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/ Lehning

Altios Leads Laboratoires Lehnings Acquisition of Brazilian Company

Altios helped us better understand the cultural aspects of expanding our presence in the market.

Stephane Lehning
President of Laboratoires Lehning
Challenge
  • Laboratoires Lehning based in France specialises in natural healthcare solutions for human and animal wellness.
  • Already succeeding worldwide through subsidiaries and partnerships, Laboratoires Lehning set its sights on Brazil to further its expansion efforts in the Americas and to strengthen their offering to the growing market of natural healthcare solutions for livestock.
  • Brazil is the second-largest beef producer in the world, with the U.S. being the largest. Due to public health concerns about the consequences of the use of antibiotics in livestock production, the market of natural substitutes is projected to grow in the coming years.
  • Brazil can provide sourcing of high-quality raw ingredients due to the country’s biodiversity.
  • To determine the best entry-point into the Brazilian market, the company looked to Altios due to their expertise in mergers and acquisitions.
Solution
  • Altios conducted a strategic analysis to determine the best investment direction for the company.

  • An M&A was ultimately the best strategy to meet Laboratoires Lehning’s goals,” said Didier Koch, Managing Director of Altios Brazil. “The strong alignment in values and culture not only made sense for a merger, but allowed Lehning to reach its goals faster by acquiring an experienced team, efficient manufacturing plants, an established customer base, and access to the extraordinary biodiversity of the Brazilian Amazon,” added Koch.

  • Laboratoires Lehning and Altios began negotiations with Apis Flora. Founded in 1982, Apis Flora specialises in healthcare products for humans and animals based on propolis, honey and medicinal plant extracts.

  • The acquisition provided Laboratoires Lehning access to Apis Flora’s three high-performance production facilities in Brazil, and the company’s innovative savoir-faire in honeybee-based products.

  • To ensure a smooth transition for both companies, Altios provided support during the negotiations and the post-acquisition phase of the agreement.

  • Maintaining employee support and goodwill were extremely important to Laboratoires Lehning during the negotiation phase. “Altios’ knowledge of the local culture helped us determine what was most important to the founders and employees of Apis Flora.

Result
    • Once the acquisition was completed, talent retention was a critically vital part of the acquisition’s success.
    • To further ensure success, Altios provided post-acquisition integration support services. This support included being the critical link between the Brazilian company and Laboratoires Lehning’s headquarters in France.
    • To ensure a smooth transition, Altios’ managing director of its office in Brazil co-managed the newly acquired entity to bridge the management teams of the parent company and Apis Flora.
    • Throughout the acquisition process, maintaining a dialogue which respected the cultural differences was essential and was one of the defining factors to the successful merger. “We learned the importance of team spirit and of working together for Brazilians. By being attentive to these important concerns, we were able to gain their trust,” continued Lehning.

    • The successful acquisition has provided to both entities a stronger global presence and expanded the market reach of their respective products.
    • Our collaboration with Lehning has recently been extended to Business Development in the United States with its subsidiary Phytosynthèse.

Learn more about Lehning: https://www.lehning.com

Company Profile

Founded in 1935

Annual Sales: €56M

International Sales: 50% (20 countries)

Industry: Natural healthcare solutions for human and animal wellness

Target country: Brazil

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February 6th, 2020

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Mirko Mottino, Managing Director for the Turin and Milan offices answers “Three Questions for a Director”.

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At the crossroads of civilization, Mexico finds itself in a favourable geographical position and doesn’t lack for arguments to entice investors and international groups

At the crossroads of civilization, Mexico finds itself in a favourable geographical position and doesn’t lack for arguments to entice investors and international groups. It is recognized for its workforce, competitiveness and immediate vicinity to world’s largest consumer market—the US—which creates the ideal mix for doing business. In fact, the United States is the country’s main commercial partner and receives some 80% of Mexico’s exports.

