential and assistance in designing the optimum strategy for success including M & A. Technomic Asia’s Steven Ganster and Kent Kedl are co-authors of “The China Ready Company,” a book that details the formation of a successful China.

About Tompkins International
Tompkins International transforms supply chains for profitable growth. For more than 35 years, Tompkins has evolved with the marketplace to become the leading provider of growth and business strategy, global supply chain services, distribution operations consulting, information technology implementation, material handling integration, and benchmarking and best practices. The company is known for innovative, practical solutions that improve supply chain performance and produce value-based results. Headquartered in Raleigh, NC, Tompkins has offices throughout North America and in Europe and Asia. For more information, visit www.tompkinsinc.com.

Kedl is quoted by Adam Minter in a story for MinnPost, “Minnesota’s not going back to being the same old economy. China’s not going to stop being the second largest economy in the world. Everything has changed.” Governor Pawlenty is leading a delegation of 42 business leaders from Minnesota to China, its mission, establish and reinforce relationships that benefit consumers and each other’s economy.

Kedl references a Chinese saying,”if you have a relationship, then you have a road,” according to Minter’s piece. Adam Minter is a an American writer in China. His blog is Shanghai Scrap.

Ganster’s comments about how businesses can “China-fy”, a termed coined by Ganster, centered on the importance of long term engagement with the country, its economy and culture. The Memphis Commercial Appeal article reported others on the panel and the audience agreed with the tenets of Ganster’s concept. Ganster has seen many strategies come and go in his nearly three decades analyzing China’s economic and political journey.

Ganster shares his perspectives about developing sound business strategies for the China market in the book The China Ready Company. The book’s co-author Kent Kedl provides ongoing commentary on the China Business Podcast.

Kent is a frequent contributor to articles and reporters’ background research. Kent can be heard on the China Business Podcast.

I was quoted recently in an article in the New York Times on the growing demand of direct sales in China.  The article is very well done and I highly recommend anything that David Barboza writes on China … the man knows his stuff about China and he really does his homework.  One of our Five themes for China in 2010 and Beyond is “Distribution” and the direct-sales model is a very interesting one for China so I wanted to add a couple more comments here.

For those not familiar with it, “direct sales” is when individuals are recruited by a company to sell their products directly to consumers who are, typically, their friends and family.  There are many well-known companies that have used this model such as Mary Kay, Amway and Avon (those of a certain age will remember the old commercials in the U.S. whose tagline was “Ding-dong, Avon Lady calling!”).  As David’s article notes, direct sales have not always had smooth sailing in China as the government has been wary of allowing individuals to start up their own businesses (because, as we know, once people have money-power they want all sorts of other power).  I think that the combination of entrepreneurial sellers and adventuresome consumers are fertile ground in China for direct selling business models for two main reasons: first, direct-selling can leverage relationship-based sales which have a long history and solid cultural foundation in China; and secondly, direct-selling goes around the modern sales channels in China which, although growing in strength, are still very immature and often very difficult to work with.

One of the main reasons that China’s distribution networks have been so fragmented is that they have been based on guanxi or relationships which are simultaneously personal and professional.  In a traditional distribution model, this guanxi holds you back because you are limited in they amount of personal relationships that you can maintain at any one time.  In other words, if my hometown is in Wuhan, all of my guanxi will likely be from that place because I grew up with many of these people, our families know each other, we went to school together, etc.  However, if I try to expand that guanxi network out to, say, a city like Chengdu (probably over 1,000 km away from Wuhan) it will not be possible to develop the same depth of relationships in that region.

Historically, sales in China have been based on this guanxi … I get the sale, not necessarily because I have the best price or the best quality product, but because I have good guanxi with you.  However, this is rapidly changing in China: while good guanxi is a necessary condition to successful sales, it is by no means a sufficient one — I now have to bring good products to the market at good prices.  And for most industrial and consumer products companies, this is a good thing because it means that they can develop more “professional” distribution channels and get a broader sales footprint in China.

So let’s go back to the direct-sales model … this is a model that leverages (and even celebrates) guanxi-based sales.  Sales most often are made to friends and family (or the friends and family of other friends) and, while these product suppliers are certainly concerned to bring good quality products to market, I would argue that they are relying even more on the strength of their sales teams’ guanxi in their local area.  The strength of the direct-selling model is that it goes with the flow of traditional Chinese culture, not against it, by making each sale personal.  And all you have to do is multiply the large number of people in China by their growing disposable income and you understand why executives at companies such as Mary Kay, Amway and Avon are having a hard time controlling their excessive drooling.

The second reason why I think that the direct sales model will have some legs in China is that it goes around the typical sales channels for consumer products: retail stores.  This is a topic too large for one blog post but suffice it to say that China is in the midst of a sea-change in its retail channels, moving from a “traditional” model — dominated by mom-and-pop stores and small specialty stores — to a “modern” model dominated by the larger hypermarkets, “Big Box” and grocery chains.  If you look at China as a whole, a slight majority of consumer products are sold through traditional channels; however, the growth is in the modern channels and particularly in the so-called “hypermarkets”, chains such as Wal-Mart, Carrefour, Rt-Mart, etc.

Initially, consumer products companies were excited about this change … selling to many thousands of traditional outlets is much more difficult than selling to fewer (and larger) modern chains.  However, what everyone is realizing is that these modern chains, while good looking on the outside, are often very difficult to work with simply because they are so big and wield so much power.  The cost of doing business with them — what consumer products companies call “trading terms” — are often quite high in China compared to the rest of the world so while consumer products companies are often happy with the volume that moves through modern channels, they are not as happy with the margins (and multinational consumer products companies are ALL about the margins!).  These companies are often finding that the hypermarkets are not all that good at merchandising and marketing themselves so consumer products companies often feel that they end up paying a lot in terms of marketing fees and not getting all that much for it.

However, the direct-sales model does an end-run around these channels and goes directly to the consumer.  The only marketing fees are the commissions to the sellers so, theoretically, both the margins and the volumes can be quite high.  Consumer products companies don’t have to deal with the retail stores nor do they have to work with distributors to those stores (a topic for another blogpost). In our work with consumer products companies, some of them — and some big names too — have secretly asked about direct-selling and whether or not they could do it.  To date, none of them have but that doesn’t mean that they are not thinking about it.

