Kreston Reeves has advised AxFlow UK on its acquisition of Moody Direct. AxFlow is one of the UK’s leading providers of pumps, valves, mixers and heat exchangers in the fluid handling sector and is part of the Axel Johnson AB group with operations across 26 European countries. Moody Direct is one of the country’s foremost suppliers of packaging solutions to the dairy, food and beverage industries and the chemical and pharmaceutical industries.
Craig Dallender said: “It was a privilege to work alongside Diane and the AxFlow team on this acquisition. Kreston Reeves has built a strong buy-side corporate finance team, helping businesses grow through strategic acquisition. We are thrilled to have played a part in the continued growth of AxFlow.”
Neil Langdown, Managing Director of AxFlow UK said: “We are thrilled to welcome Moody to the AxFlow family. Its expertise in hygienic sales and servicing and reputation for best-in-class customer service will strengthen AxFlow’s existing position in the UK. Moreover, this will enhance our onsite service capability and enable us to offer our customers a comprehensive service offering for homogenisers, separators and plate heat exchangers.“
Diane Booth, Finance & Operations Director at AxFlow said: “I would like to thank the team at Kreston Reeves. Their advice has been timely, insightful and critical to get this deal done.”
Ken Wildm Director of Moody, said: “Moody’s success has been built on technical expertise and a commitment to customer satisfaction. Joining forces with AxFlow UK not only strengthens our ability to serve customers in our core segments of F&B and Dairy but also opens up new avenues for growth, particularly in the processing industries.”
If you are interested in doing business with Kreston Global, contact us here.
Veronica Quintana is a Director at CBIZ and CBIZ CPAs, specialising in providing services to companies in agriculture, construction, manufacturing, real estate, restaurants, and professional services, including government contractors. She leads the CBIZ Latino-Owned Business Service Team, created to support Latino business owners as they grow, innovate, and transition their businesses to the next generation. With over 25 years of experience at CBIZ, Veronica has managed bookkeeping and tax clients in the Oxnard office, overseeing tax and accounting services for commercial entities. She is deeply involved in her community and serves on the boards of several nonprofit organisations. Veronica has been recognised for her contributions, winning the Latino Business Awards “Professional Services” category 2012.
US firms turn to nearshoring for labour
October 15, 2024
Nearshoring, particularly in Mexico, is becoming an increasingly popular answer for US firms who are struggling with a labour shortage. US companies are looking south of the border as they search for new ways to stay profitable. A big push to nearshore in Mexico comes from the labour market, but Veronica Quintana, Director at CBIZ, finds that strong cultural links between Mexico and America are also adding to the allure.
“We increasingly have more clients coming to us looking for advice on nearshoring,” she said. ‘Some still have family in Mexico and they want to invest in their hometowns. I have seen an uptick in US businesses wanting to invest in tequila and spirits. However, US firms across the board are finding it difficult to be profitable due to the rising costs of materials and labour. They have mentioned that perhaps it is best to invest in Mexico, where the labour market is cost-efficient and highly motivated.’
Labour shortages in the US and the push for nearshoring
There is a national labour shortage in the US. Many baby boomers are retiring, and others left the workforce during the pandemic. Offshoring can look different for each company, depending on the industry and their reasons for offshoring.
‘Companies are mostly looking to reduce or optimise costs, access specialised skills, staff augmentation, and effective scaling,’ said Quintana. ‘Offshore employees are often more flexible, which is important if business conditions change, and they need to downsize quickly and efficiently.’
Mexico’s skilled workforce and competitive advantage
Mexico has a skilled workforce with lower labour costs, and Quintana pointed out that this is especially true in the manufacturing industry.
‘The close proximity to the US also makes it easier to transport goods and materials quickly and at a cost savings,’ she said. ‘The United States-Mexico-Canada Agreement (USMCA) provides several benefits, such as reducing or eliminating tariffs, US firms turn to nearshoring for labour streamlines customs procedures, and provides market access to a large consumer base.
India as a growing offshore destination
India is another country that has seen an increase in offshoring. They also have a talented labour force, especially in the business field, and CBIZ has personal experience here that it can draw on to help clients.
‘We have had success offshoring some our income tax preparation to India,’ said Quintana. ‘We have worked with their team for several years now, trained them on our processes, software and procedures. They do good quality work, and that gives us the confidence and assurance that offshoring has been a success.’
Rising Appeal of Nearshoring
The pandemic and growing instability in the world’s geopolitics has also pushed nearshoring up the list of priorities for US companies. The disruption to supply chains during the pandemic made the thought of investing in manufacturing sites closer to customers much more attractive. More recently, Russia’s invasion of Ukraine and growing tensions between Washington and Beijing have made nearshoring even more of a priority.
The economic impact of nearshoring on Mexico
Over the past few years, nearshoring from the US has created a boom in Mexico. US imports from Mexico totalled US $455 billion in 2022, up nearly 19% from the previous year and up 64% from 2012, according to the United States Census Bureau. At the same time, the share of Mexico’s imports from China went from 1% in 1994 to 20% in 2022 according to a recent study by academics Laura Alfaro and Davin Chor.
New manufacturing plants could add an additional 3% to the country’s GDP over the next five years as well as over 1 million jobs, according to a recent study by Deloitte.
New manufacturing plants could add an additional 3% to the country’s GDP over the next five years as well as over 1 million jobs, according to a recent study by Deloitte. The Mexican government is cashing in by making the country’s tax laws more favourable to foreign companies. For instance, as of October 2023, international electric vehicle manufacturers could claim an 86% tax deduction on investments in the country.