In 2016, Mexico ranked among the 15 largest world economies and benefitted from an over 2% growth rate, which is expected to continue in 2017. This growth is spurred largely by strong domestic demand and supported by credit expansion and a significant influx of expat workers.

Mexico’s economic landscape is made up of key industries, large international construction firms (Cemex), telecom companies (America Movil), agribusiness (Bimbo, Sigma alimentos), and agriculture (Gruma). These giants work alongside SMEs that, in contrast, have a much smaller presence on the international scene. That’s the economical challenge Mexico is facing while it strives to set up SMEs on an international scale.

Mexico’s industry gems: aeronautics and automotive

The Mexican automotive industry was set up before its aeronautics industry and attracts the world’s attention. Erwan L’Helguen, Managing Partner America Latina at Altios International, says as much: “In the automotive world, setting up in Mexico is a must. The market is no longer flowing towards Europe or Asia, but rather to North America in general—and Mexico in particular.” The world’s leading carmakers are there, as well as all the first-tier suppliers, with second- and third-tier suppliers making inroads. A complete logistics chain has been set up, creating a large reservoir of companies where firms, SME’s and VSBs work alongside one another. “The dynamic is powerful, expertise is plentiful and the workforce is very competitive,” says Mr. L’Helguen.

The aeronautics sector is still young, but it has remarkable growth potential, as states Altios International’s Managing Partner America Latina. “Over the last three years, the annual growth rate in this sector is about 15%.” The biggest players in the market are there, including Airbus, Bombardier and Safran. “These large businesses want to expand the sector’s logistics network—the demand is there—and we see a real willingness by authorities to invest in and welcome suppliers.” In fact, Mexico isn’t hiding its ambition to become the North American hub for the industry. The initiatives come from the state but also the private sector—like Safran, which financed a university that specializes in aeronautic jobs

Altios International in Mexico

Altios International has had a presence in Mexico since 2011, and we have a full portfolio of services and a network of experts at the fingertips of our Altios project manager—the client’s number one point of contact. Erwan L’Helguen describes how Altios International can adapt to its clients’ degree of internationalization. “We work alongside companies that want to set up in Mexico. We intervene for companies that don’t yet have the means to maximize their implantation strategy. We also intervene more and more for companies that are already in the market but want to consolidate their revenue by growing their customer portfolio through local structure or external growth.” The Altios International specialist also adds, “Take the auto example, for instance. We’re in a position to put our clients at the negotiation table with major players in the automotive industry. We can also simplify the implementation process by coordinating investment projects or managing final details such as welcoming ex-pats and their families.”

Opportunities to be seized

Erwan L’Helguen paints a global picture of the Mexican market. “The key to doing business here is to be present every day, close to clients, partners, suppliers. You have to keep in mind that Mexico has a Latin culture—proximity and the human aspect are fundamental.” Altios International’s advisory role and privileged position in Mexico are vital. “A foreign company has every opportunity to succeed in Mexico if they set up well and have the support they need to create their network. When these conditions are met, success will follow. Some clients have told us that Mexico will be their driving force!”

Some Figures

Population: 120 million
Currency: Peso
GDP (2015): $1.144 billion
Growth rate (2018): 2.4%
Capital: Ciudad de Mexico 20, 116, 842 inhabitants. Grand Mexico: 25M+ inhabitants
Main cities: Guadalajara (1.65M), Monterrey (1.5M), Ciudad Jerez (1.5 M), Puebla de Zaragoza (1.4M), Tijuana (1.38M)
Main clients: US (87% of exports), Canada (2%), Spain (1%)
Main suppliers: US (55% of imports), China (7%), Japan (5%)

Sources:

https://data.oecd.org/fr/mexique.htm#profile-development

http://www.diplomatie.gouv.fr/fr/dossiers-pays/mexique/

http://www.lemoci.com/fiche-pays/mexique/

http://www.populationlabs.com/Mexico_Population.asp

Doing Business in Italy

the italian market

Insights on the Italian market

Italy’s industrial base is dense and dynamic, comprising a network of 4 million SMBs that are able to adapt quickly and remain agile in times of change. These entrepreneurs are creative and innovative, and the technical labour force is extremely qualified in terms of knowledge and quality standards.