Now this direct-selling model is not all beer and skittles and in his New York Times article, David Barboza identifies some of the challenges that companies such as Mary Kay are facing (for one, direct sales companies are required to open their own “brick and mortar” retail stores through which to do they actual distribution of product).  Suffice it to say, there is no magic bullet in China retail … we are in the midst of a mini-revolution in China retail and all players — retailers, product companies, distributors and consumers — are changing faster than we can keep up with them.  However, given the sheer size and potential on the China consumer market, everyone is dumping massive amounts of investment and are exhibiting as much patience as they can.  Keep your eye on the direct-sales model in China … we could see it expand beyond the companies we typically associate it with and move into areas we never thought possible.

Raleigh, NC – December 31, 2009 — China will provide necessary growth for US companies in 2010. Kent Kedl, managing director of Technomic Asia in Shanghai, says there are five opportunity signs for companies to watch in China this year. Kedl highlights those areas below:

· Growth – The World Bank projects a robust GDP for China following an anticipated 8 percent growth in 2009. There will be few places in the world with this kind of growth.

· Distribution – Companies who are in China already need to find a better way to get their products to market. It is the classic case of getting products to market, which requires a transportation infrastructure and integrated supply-chains. The Chinese government stimulus and other programs are addressing infrastructure needs. The last two decades of manufacturing investment and export experience within China make this country keenly attuned to the benefits of integrated supply-chains. US companies are becoming familiar with cities like Dalian, Chongqing, and Hangzhou as well as 40 others as those areas approach double digit annual growth over the next several years.

· Consolidation – The majority of China’s industrial sectors are over-crowded and too fragmented. As the market matures and distribution consolidates, the companies themselves will consolidate.  Look for this to happen in automotive, primary metals (particularly steel and aluminum), consumer products (food and beverage, mid-range body care, all ranges of homecare).

· Mergers and Acquisitions – A separate and complex strategy unto itself is divided into two major categories, 1) into China and 2) out of China.

o Into China – Foreign companies need speed-to-market, and M&A is the best way to achieve coverage and market share.
o Out of China – This is still in the very early stages but we should see some mid-level deals done by Chinese companies overseas (not only the big energy deals).

· China’s Global Influence – China is emerging as a leader as the dust settles on the global economic crisis. Politics aside, China will continue to expand its shoulders upon which the rest of the globe will build their own economies.

Key Sectors to Watch in China
Kedl believes there are several key industrial sectors to watch in 2010 in China. They include: 1) Medical, particularly healthcare services, look for the privatization of hospitals, 2) Automotive, consolidation of OEMs, growing strength of dealers and dealer groups, stronger aftermarket parts distribution, and 3) Consumer products, particularly in the 2nd and 3rd tier cities.

Technomic Asia conducts primary and secondary research in China markets for Fortune 100 and midsize companies. Kedl was also deeply involved in a recent 2009 China Business survey done for the American Chamber of Commerce in Shanghai. According to Kedl, “This survey showed that even companies who are in China for 10 years need to reassess how they approach China because the country has changed from a provider of low cost production to a growth consumer market.”

In addition to research, Technomic Asia uses their research to assist companies develop strategies to participate in China markets and sourcing.

The China Business Podcast, hosted by Kent Kedl, will focus in greater detail on these growth areas in upcoming episodes in January, 2010. Listen to them at iTunes, Stitcher Radio, or at www.technnomicasia.com/blog. Here is the first podcast with an overview of these business opportunities to watch in 2010 in China.

About Technomic Asia
Technomic Asia, the Asian arm of Tompkins International, is a strategic consultancy with more than 25 years of experience helping clients plan and execute Asian growth strategies. Technomic Asia assists companies in entering the Asian market or in expanding their business by providing critical market insight, an understanding of business potential and assistance in designing the optimum strategy for success including M & A. Technomic Asia’s Steven Ganster and Kent Kedl are co-authors of “The China Ready Company,” a book that details the formation of a successful China strategy.

Shanghai and Raleigh, NC — December 16, 2009 — Technomic Asia jointly released the 2009 China Business Report with the American Chamber of Commerce in Shanghai (AmCham Shanghai) this week which revealed China as one of the few growth areas for US business around the world. Kent Kedl, vice president and general manager of Technomic Asia in Shanghai, said, “This does not surprise me even in the midst of a ‘mostly global’ recession. The survey shows, contrary to the conventional wisdom that China is only a source of low-cost labor, in fact American companies are finding incredible growth opportunities in China.” This year’s survey showed that nearly 60% of American companies are investing in China for the revenue created by the China market. “After 25 years of working with companies on their China growth initiatives, we are seeing these companies realize some big pay-offs,” said Kedl.

“American companies are finding that their performance in China is the bright spot in an otherwise challenging global picture,” said Brenda Foster, president of AmCham Shanghai. “This is creating a level of optimism among American companies investing in China that we have not seen for many years. Even though this is a very difficult time in the global economy, China remains quite strong and our report shows that American companies are poised to take advantage of market opportunities.”

Technomic Asia partnered with AmCham Shanghai to produce the survey, now in its tenth year. “AmCham Shanghai was delighted to work with Technomic Asia, which helped develop and administer the survey and led the analysis,” said Foster. “Their long experience in the market here and their deep knowledge of foreign investment in China brought our survey’s insight and impact to a new level.”

A key finding of the survey is the factors related to a company’s success in China. The following factors were found to be significantly related to a company’s profitability in China:
• Size: especially those with more than US$10 million in revenue
• Experience: especially those with more than five years in China
• China revenue relative to global revenue: companies who derived more than 5% of global revenue from China
• China priority: companies that set China as their #1 priority in global investment plans
• China sales footprint: those companies with sales offices in two or more cities in China

Nearly 45% of the survey respondents have been in China for longer than ten years and, says Kedl, “It is clear from this survey that experience counts – China takes some getting used to and the longer companies are here, the more they learn and the more successful they tend to be.” Kedl sees companies continuing to focus on growth in 2010, expanding their penetration of markets into Tier 2 and Tier 3 cities.

