Southeast Asia entry roadmap for an Italian corrugated board machinery manufacturer

The client, an Italian manufacturer of machinery for the corrugated board industry, has machines installed across Southeast Asia and ships spare parts to the region from its Asian headquarters in China and from Europe.

To grow in the region and give customers faster service, the client wanted a local after-sales hub. Management needed to know which country to choose, how to set up the people and the warehouse, and what it would cost.

• Five countries to compare on the same terms: Vietnam, Indonesia, Thailand, Malaysia and Singapore
• Service engineers based in one country who can travel to customers in the rest of the region at short notice
• A warehouse setup that gets spare parts to customers quickly
• A legal setup that lets the client start fast and grow step by step
• Costs that stay competitive

APAC Advantage built the client's Southeast Asia entry roadmap. The work covered the choice of country, how to employ and move service engineers across the region, the warehouse, the legal entity, a cost model and the steps to get started.

Agreed the criteria with the client

Together with the client we set 12 criteria and agreed how much each one counts. Service level carried 60% of the weight and cost and scale 40%.

Compared the five countries

We ranked each country on the client's installed base, shipping time to the other markets, customs clearance, duties on spare parts, warehouse options, the pool of engineers, how easily engineers can travel in the region, and the cost of running a local company. Indonesia and Vietnam made the shortlist.

Chose the hub based on growth

The client's priority is selling new machines, so we ran a second ranking with more weight on market growth. On that view Vietnam came out as the best base for the region.

Planned the people setup

We worked out how to hire local engineers, how they can travel to Indonesia, Thailand and other markets on short notice, and how Chinese engineers can come in to support. This included visas, work permits and the option to start with staff employed through a local partner before the client has its own company.

Planned the warehouse and legal entity

We compared warehouse options, from a shared space with a logistics provider to a unit of the client's own. We also compared entity types and mapped each step, timeline and tax point for setting up a company in Vietnam and Indonesia.

Built a two-year cost model

A month-by-month model covered a pilot year and a full setup year, with low, medium and high cases for staff, warehouse and company costs.

• Vietnam recommended as the regional service hub, serving Indonesia and Thailand
• A clear plan for hiring service engineers and moving them across the region
• A warehouse plan that starts small and grows with demand
• A legal entity plan with each step and timeline
• A two-year cost model with three cases
• An entry roadmap presented to the client's group leadership