The Italian textile industry consists primarily of small- and medium-sized family businesses. Over 90% of industrial companies have fewer than 100 employees.

The luxury product market (haute couture, cars, gourmet foods)
represents a significant share of Italian economic activity, and Italy remains one of the main exporters of these types of goods.

More generally, Italy’s main industries are state-of-the-art machinery, motor vehicles, chemical products, pharmaceutical products, electric products, clothing, and fashion.

Altios in Italy

As soon as a company starts to have recurring commercial flows in Italy, the implementation of an HR and operational localization strategy must be imagined.

Mirko Mottino
Managing Director - ALTIOS Italy

With over 15 years of experience in the field, the Italian Altios team is based in Turin and in Milan. Altios also shares its premises with over a dozen businesses offering
flexible, expert services in order to quickly establish the company in Italy.

Marketing is quite regionalized and segmented in Italy, where culture varies by region. Knowledge of these differences is therefore essential and sets Altios apart—the company has supported more than 500 businesses to date by offering its clients business development, set-up, and investment services.

“In this market, design is very important,” said Mirko Mottino, Italy Director at Altios. He is referring to the luxury market, which plays an important role in Italy, but also to the aerospace, motorized and automobile engineering markets, which are currently expanding.

Mirko Mottino

In the field: market characteristics

Italian entrepreneurs greatly appreciate relationships and human interaction. For this reason, Altios puts structures in place that allow its
clients to be as close as possible to suppliers and potential partners.

If it’s possible, it’s crucial to be present in person,” said Mottino, who has advised foreign investors in Italy for over 15 years. “In order to be as close as possible, we encourage them to work directly with the manufacturer, without an intermediary.

Doing business in Italy

“India welcomes the world to explore economic
opportunities our nation has to offer. Guided by the mantra of Reform, Perform
and Transform, we are determined to further improve our rankings and scale
greater economic growth” says Prime Minister, Narendra Modi

According to World Bank figures for 2017, India has
become the world’s sixth largest economy. The current GDP has increased to 6.6
percent in 2017-18 and is expected to grow 7.3 percent in 2018-19. It is
further estimated to reach $6 trillion by FY27, thus making India the fifth
most attractive market for investments. The country’s Foreign Direct Investment
(FDI) inflows have reached $209 billion during April 2014 – December 2017 with
the maximum contribution coming from sectors such as services, computer
software and hardware, telecommunications, construction, trading and
automobiles.

The Indian government has taken certain initiatives
in order to facilitate “Ease of Doing Business in India”. With the
implementation of a new tax system called the Goods and Service Tax, or GST
(equivalent to French VAT) – India has become an increasingly tax compliant
society. To make India an investor friendly economy , the government has
also launched certain campaigns to spur economic development. This includes:

According to the International Monetary Fund, India
is projected to generate growth of 7.4% in 2018 and 7.8% in 2019, boosted by
household spending and the tax reform. 

Trade Statistics: According to the department of commerce, total exports in May 2018
were valued at  $28.86 billion compared to $24.01 billion during May 2017
exhibiting a positive growth of over 20%. Some of the major export
commodities include engineering goods, petroleum products, chemicals, drugs and
pharmaceuticals & cotton yarn/fabs/made-ups/, handloom products etc. Total
imports in May 2018 were valued at $43.48 billion compared to $37.86 billion
the previous year, thus registering a positive growth of 9.72%. Major commodities
of import with high growth include petroleum, crude & products, electronic
goods, machinery, electrical and non-electrical, coal, coke and briquettes,
organic and inorganic chemicals. Major trading partners include the EU, China,
United States and the United Arab Emirates.