In this survey, more than 64% of companies said in 2009 they were profitable to very profitable, “a phenomenal statistic given the state of the global economy” says Technomic Asia’s Dr. Kim Woodard, one of the leaders of Technomic Asia’s Mergers and Acquisitions practice. “I am encouraged by the five-year outlook from survey respondents,” added Woodard, noting that nearly 90% are optimistic about China’s market. Woodard suggests this number is a supportive indicator of the increase in inquiries Technomic Asia is getting about mergers and acquisitions in China. “We are seeing those players who are confident that their five-year growth strategy must include a major stake in China planning their next move,” says Woodard.

Technomic Asia also produces the award-winning China Business Podcast which will have a series of episodes related to the 2009 China Business Report. Those shows are available on iTunes, and Stitcher Radio as well as the Technomic Asia Blog. The China Business Podcast has been in production since 2005 and was the first podcast about conducting business in China.

About Technomic Asia
Technomic Asia, the Asian arm of Tompkins International, is a strategic consultancy with more than 25 years of experience helping clients plan and execute Asian growth strategies. Technomic Asia assists companies in entering the Asian market or in expanding their business by providing critical market insight, an understanding of business potential and assistance in designing the optimum strategy for success including M & A. Technomic Asia’s Steven Ganster and Kent Kedl are co-authors of “The China Ready Company,” a book that details the formation of a successful China strategy.
Media Contact: Albert Maruggi
612-325-8126
amaruggi@providentpartners.net

Kent Kedl was quoted in this article and work with the Chamber on this survey. There will be more analysis of this survey on this blog in the coming days. We’ll also have a podcasts on the topic. What are your thoughts, is China a necessary component for a company to grow globally?

December 1, 2009 – Minneapolis, MN – Stitcher Radio, the popular audio streaming service that eliminates the task of downloading podcasts, has added the China Business Podcast to its show lineup. This mobile application allows you to stream podcasts to your phone or iPod Touch device without having to sync it through your computer.

“We are getting comments from listeners who are increasingly using their smart phones to access the podcast,” said Kent Kedl China Business Podcast host, and Managing Partner of Technomic Asia. “Since Stitcher is available on the iPhone, many Blackberry models, the Palm Pre, and as Stitcher announced will soon be on the Android mobile platform, being added to Stitcher will be extremely helpful for CEOs and other international executives,” Kedl added. Streaming the audio, instead of downloading makes listening to the China Business Podcast as simple as hitting play.

Kedl’s more than 20 years in China, his wit, and interviews with noted business leaders make the China Business Podcast a fast paced, informative, and entertaining program. Kedl is a regular resource for journalist covering China business issues and China strategies.

Technomic Asia is an international consultancy helping companies from around the world develop strategies for entering the China market or sourcing materials from Asia. Kedl has seen increased interest in the podcast, now in its fourth year of production, because of the global economic situation, greater appeal in the China merger and acquisition market, and a high demand for understanding the China health care market which is going through a health care reform. Recent episodes over the last two months have focused on China M & A , health care, and China’s efforts to stimulate the global economy. Technomic Asia will celebrate its 25th anniversary in China in 2010.

The China Business Podcast also has a blog associated with the program and can be found at The China Business Podcast is recommended by highly regarded blogs such as the China Law Blog. In December, the China Business Podcast will feature episodes on recapping 2009 and predictions for China events that will impact business in 2010.

About Technomic Asia
Technomic Asia, the Asian arm of Tompkins International, is a strategic consultancy with more than 25 years of experience helping clients plan and execute Asian growth strategies. Technomic Asia assists companies in entering the Asian market or in expanding their business by providing critical market insight, an understanding of business potential and assistance in designing the optimum strategy for success including M & A. Technomic Asia’s Steven Ganster and Kent Kedl are co-authors of “The China Ready Company,” a book that details the formation of a successful China strategy. (www.technomicasia.com)

Shanghai – August 21, 2009 – Technomic Asia CEO, Steve Ganster, announced today that Dr. Kim Woodard will join the company as of September 1, 2009 and will help lead the company’s Asian M & A practice, focusing on developing a comprehensive deal execution capability. Technomic Asia is a wholly-owned subsidiary of Tompkins International, a leading business and supply chain consultancy, and has been assisting companies from around the world on their China and Asian business strategies.

“Kim’s extensive track record and on-the-ground experience in China and other Asian markets will significantly enhance our ability to serve our clients who are trying to profitably build their Asian businesses through acquisition”, stated Steve Ganster. “For the past decade, we’ve had a strong M&A strategy practice to find and cultivate deals; however, now we are seeing a growing demand to extend that practice to assist in executing deals. Kim will lead the development of these capabilities.”

“With economic recovery already happening in China and clear signs of a bottoming out in the West, we anticipate strong activity in M & A in China as early as the 4th quarter this year,” said Kent Kedl, Technomic Asia’s Shanghai based General Manager. “Many deals have been done in China – but doing the right deal in the right way is a huge challenge. Kim’s proven success in executing deals will enable us to provide a complete package to our clients.”

Dr. Woodard has twenty years of business experience in China, primarily in investment planning and strategy. He lives and works in Shanghai and Beijing, where he led Javelin Investments, a boutique advisory firm focused on M&A. He has served as a Vice Chairman and a Member of the Board of Governors of the American Chamber of Commerce in Beijing. Kim was previously Chairman and General Manager, AMP China Investment Company, part of the world’s leading producer of electronic and electrical interconnection products, where he was also responsible for strategic planning, project development, and government relations in China. He previously worked, also in China, for John Deere and for A.T. Kearney. Dr. Woodard holds a Ph.D from Stanford University in international relations. He is fluent in Mandarin Chinese and first traveled to China in 1971 at the invitation of the late Premier Zhou En-lai.

