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Manufacturing set-up for a US-based medical devices manufacturer

Engagement: SKP was engaged by a leading US-based medical devices company to prepare a business plan for setting up manufacturing operations in India. The client was planning to set up a manufacturing facility in north India. The plant was an addition to their existing facilities in the US and Europe and the company was setting up a new plant after almost three decades. Hence, it was crucial for the company to be absolutely sure of its decision before going ahead with the venture. The client required key inputs for the decision-making process. At the same time, they wanted an Indian partner who could also assist in the implementation of their overall India entry strategy.

Preliminary Mandate:

  • Business set-up services, project accounting and tax advisory
  • Complete business and regulatory advisory – cum- setup support for their Greenfield manufacturing plans in India

Solution/Value Delivered
SKP worked as an implementation partner for the overall project, assisting in the planning and execution phases in the following key aspects:

  • Business Plan and Capital Structuring: Our team worked closely with the company’s management team for a period of four months to provide a detailed business plan. We also recommended capital structuring options and ways to fund the project. The advice provided at this stage not only gave the company confidence but assurance that the objectives for their Indian operations could be achieved and the venture could be successful. The document was so thorough that it was also used later for budgeting and monitoring expenses until the project was established.
  • Project Support: Initially, we provided regulatory support for the project in terms of registrations and approvals, such as infrastructure registrations and bonding of facilities required as an Export Oriented Unit. We also reviewed all the contracts the company entered into with various contractors in order to provide feedback from a commercial perspective and to spot any tax planning opportunities in advance. During the project, we assisted in dealing with contractors for the release of funds, cost and time overruns, vendor payments and invoice management.
  • Tax Advisory: SKP also provided crucial advisory with respect to tax implications and compliances during various stages of the project. It mainly included setting up their inter-company transfer pricing, preparing detailed manuals for indirect taxes as the provisions are fairly detailed and complex for units availing certain exemptions and benefits, managing cash flows in the project phase and providing feedback to the company’s treasury team, expenditure review from an accounting and tax standpoint for capitalisation and development of a fixed asset register according to Indian and US GAAP.

The facility was set up in record time in India.