Emerging Sectors

India has one of the fastest growing service
sectors in the world by becoming a major exporter of IT services, Business
Process Outsourcing (BPO) services, and software services with $154 billion in
revenue in FY 2017. And, it is forging ahead with changes to the
infrastructure, healthcare and automobile sectors with a significant
effort being made on green technology.

Defense and civil aviation are also expecting
significant expansion following an increase in the upper limit of foreign
direct investments (FDI) in defense to 49%. With the launch of the Digital
India
campaign, demand for technology related services such as constructing
a broadband infrastructure, creating identity solutions, payment systems, web or
mobile based delivery structures is also expected to increase.

ALTIOS India

ALTIOS International has been present in India
since 2008 and offers a complete portfolio of advisory and subsidiary
management services to clients from over 18 countries. With a local office in
Delhi backed by a highly seasoned team of consultants, engineers and finance
professionals, ALTIOS helps clients enter and succeed in the Indian market.

Madhav Raina-Thapan, Managing Director, ALTIOS
India, describes how the cultural difference and governance system makes doing
business in India relatively more complex than in the West. On top of this,
consumer price sensitivity makes it even more challenging for companies from
the west to adapt to the needs of the market.

“With an experience gained over the many years of
assisting Western clients on the market, ALTIOS India has been able to create
its own niche service offering for the market. We have been able to assist
clients from initial market entry assessments to
end-to-end investment advisory and execution on greenfield/brownfield projects.

With major policy overhauling carried out in last
few years and recent thrust being given to Make in India initiatives,
the country is set to attract investors who not only see India as a potential
market but also as a manufacturing base for other Asian markets.

Some Figures

Population : 1.3 bn inhabitants
Capital: New Delhi
GDP (2018): $2.848 tn
Currency: Indian Rupee (INR)
Unemployment: 8.8% (2017)

Sources

India Brand Equity Foundation (IBEF) https://www.ibef.org/economy/indian-economy-overview

Ministry of Commerce and Industry
http://commerce.gov.in/#

UK India Business Council
https://www.ukibc.com/india-guide/why-india/emerging-sectors/

Germany has long represented a key business center as the largest economy in Europe and the fourth largest in the world.

Germany has long represented a key business center as the largest economy in Europe and the fourth largest in the world. Home to 82 million inhabitants with approximately 4.5% unemployment, the country offers stability, a quality infrastructure and talent pool, and open business policies. This makes Germany a welcoming prospect for business owners looking to expand, but this same high standard adds to the competition. Those looking to do business in Germany should be prepared to offer new and innovative products and solutions to stand out in this power-house economy.

In 2017, Germany accounted for over a quarter of the euro area economy according to the IMF. The robust growth of the country has allowed for opportunity around some of the most cutting-edge industries such as biotechnology, electric vehicles and transportation, green and environmentally friendly tech, and digital transformation services, as well as lifestyle products like food and cosmetics. At a nearly full employment rate, consumers and business owners alike can be picky about where they spend their money.  Reflective of consumer trends worldwide, shoppers are considering if a business’s values align with their own when making purchasing decisions. Customer service and relationships have long been values of the German culture, and this is only heightened by the competitive market.

“The Germans are very disciplined and almost rigid in their business methods, contacts are direct, if you have an appointment, you have to react very quickly,” said Murielle Taisne, Altios Germany Director. Altios helps clients navigate these local customs in addition to creating an entry strategy. Germany offers fairly business-friendly policies and laws, but there is still the inclination to local businesses as with most countries. In a tight market it is important to have these connections or be accompanied by a German who knows the business culture.

Establishing this local network and having local talent for your business is an important first step. Due to the low unemployment rate, competition for top talent is high. Businesses are offering in-office perks, family-friendly benefits, flexible and work-from-home policies, and other attractive benefits to try to set themselves apart. This employer branding is important for businesses to understand what is most important to the German people. In addition to advising companies on their employee offering, Altios services extend beyond recruiting to benefit both the employee and employer during the transition time. This can set a business apart for a candidate that values a smooth onboarding process, and a partner that has their long-term goals in mind at all times.