You can find more details on the China M & A markets on the China Business Blog and our China M&A presentation on SlideShare

About Technomic Asia
Technomic Asia, the Asian arm of Tompkins International, is a strategic consultancy with more than 25 years of experience helping clients plan and execute Asian growth strategies. Technomic Asia assists companies in entering the Asian market or in expanding their business by providing critical market insight, an understanding of business potential and assistance in designing the optimum strategy for success including M & A. Technomic Asia’s Steven Ganster and Kent Kedl are co-authors of “The China Ready Company,” a book that details the formation of a successful China strategy. (www.technomicasia.com)
# # #

Media Contact

Albert Maruggi, for Technomic Asia
651-695-0174 – office
612-325-8126 – cell
amaruggi@providentpartners.net

Shanghai, China, June 21, 2009 – Steve Ganster, Executive Director of Technomic Asia, will highlight the opportunities and challenges of mergers and acquisitions in China at the GIC sixth annual Mergers and Acquisitions Summit held in Shanghai on June 25. Ganster says China’s business is good for M&A activity, however it is still a maturing market that requires a much different approach from what many US companies expect as they consider expansion through acquiring a stake in China companies.

“US companies need to modify their approach in making acquisitions in China putting a great deal more emphasis on cultivating relationships with target companies. Acquisitions are in an embryonic state in China, and the rules of the game are not well established. Much more energy needs to be spent in the discovery stage, getting to know the stakeholders and what they want from a deal. Local Chinese management often goes into the discussions not fully understanding what they want,” says Ganster.

“In the US, the emphasis is placed on financial statements in a relatively transparent process. In China, relationship is the key filter through which the deal must successfully pass.” Ganster added.

China’s companies are searching for natural resources and big name brands to beef up their portfolio or supply chain in anticipation of increasing growth. Since 2007, outbound investment has grown from $26.5 billion to $52.2 billion in 2008, according to Reuters.

One example of this activity is the recent intended acquisition by Sichuan Tengzhong Heavy Industrial Machinery, a private machinery maker, to purchase the Hummer brand from bankrupt General Motors.

The Mergers and Acquisition Summit will be held at the Crown Plaza Century Park, Shanghai June 25 and 26.

Editors & Bloggers Note: A soundbite from Steve Ganster is available with a description of the bite below.
Soundbite with Steve Ganster on China Mergers and Acquisitions
IN: After I’ve identified…
OUT: Can’t do that successfully in China
Length: :38

A full interview with Steve Ganster on the Merger and Acquisition topic is available on the China Business Podcast

About Technomic Asia

Technomic Asia (www.technomicasia.com), a division of Tompkins Associates, is a business strategy and supply chain consultancy with more than 25 years of experience helping clients plan and execute Asian growth and operational strategies. Technomic Asia assists companies in entering the Asian market or in expanding their business by providing critical market insight, an understanding of business potential, and assistance in designing the optimum strategy for success.

Media Contact: Albert Maruggi amaruggi@providentpartners.net
612-325-8126

This is an excellent article by Steve Minter, Editor-In-Chief of Industry Week, as he examines some of the turnaround planning being done by companies in China. My colleague Steve Ganster, who has provided business recession recovery advice over three decades in China is interviewed for this article.

RALEIGH, NC and SHANGHAI, China, June 1, 2009 — Global business consultants Jim Tompkins and Steve Ganster view this week’s meetings between U.S. and Chinese economic policymakers as a key stepping stone to worldwide economic recovery that is already underway in the U.S.

On his first official visit to China, U.S. Treasury Secretary Timothy Geithner is focusing on ways to end the global economic recession. “It’s clear that the U.S. is in recovery mode,” says Tompkins, CEO of global supply chain consulting firm Tompkins Associates. “The U.S. consumer is driving this comeback, and the return of consumer confidence will lead to an increase in business volume and capital investment in China. We are now seeing that China’s manufacturing sector has expanded for a third month, and U.S. manufacturing and construction spending is looking more optimistic. Thus, having the world’s first and third largest economies convening now to solidify strategies is very important.”

Tompkins, author of The Great Recession Gives Way to the Great Comeback, notes that one impetus behind the rapid, deep spread of the recession was organizations’ super-fast and super-efficient global supply chains. “These same supply chains will now lead us out of the downturn,” Tompkins says. “It will take all the stimulus weapons of the U.S., China and Europe – plus the supercharged supply chains – to complete the Great Comeback globally.”

Ganster, Managing Director of Technomic Asia, knows the economic heartbeat of China well, having worked and lived there during previous downturns while helping U.S. companies establish operations. “During the U.S. recession of 2001 when China was at the threshold of entry into the World Trade Organization (WTO), forward-thinking U.S. companies who saw both the impact of China becoming a member of the WTO and the quick return of the U.S. economy were establishing China operations. They reaped the benefits for the next 8 years of China’s nearly double-digit growth,” he says.

More recently, Ganster has been connecting the dots between government stimulus and growth in China’s consumer goods sector. “I just met with the leader of the supply chain initiative for China’s largest grocery store chain. They are building a state-of-the-art distribution center in part with government funds,” he reveals. “This is one of many examples that lead us to believe that the Great Comeback is underway.”

As Geithner talks with Chinese officials, some of the U.S.’s top industries will be hitting their economic bottoms and gearing up for a post-recession return to recovery, growth and prosperity. Tompkins urges companies to look beyond the macro economic headlines of the China talks and focus on their sector’s details to convert today’s comeback plans into tomorrow’s profits.

“While the May Consumer Confidence reading of 54.9 surprised some, our research in such industries as food, cosmetics, pharmaceuticals, and inexpensive consumer electronics shows that these sectors are on the upswing,” Tompkins adds.

Tompkins Associates (www.tompkinsinc.com) designs and integrates global end-to-end solutions for companies that embrace supply chain excellence. For more than 30 years, Tompkins has evolved with the marketplace to become the leading provider of global supply chain services, distribution operations consulting, technology implementation, material handling integration, and benchmarking and best practices. Subscribe to Tompkins Associates RRS feed.

Technomic Asia (www.technomicasia.com), a division of Tompkins Associates, is a business strategy and supply chain consultancy with more than 25 years of experience helping clients plan and execute Asian growth and operational strategies. Technomic Asia assists companies in entering the Asian market or in expanding their business by providing critical market insight, an understanding of business potential, and assistance in designing the optimum strategy for success.

Resources for Western Business in China: Great Comeback Blogs, Caught Between the Tiger and the Dragon (Book), The China Ready Company (Book), China Business Blog and Podcast, Asian Sourcing Cost Reduction (podcast)

FOR IMMEDIATE RELEASE

CONTACT: Myra Schwartz, 919-855-5533
mschwartz@tompkinsinc.com

The fourth edition of the report, described in detail here, was released in partnership with the Automative Aftermarket Industry Association. You also can watch an audio-video slideshow of an overview of the data contained in the report.

