"Establishing Industrial Partnership and Offset Programs"
- There is tremendous value for many countries to consider establishing a comprehensive Industrial Partnership (IP) and Offset program that will deliver substantial economic benefits to the people of those countries for many years to come.
- Many nations throughout the world have successfully established and benefited from similar initiatives.
02. WHY AN INDUSTRIAL PARTNERSHIP AND OFFSET PROGRAM?
To contribute to the industrial and economic base of any country through technological advancement, thereby broadening its technological capabilities, improving quality, expanding markets, and enhancing employment.
- Offsets can be used in both commercial and defense sectors.
- Economic benefits to those countries will be in the form of job creation, investment in local industry, increased exports, technology transfer, co-production and Industrial Participation.
- Provides for a transparent vehicle for multinationals to give substantive economic benefits back to countries.
03. WHAT IS INDUSTRIAL PARTICIPATION
- Industrial Participation (IP) is a policy that aims to stimulate employment, create sustainable new jobs, and to focus on developing and enriching the small / medium-sized enterprises.
- IP opportunities arise when foreign suppliers who sell their "big ticket" products, projects, services, and technologies to the government and state sponsored enterprises are contractually required to invest, joint venture, pursue co- production, and buy products back from those countries as a requirement to being awarded supply contracts from those countries.
04. WHO HAS INDUSTRIAL PARTICIPATION AND OFFSET PROGRAMS
- Over ninety nations around the globe have established and benefited from Industrial Participation and Offset programs Examples are: South Africa, Poland, South Korea, Greece, Germany, Czech Republic, Denmark, Finland, Sweden Indonesia, Taiwan, UK, India, Italy, Israel, Thailand, Australia,, Austria, Hungary, Lithuania, Poland, Romania,, Turkey, Saudi Arabia, UAE, and Kuwait.
05. DIRECT OFFSETS VERSUS INDIRECT OFFSETS
- Direct Offsets are those activities which are tied to the actual product being sold into the country. The supplier commits to direct purchases and production activities in the buyer's country. Co- production is a prime example of direct offset.
- Indirect Offsets are those activities which are "not " related to the product being sold in any way but are performed commercially as a consequence of fulfillment of the obligation. Indirect Offset Programs could include investments and joint ventures in local industries which are priority sectors for any country.
06. BENEFITS FROM INDUSTRIAL PARTICIPATION AND OFFSET PROGRAMS
- Many countries have enjoyed tremendous economic development and real economic benefits across a broad spectrum of industry sectors. Investments generated through the IP requirements have enabled foreign investors to add value to their local supply chains and guarantee the quality and consistency of local supply, while still making a profit in the process. For the economy of any country, the benefits would be considerable.
- Corporations will rarely (if ever) volunteer to establish an IP program, but when contractually required to do so, they create remarkable commercial programs that deliver true economic benefits for generations to come.
- The benefits from these IP programs can be commercial industrial development benefits, and/or social need programs such as establishment of new schools, hospitals, clinics, nursing programs, etc. etc.
- The benefits can also be delivered in the form of financing support, and deploying the resources that the multinationals can deliver through their international networks and channels of distribution.
- Dozens of case studies can be presented that evidence the success of other countries IP programs.
07. YOUR PARTNER IN ESTABLISHING IP AND OFFSET PROGRAMS
- TRUSA is the recognized global leader in Offset, Countertrade, and Industrial Participation activities. Trusa's management team has worked with many foreign governments and multi-national companies to create and implement very successful IP programs. Trusa's impressive track-record in delivering IP programs across a broad spectrum of countries and industries can deliver billions of dollars of economic benefits to the countries in the decades to come.
A sampling of Trusa's Client Relationships who work IP & Offset Programs
08. THE OBJECTIVES
We would work with our counterparts to establish objectives to maximize the delivery of true economic benefits for the country.
- To derive the maximum additional value in local / regional and federal procurement operations
- To reduce both regional and federal capital expenditure
- To ensure smooth implementation of national goals
- Governed by a locally based and managed oversight body
- Incorporate a "Best Practices" approach
09. ACTION POINTS TO MOVE THE COUNTRY IP PROGRAM FORWARD
- Obtain a clear mandate from the senior levels of the government to establish an Industrial Partnership program, that will contractually require multinationals to perform IP/Offset programs. That mandate will also provide for penalties for non-performance.
- Once the mandate is issued, Trusa would bring in practitioners & experts that have successfully run IP programs for their respective governments and multinationals. These experts would then help train, guide and share their respective successes and lessons learned.