Case study : Company formation

Objective

The client’s wanted to expand their business by marketing its products for the purpose of selling and leasing them in the Middle East, Africa, the CIS countries and the South Asia region.


Case Overview

The company is a leading supplier of industrial diesel generators while also executing turnkey projects in power generation and distribution. The company is an industry leader it its region for setting up diesel base captive power plants up to 20 MW. The client has already captured a majority market share in its country of operations through various associates. The client now wants to expand its operations and wants to provide their products in the Middle East, Africa, the CIS countries and the South Asia Region.


Challenges

The primary objective of the client was to provide their products for selling and leasing in other countries. For this purpose they needed to set up their company at a location where they could set up a robust and reliable distribution network. Apart from this they had various other requirements with respect to their business and location as well. Some of the requirements they had were:

  • The client wanted to set up in a location where companies from their industry were present.
  • They wanted a location Where they would be able to minimize their logistics time with special importance given to on-site customs, major port with excellent connectivity by road and air to their target market.
  • Where they would not have customs duty on re-exports
  • Where they could have state of the art warehouse facilities
  • Where they would have 100% foreign ownership

Business Solution

The client approached us for assistance regarding this issue. We started by requesting and then analyzing their requirements. We understood that they wanted to maximize their distribution network and minimize their costs. Based on our analysis of the requirements we suggested JAFZA. JAFZA has over 20 multinational companies in industries, as well as several regional companies similar to the client, such as Aggreko, Alstom, ABB, Cummins, GE, etc. JAFZA is well known for being highly customer oriented and places significant emphasis on prompt customs clearance. At the same time, JAFZA’s Jebel Ali port is the largest man-made harbor in the world with Jebel Ali International Airport, one of the world’s largest cargo airports on the other side. JAFZA is also connected to the GCC countries by an extensive road network. It also met their remaining requirements of no custom duty on reexports, modern warehouse facilities and a 100% foreign ownership. In addition to fulfilling all their requirements, we suggested JAFZA as it is close to several new prime real estate developments offering their employees access to a good community with extensive healthcare and education network. This gives our client access to talented and most sought after employees. The clients agreed with our assessment and incorporated their company in Jebel Ali Free Zone.


Current Status

In 5 years, the company has expanded its operations to cover a large portion of the Middle East and Africa, and the CIS countries and now have over 25 employees. Their customers are highly satisfied with their delivery times which has generated a lot of goodwill for them. They were able to increase their business by more than twice their original 5 year business plan.

The client recently shared with us their requirements to expand further into South East Asia. We extended our services though the DFK network where they are in the process of incorporation.