For more details or to place an order for the report, visit technomicasia.com/auto.

NEWS STATEMENT FROM TECHNOMIC ASIA:

China’s government has just announced its fourth-quarter GDP at a paltry 6.8 percent, leading to a full-year GDP growth in 2008 of 9 percent, down from 13 percent growth in 2007. This marks the first time since 2002 that China’s GDP growth was below 10 percent. Sound like doom and gloom?

Conversely, the United Nations Development Program still predicts that, despite this slowdown, China will contribute more than 50 percent of the world’s total economic growth in 2009. Rather than become preoccupied with slowing growth in China, managers and investors should focus on the unique and plentiful growth opportunities for their companies, according to consultants at Technomic Asia, a Shanghai-based firm that helps Western companies develop China business growth strategies.

“If companies looking to do business in China focus on macro numbers, they’re missing the point,” said Steven Ganster, Technomic Asia’s managing director. “What does GDP mean to a company anyway? If the government says the economy will grow 8 percent in 2009 then you can bet it will; whether they need to plow $1-2 trillion into infrastructure, or even ship millions of refrigerators and small motorcycles into the countryside at huge subsidies in order to keep factories working.”

Management needs to get underneath these macro statistics and look at their specific market segments, Ganster added.

“We have a client in building products where the construction sector is expected to remain flat at best in the year ahead,” he said, “but their strongest product line helps make buildings more energy-efficient, and that’s a huge growth opportunity right now in China.”

Over the years, measurements and predictions of China’s economic conditions have been all over the map. More important than aiming strategies based on these illusory targets, companies should focus on more directly controllable and meaningful insights, according to Kent Kedl, general manager of Technomic Asia.

“Despite the supposedly dire circumstances in China, we’re going to see more big winners here in the year ahead. They’ll be the companies that put aside these macro numbers and dive deep into the specifics of their particular products, customers and channels,” Kedl said. “To succeed, a business has to go to where the action is, and in today’s global economy, that’s still China.”

(Official news release here)

He talks about the importance of “MH 101,” referring to the fundamentals of materials handling. Andel quotes Technomic Asia’s Steve Ganster on the state of materials handling in China:

Ganster told me there’s a wide spectrum of warehousing in China, from dirt floors to state of the art. In fact China represents what the U.S. was like at several stages between World War II and up to the 90s.

“They need to take it to the next level of technology with equipment, process and strategy,” he said. “The government will ensure there’s a good 8% GDP growth one way or the other this year. There’s huge investment in infrastructure. The difference is they have the cash in their bank account.”

Read the full article here.

One analyst quoted in the article says, “In the past several years when investment was booming, we were seeing a lot of waste. But now companies are rethinking their expansion plans and proceeding more carefully and rationally.”

However, some analysts say that now might be the time for foreign companies to make aggressive investments in China — acquiring companies, forming ventures, committing to solid projects and boldly entering the Chinese market.

“While things are deteriorating in the West and companies are hard-pressed to grow in their
home markets, they are finding new markets and new growth opportunities in China,” says [Technomic Asia's Kent] Kedl. “China is going to be the key path out for a lot of companies.”

You can read the full article on AmCham’s site — look for the link to the PDF at the bottom of this excerpt.

The article is clear to say that China is not the sole recipient of U.S. inspectors, but the FDA office in China is the agency’s first overseas. According to the report:

Experts welcomed the potential partnership but said it might prove largely symbolic.

“It’s kind of like an ant standing against a flood,” said Kent D. Kedl, general manager of Technomic Asia in Shanghai, which helps medical-device and pharmaceutical companies navigate the Chinese market. “The Chinese State FDA can’t monitor everything, so the U.S. FDA is going to have a huge challenge.”

For more, read the full Washington Post article here.

China’s auto aftermarket moves into high gear

SHANGHAI — Sept. 9, 2008 — Parts and service in China’s light passenger vehicle market reached an estimated US$27 billion in 2007, driven by strong expansion and continued aging of the vehicle parc, according to new research conducted by Technomic Asia, an international market consultancy specializing in China strategies for U.S. companies.

The report, titled “A Strategic Assessment of China’s Light Passenger Vehicle Aftermarket, Fourth Edition,” stems from Technomic Asia’s ongoing primary research into the Chinese auto marketplace and its key players. Other major findings indicate that the light passenger vehicle car parc has expanded to more than 32 million units, with middle-aged vehicles (4-9 years old) reaching a 41 percent share. More information is available at http://www.technomicasia.com/auto.

“The aging and expanding parc, coupled with private ownership of vehicles at almost 70 percent today, supports strong growth in the parts and service market,” said Steve Ganster, managing director of Technomic Asia and primary author of the report.

“The market is fragmenting as more vehicles from recent market entrants, notably the Japanese, hit the road,” Ganster said. “Both local and international parts and service companies are aggressively developing their infrastructures to penetrate this dynamic market. Though many challenges exist, the outlook for growth remains robust, with the market expected to expand at 19 percent per year through 2012.”

This unique China auto report offers valuable statistics, insights and analyses to assist management to successfully address this important market, including:

• Perspective on China’s automotive market, including a long-term growth outlook for China’s light vehicle market in terms of types of vehicles, key OEMs, growth drivers and constraints, etc.
• Overview of the automotive aftermarket in terms of parts and service, covering size, segmentation, parts types, key players and trends
• An assessment of China’s automotive parc in terms of size, vehicle composition, age, technology base and future growth
• A description of the maintenance and light repair service market, covering outlets, services provided, value, etc., and current and forecasted 2012 value by vehicle and service type
• A description of the collision repair market, covering the insurance market, accidents rates, service providers, service value, etc., as well as current and forecasted 2012 value by vehicle type
• A description of other major and minor spot repairs in terms of value, repair type, segmentation by age of vehicle and vehicle type, growth vector and key trends
• Collision repair market, covering the insurance market, accidents rates, service providers, service value, etc., as well as current and forecasted 2012 value by vehicle type
• A detailed evaluation of the parts supply chain, with descriptions of structure, key players, pricing characteristics and future dynamics
• Perspective on key opportunities and challenges facing players in China’s automotive aftermarket

For more information on the report, or to purchase a copy, please visit www.technomicasia.com/auto or call our offices at +1-919-855-5437 (U.S.) or +86-21-6473-2588 (China).