Though competing for top talent can be challenging, Germany is looking to continue to improve the talent pool nationwide in the STEM or MINT sector (Mathematics, Informatics, Technology, Sciences) as it is locally known. The programs, particularly aimed at students and women, will help prevent any slow-down in business momentum due to a lack of skilled employees. These government policies with an eye towards the skill and services of the future, present many exciting opportunities for growing businesses.

“In Germany you have to be persistent, patient, well prepared, perfect the quality of products and services, and react quickly,” Taisne said.

In addition to these key success factors, Germany values creativity and agility, making it a perfect fit for SME’s and start-ups. Altios helps clients to reveal their innovation, with the backing of a long-term partner. The competition of the German economy does come with some risk, but those willing to go above and beyond, and enter the market with a full understanding of what’s required, will reap the rewards throughout the region.

Some Figures 

Population : 82 million inhabitants 
Capital: Berlin
GDP (2018): $3.997 tn 
Currency: Euro (EU) 
Unemployment: 4.5% 

China is changing. Between 1978 and 2015, the country pulled itself out of poverty and rose to become the second most economically powerful country in the world.

China is changing. Between 1978 and 2015, the country pulled itself out of poverty and rose to become the second most economically powerful country in the world. At the same time, according to the World Bank, China’s share in the world GDP has gone from under 4% to 18%. Its exports in the global economy have also risen from 4.3% in 2001 to over 13.8% in 2016.

In 2017, China’s GDP was set to grow 6.9%, but the country also faced the challenge of an economic transition—going from a model focused on production and exportation to a more long-term approach based on consumption and services.

Today, the Chinese market is more competitive than ever while remaining accessible in a wide range of sectors. In 2016, China was ranked third of all countries to attract the most foreign direct investment (FDI). Since last June, Beijing has reduced the list of restrictions on FDI in free-trade zones. However, French investment in China does not yet feature amongst the top 10 foreign countries, such as Germany, the UK, and Luxembourg. The market share for French companies, which was 1.6% in 2016, remains three times less than that of Germany. Both countries have many opportunities left to explore, especially in sectors like renewable energy, waste management, consumption, hi-tech, health, tourism, culture, and more.

The middle class continues to grown in China. In fact, China’s appetite for authentic, quality foreign products is growing, and western companies have reputable expertise in these domains. In particular, China’s cross-border eCommerce has risen 34% every year for the last 5 years, and is set to increase a further 16% by 2020. In 2017, on Singles’ Day (November 11), Alibaba calculated over $25 billion in revenue for a single day.

The growing Chinese market has become a critical issue for foreign companies of all types and sizes. But developing one’s business on the market can be an insurmountable challenge for many western companies, many of which aren’t taking advantage of local opportunities. ALTIOS International can provide all the tools needed thanks to our local team and regional expertise—key in helping make your investment projects in China a success.

Emmanuel Macron headed to China in early January 2018. He is the first European leader to visit the area since the 19th National Congress of the Communist Party of China—symbolizing the start of a new strategic partnership between the two countries. Despite concerns about a trade deficit for France in relation to China, as well as protectionism in the Chinese, European and French markets, both countries have mutual interests and many opportunities to explore together.

France remains one of Chinese tourists’ dream destinations, thanks to its “romantic” image and many attractions. Chinese tourists are more apt to travel individually in search of unique experiences. In fact, over 2 million head every year to France, whose goal is to attract 5 million by 2020.

As well, Chinese investments in France need to be seen as an opportunity as opposed to a threat. These investments have helped to finance projects, stimulate the market and create jobs in France, including in companies like Huawei, Haier, Fosun, Lenovo, and Bluestar. Chinese companies must adapt to local contexts, whether these are regulatory, economic or cultural. They also require guidance and advice from the French, without prejudice or undue fear.