Blanchard’s piece reinforces part of what our own Kent Kedl had to say in his recent podcast about the “new normal” in China: China isn’t simply the cheapest place to find manufacturing labor, but (to paraphrase) it is still one of the best places to establish manufacturing operations.

As a sidebar to Blanchard’s cover story, Technomic Asia’s founder Steven Ganster writes about how Western companies can “China-fy” their manufacturing operations. From the article:

Achieving the right level of China-fication in facility set up, process and equipment is the key to success here. China-fication is transplanting to China what you do well in manufacturing in the West, while exploiting the unique competitive aspects of the Chinese market. China-fication also means you have to do things differently than you do in your home market while not meaningfully compromising the integrity of the end result.

Ganster goes on to remind manufacturers of Technomic Asia’s favorite refrain, to remember the “6 Ds”: due diligence, due diligence, due diligence.

Read the full article on IW’s Web site.

As companies are learning that what works at home won’t necessarily work abroad in the Chinese marketplace, they’re finding new ways to cater specifically to the needs and desires of Chinese people — rather than shoe-horning American products into a distinctly non-American set of tastes.

Watch the full segment, about 6 minutes long, here.

From the article:

Although foreign companies have had a presence in China since the mid-1980s, China’s reputation as a risky place to do business has not abated. Rather, in some ways, it has increased over time from the regulatory changes in the 1990s through today’s concerns over the quality and safety of Chinese-made products.

Certainly, there are legal and financial tactics that companies use to manage risks in China, and companies should take every precaution to insure that they are on solid ground. There are some broader risk management imperatives, however, that companies should also consider as they establish their China strategies.

Read the full article.

From the article’s introduction:

China’s burgeoning automotive market is having a significant and strategic effect on companies’ supply chains. Western parts and material suppliers have little choice but to respond proactively to China’s exploding automotive market or risk not only missing new demand opportunities in China but also opening the door for both international and Chinese companies to come after them in the West.

[...]

In the past few years, first-tier parts makers have turned to their supply base, passing on the pressure to localize to second- and third-tier suppliers. This cycle creates both opportunities and threats at all levels of the supply chain. As a result, many small- to mid-sized firms (SMEs) are now challenged to respond — or else.

Read the full article here.

A quick excerpt:

U.S. companies planning to build their success on domestic markets alone will be gone in five years. That’s Jim Tompkins’ opinion, anyway. As president & CEO of Tompkins Associates, he sees an opportunity for U.S. companies to take advantage of the changing demographics among China’s 1.3 billion people.

The article also includes this quote from Steve:

“In 20 years [China's] economy will be as big as the U.S. Automotive will be as big or bigger in less time than that. Warehousing and land costs are going up, as are labor costs, and it will push them to more automation,” [Ganster said.]

Read the full article on MMH.com.

From the Time article:

Since Hong Kong’s return to China from Britain in 1997, entry to the mainland has become even easier and faster—visas are processed with great speed and little hassle, making entry points into Shenzhen, the booming megalopolis adjacent to Hong Kong, among the busiest in the world. But all this has been upset in recent weeks: the Chinese government has mysteriously stopped issuing multiple-entry visas—an essential tool for Hong Kong’s doing business with China—in a move that has sparked confusion and frustration.

[...]

Most China analysts, though, expect these difficulties to disappear after the Olympics. “They’re having a few jitters, but China isn’t going to cut off its nose to spite its face,” says Kent Kedl, a consultant at Technomic Asia, a Shanghai-based market strategy firm. Plans are already afoot to give Hong Kong permanent residents of any nationality visa-free access to the mainland within the next few years, the kind of privilege that millions of Asians who work in the West can only dream about. “Getting my Chinese staff to the U.S. is an absolute nightmare,” says Kedl. “Let’s have a bit of perspective.”

Read the full story on Time’s Web site.

IndustryWeek’s Adrienne Selko reported on the China presentation here. From the IW article:

Companies should develop operations in China that export back to the U.S. as well as sell to customers within China, says Tompkins. “Integrate sourcing from China with product sales in China and make Asia part of your overall global supply chain and customer base,” he adds. This dual strategy also recognizes the growing middle class in China, currently estimated at 100 million. Opportunities for sales and distribution will expand as the middle class continues to grow.

Western companies require “competitive intelligence” in their Asian business strategies in order to be successful, however. “It is a mistake to assume that what works in the U.S. States or Europe will work in China,” says Ganster.

Read the full article here.

Jim Tompkins, CEO of Tompkins Associates, and Steve Ganster, Senior VP with Technomic Asia (a division of Tompkins Associates), addressed China’s changing business climate this morning at the 2008 North American Material Handling Show in Cleveland.

“The smartest move that material handling and related companies can make is to adopt a dual strategy,” says Tompkins. “Now, it is all about ‘globalization’ instead of ‘China-fication.’” Tompkins advises companies to develop operations in China that export back to the United States as well as sell to customers within China. “Integrate sourcing from China with product sales in China and make Asia part of your overall global supply chain and customer base,” he adds.

This dual strategy also recognizes the growing middle class in China, currently estimated at 100 million. Opportunities for sales and distribution will expand as the middle class continues to grow.

Western companies require “competitive intelligence” in their Asian business strategies in order to be successful, however. “It is a mistake to assume that what works in the United States or Europe will work in China,” says Ganster. “People, thought processes, how technology is viewed, and even the different terrain must be considered when establishing China as part of the global supply chain.”

Ganster also points out that China’s material handling industry has grown aggressively due to continued construction and industrial expansion. “Material handling equipment sales have increased 25-30 percent a year over the last four years,” he notes. “And the opening of China’s logistics market will provide a huge opportunity for suppliers to the warehouse industry.”

On the other hand, the country’s level of technology (including WMS) is still in the embryonic stage, with only about 5 percent of warehouses in China reporting that they have sufficient IT systems. “Many Chinese companies are writing their own WMS programs that are not built to international standards, and this will only add to their difficulties in globalizing,” Ganster says.

It is predicted that China will move from manual labor to automation at a much greater rate in the next five years. Manufacturers there are seeking new ways to increase productivity while cutting costs, which opens up a sure-fire niche for companies in the material handling industry.

Building a dual strategy and understanding how to compete intelligently will provide an edge for logistics, material handling, and systems integration companies to conquer the changing tides in China.

Steve’s session is titled “M&A Opportunities and Challenges in China,” and he’ll address:

• Recent developments in M&A in China
• Review of the process and its differences from the West
• Finding good prospects
• Pitfalls in due diligence
• Key principles of success

The conference site has more info about the conference topics.

Steve Ganster is featured in a Journal of Commerce article discussing the recent WTO ruling against China. A World Trade Organization panel ruled that by raising its tariffs on imported vehicle components, China violated its obligations to the WTO. From the JoC article:

The Chinese market for imported vehicles and components is booming, and the WTO ruling will have little or no economic impact on that growth, Ganster said. “The impact will be mostly psychological,” he said. In little more than a decade, China has become one of the world’s largest auto markets, and it is a profitable “magnet” of U.S. producers of autos, original equipment and after-market parts. Restrictions on foreign ownership have been relaxed, and many parts suppliers are wholly owned by non-Chinese investors.

You can read the full article on the JoC’s Web site (subscription required).

The basis of the compliant is that China’s higher taxes on imported car parts give its domestic auto makers incentive to use domestic-made parts, which in turn motivates foreign parts manufacturers to establish operations in China. The United States, Canada and the EU claim these incentives cause lost jobs in their respective countries and say that China promised not to tax car parts as is does whole cars when it joined the WTO in 2001.

Steven Ganster, managing director of Technomic Asia, a consulting firm that helps Western companies develop China business strategies, agrees that China should come into line with its WTO commitments but said cost concerns are not the only reason companies look to China for business opportunities.

“Lower costs are perhaps the first thing many people think of when they think about setting up shop in China,” said Ganster, who leads Technomic Asia’s U.S. office in Chicago. “Depending on the business, motivations include gaining direct access to local markets, better control of the supply chain and more effective distribution.”

Technomic Asia’s clients include many Fortune 500 companies and dozens of small and midsize businesses, including many automotive manufacturers and parts suppliers. Ganster and his colleague Kent Kedl, who runs Technomic Asia’s Shanghai headquarters, are the co-authors of “The China Ready Company,” a book that guides executives through the considerations to be made in developing a strategy for doing business in or with China.

“The WTO and foreign governments need to continue to pressure China to uphold the agreements it made when it joined the organization, but foreign manufacturers shouldn’t sit and wait for WTO sanctions to force China to change its tariffs or other practices,” Kedl said. “No one knows how long that could take, but it won’t be quick. Rather than wait, foreign companies should become more active in China to assess their opportunities and to build an effective supply chain in-country.”

(Original news release here)

“The past 30 years have been a continuous evolution, and expansion in Asia is the next natural step for us,” says Jim Tompkins, President and CEO of Tompkins. “Technomic Asia has more than two decades of experience in helping clients to enter, expand and optimize their operations in China and throughout Asia, and we are excited to expand our Global Supply Chain Services.”

According to Steve Ganster, Technomic Asia’s Managing Director, there is a definite need for this type of fusion. “By merging with Tompkins, we have the opportunity to combine resources, experience, and knowledge and share the highest level of business strategy and global supply chain expertise with our clients.”

Tompkins’ Global Supply Chain Services help clients define and implement:

• Global business and supply chain strategies, supply chain transformations, and organization development.
• Global supply chain processes that improve efficiency, effectiveness, and business performance.
• Global trade and risk management strategies and processes.

A Global Integrated Business Solutions (GIBS) company, Tompkins is the leading provider of end-to-end business strategy and supply chain consulting services — from supplier’s suppliers to customer’s customers, as well as from planning through transformation and implementation. The company is headquartered in North Carolina with offices throughout North America, Europe and Asia.

Media Contact
E-mail Myra Schwartz or call 919-855-5533.

About Tompkins Associates
Tompkins Associates designs and integrates premier, global end-to-end solutions for companies that embrace supply chain excellence. For more than 30 years, Tompkins has evolved with the marketplace to become the leading provider of global supply chain services, distribution operations consulting, technology implementation, material handling integration, and benchmarking and best practices. The company is headquartered in Raleigh, NC. For more information, visit www.tompkinsinc.com.

Kent offers three key pieces of advice for getting started, including this important piece: Don’t but the tactic for entering the Chinese marketplace before the strategy. As Kent says, “That’s like my saying, ‘Where are you going on vacation?’ and you say, ‘I’m driving a Buick.’ “

Technomic Asia’s Kent Kedl shares some of his experiences in the story, as well. Listen to the story or read a transcript on Marketplace’s Web site.

And our friends at the China Law Blog wrote a piece about the Marketplace story, as well.

Also, stay tuned for more episodes of the China Business Podcast in writing on PodsInPrint.com.

For most foreign companies establishing a business in China, the phrase “China market entry” is a one-time process of market assessment, strategy planning and corporate structuring. Once the business license is issued, there is a palpable sense of relief among the management team – “Whew, market entry is done,” they say, maybe hoisting a few congratulatory pints between then, “Now bring in the implementation team to get things going!”

However, those that have been here for awhile understand that “China market entry” is not a one-time thing and that successful companies – i.e. those that are making money here – are continuously revisiting and refreshing their market penetration strategies.

You can read the rest of the article here (PDF).

Technomic Asia’s own Kent Kedl will present highlights from the report along with other chamber leaders and industry experts, including AmCham 2008 Chairman-elect Nor Coquillard, Jeffrey Bernstein of Emerge Logistics, and Stephanie Liu of Armstrong World Industries. This year’s report offers insight into responses on a wide range of challenges and topics, including the top 2007 China business challenges, business performance, strategy and goals, the operating environment and local Shanghai issues.

“One of the most prominent issues facing companies doing business in and with China right now is product safety,” Kedl said. “Whether you’re making food or toys or pharmaceuticals, or even sourcing from China, vetting your supply chain and maintaining tight control over the product you’re selling is paramount.”

The “Launch of the AmCham Shanghai – 2007 China Business Report” event will take place at 11:30 a.m. on Friday, Dec. 14 at the Four Seasons Hotel in Shanghai. For more details, contact AmCham Shanghai at (8621) 6279-7119 or amcham@amcham-shanghai.org.

To read the full article, hit the PDF link at the end of this summary. Here’s a quick overview, borrowed from AmCham Shanghai’s site:

The August 2007 Mattel recall was arguably the most damaging for China this year. Mattel shook already weak consumer confidence in Chinese product quality and safety when they recalled 1.5 million Chinese-manufactured Fisher Price toys.

Despite Mattel’s apology that design flaws and poor specifications were largely to blame, confidence in Chinese product quality remains low. More recently, Australian-sold Bindeez beads (Aqua Dots in the U.S.) were recalled after being found to contain a chemical that metabolized into gamma hydroxybutyrate (GHB), better known as the “date rape” drug, when ingested.

Questions surrounding toy safety are at the forefront of American minds this holiday season, which begs the question: how did we get into such a quality crisis?

Technomic Asia’s Kent Kedl reminds readers of the WSJ article of the need to take responsibility for vetting suppliers and sources in China (and elsewhere, of course):

Industry analysts say many U.S. companies save money by sourcing in China but are reluctant to spend on vetting supply chains. “You can’t just throw the [orders] over the Great Wall and hope it comes back good,” says Kent D. Kedl, general manager for Technomic Asia, a consulting firm in Shanghai that advises U.S. and European clients. He says companies “need people camped out” in China.

Another person quoted in the article, Clara Shih, president of Best Buy Produce International, adds: “People in this country don’t really care [about food quality] as long as it’s cheap.”

The article says several recent recalls of Chinese goods have involved product substitution. Technomic Asia’s Kent Kedl says:

…product substitution is a common problem when dealing with Chinese factories. He cites problems including companies that substitute low-quality screws or fasteners.

“It could be because the Chinese company doesn’t know any better, or may be trying to cut corners and use cheaper product,” he said.

Read more at the wsj.com (registration/subscription might be required).

One particular issue Kent discusses with CNBC’s Amanda Drury and Sri Jegarajah is China’s policy favoritism toward technology and high-quality goods. They also discuss corruption and intellectual property concerns, but Kent is clear to point out that what happens “on the ground” is what really matters — “What happens in the central government doesn’t really translate down here [on the front lines, in the real world].”

For more on this issue, listen to Kent’s recent podcast on the China Party Congress.

The article discusses a new class of leaders coming up through the ranks in China’s government and the impact this group will have on local and foreign businesses. From the article:

Until now, China’s leaders have “had a definite discomfort in dealing with the outside,” says Kent D. Kedl, a China hand for the past two decades and now general manager of Technomic Asia, a Shanghai-based market strategy consulting firm. Most are career bureaucrats in their 60s who studied hard sciences or engineering. Few have graduate degrees and some have no higher education at all. Mao Zedong’s comrades-in-arms are long gone. But Hu’s cohort is from the first post-revolutionary generation and has not shed all the remnants of the old ideology.

Read the rest of the article from BusinessWeek.

For years, American consumers have enjoyed falling prices for goods made in China thanks to relentless cost cutting by retailers such as Wal-Mart and Target.

But the spate of product recalls in recent months — Mattel announced another last week — has exposed deep fault lines in Chinese manufacturing. Manufacturers and analysts say some of the quality breakdowns are a result of financially strapped factories substituting materials or taking other shortcuts to cover higher operating costs.

Among the China consultants and other experts quoted is Technomic Asia’s own Kent Kedl. Read the full article from the LA Times.

Also, see the China Law Blog for more discussion on “The Meaning of Made in China.”

Most Western companies that import materials and products from China expect negative effects, including price increases, from China’s new VAT refund rate policy, according to a recent survey. The survey, conducted by China strategy consulting firm Technomic Asia, examines the impact this new VAT policy is expected to have on affected companies.

The new VAT refund rate policy, announced by the Chinese government on June 19th, will reduce the amount of VAT refund Chinese exporters will receive. The scope of the new policy’s impact will depend on the exporter’s corporate structure and the type of product it exports, but this survey shows that this policy change will have a direct impact on the competitiveness of Chinese exports. Foreign and Chinese companies exporting from China, as well as Western companies using China as an export source for foreign market consumption, will be affected.

Some key findings from the survey:

• Approximately 70 percent of respondents were not fully clear on the potential impact from the new VAT policy. Most anticipate some negative fallout, but only 25 percent would expect “very negative” economic consequences.
• Virtually all respondents expect their current suppliers to raise prices. More than 60 percent of respondents expect prices to go up by 3 percent to 5 percent or more.
• 60 percent of respondents believe the VAT change will have greater consequences than the appreciation of the RMB, China’s currency, this year.
• Only 10 percent intend to shift supply sources to other countries, though roughly 40 percent are still uncertain and few who intend to establish manufacturing in China will alter their strategy as a result of the VAT refund change.
• A number of different countermeasures will be used to offset the impact of the VAT policy. More than half intend to “share the burden” with existing suppliers. Some respondents even see potential advantage over competition as a result of policy change, notably over low-end Chinese exporters.

“This policy change is a major step by the Chinese government to level the playing field, and it will clearly affect the weaker suppliers,” said Steve Ganster, managing director of Technomic Asia. “But in the Western markets where Chinese suppliers enjoy a dominant market share, those suppliers will have the power to pass on the higher costs to their customers.”

These findings reflect a survey of 82 Western companies currently sourcing products or materials from China. A summary of survey results is available by contacting Technomic Asia at info@technomicasia.com.

With its export-driven economic growth on the line, the Chinese government has taken aggressive steps to safeguard the reputation of its goods. [...] The measures are “a combination of window dressing and substance,” says Steve Ganster, the managing director of Technomic Asia, a Shanghai-based consultancy.

“The window dressing is important politically, but I think there will be true substance that, like anything in China, will trickle down and have an effect in the bigger market.” But until that effect takes place, the drumbeat of product recalls looks set to continue: on Tuesday, reports emerged that Mattel would announce another toy recall, over lead-based paint traced to a different Chinese manufacturer.

Read the full article on Time’s Web site.