Challenges for investors
US investors have been made nervous, however, by a bill of judiciary reforms that has been passed by the Mexican government, that makes Mexico the first country to allow judges to be elected rather than appointed.
Several big-name investors have come out against the reforms, including US investment banking giant Morgan Stanley. More recently, Julius Baer warned that rating agencies could change Mexico’s creditworthiness as soon as next year if the judicial reform is approved. But Mexico’s outgoing president Andrés Manuel López Obrador has hailed the approval of controversial reforms, saying they would be an “example to the world”.
Obrador who left office on October 1, 2024, accuses the current judicial system of serving the interests of the political and economic elite. ‘It’s very important to end corruption and impunity,’ he said.
Future prospects for US firms in Mexico
Investors will be watching the market closely, as energy and tax reforms would stall the nearshoring boom if they are not followed through. But US firms seem to be happy to be moving South, for now.
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Najat Moughil
Partner at Exco ACDEN
Najat Moughil is a seasoned audit and consulting specialist, known for her expertise in consolidating accounts, implementing IFRS standards, and optimising financial processes. With a strong focus on enhancing internal controls and risk management, she excels in streamlining operations and meeting closing deadlines efficiently. Moughil also offers valuable support in project management, business ownership, and change management initiatives.
Morocco: A bold economic agenda
May 1, 2024
In recent years, Morocco has undergone significant transformations, positioning itself as a formidable player on the global stage. This strategic repositioning has not only altered perceptions of the North African nation but has also greatly influenced the landscape for doing business within its borders. Najat Moughil, Partner at Exco ACDEN discusses Morocco’s emergence as a global player has ushered in a wave of opportunities.
Morocco’s economic landscape: Europe and Africa
Positioned at the crossroads of Europe and Africa, Morocco plays a pivotal role in linking the economies of both continents, fostering trade, investment, and collaboration in various sectors. Morocco is member of the African Union and the leading investor in West Africa. Major Moroccan institutions such as Attijariwafa Bank, Bank of Africa, and the OCP Group, a leading player in phosphate and fertiliser production, now exert significant influence in Africa.
Concerning Europe, Moroccan exports are primarily aimed at the Old Continent, comprising approximately two-thirds of the country’s total exports. Casablanca Finance City, an economic hub hosting over 200 international companies, is crucial in Morocco’s role as a bridge between Europe and Africa. Thanks to its geographical location and political stability, strong and modern infrastructures, the implementation of ambitious sectoral strategies, highspeed industrialisation, the development of green energies and the signing of several free trade agreements with the world’s major economic players, Morocco offers a favorable environment for investing in various sectors: aeronautics, automotive, textiles, leather, agri-food and aggrotech, electronics, tourism, information technology, infrastructure and even energy.
Strategies for industrial growth
In order to strength its position as logistic hub, Morocco made important investments in logistics projects, in ports and railways. In the automotive and aeronautical sectors, Morocco’s logistical role has already grown and investments in production facilities and logistical solutions have been made. Morocco’s automotive industry, aircraft parts manufacturing and mining are traditional industries that offer important export opportunities.
Morocco is also moving forward with various policies to unleash the potential of the private sector, including reform of the vast network of public enterprises and a revision of the investment charter.
Economic impacts and infrastructural upgrades
The hosting of the 2030 World Cup will provide Morocco with a unique opportunity to extend its influence beyond the continents of Africa and Europe, as the tournament could inject up to US$ 1.2 billion into the Moroccan economy. In preparation, the country plans extensive upgrades to stadiums and infrastructure, aiming to attract investments through incentives. Tourism is also expected to boom. Banks will benefit from increased infrastructure financing, while the telecoms sector will see higher traffic and investments in 5G technology. Despite the costs, the World Cup offers Morocco a lucrative return on investment and a lasting national legacy. Such a robust economic agenda requires the implementation of complementary social reforms to ensure its benefits are equitably distributed and accessible.
Morocco’s strategic social policies
Amidst efforts to fortify businesses, a parallel consideration arises for initiatives aimed at enhancing the welfare and security of Moroccan households. The efforts have so far focused on the social sectors, with a landmark initiative to expand access to national health insurance and family allowance systems.
In recent months, the Moroccan government has officially launched the registration process for the Direct Social Support program. This program is devised to offer direct aid to families, particularly those in need, including school-age children, children with disabilities, newborns, economically vulnerable families, and those supporting elderly individuals. The program’s aim to improve socioeconomic conditions will foster economic stability, benefitting businesses operating in the country.
The Moroccan authorities remain committed to an ambitious program of structural reforms designed to put Morocco on a more solid and equitable growth path.
Morocco’s sustainable journey: Leading in renewables and environmental initiatives
The government’s commitment to social welfare is paralleled by its ambitious environmental agenda. Just as the Direct Social Support program aims to uplift Moroccan households, the “Morocco Offer” seeks to elevate the country’s standing in the renewable energy sector, thereby securing a sustainable future for all its citizens. On 11 March 2024, the Moroccan government made an official announcement unveiling the “Morocco Offer,” aimed at nurturing the growth of the green hydrogen sector. Prime Minister released a circular outlining a framework of incentives and assistance for potential project developers. This proposition targets investors keen on manufacturing green hydrogen and its byproducts and has attracted approximately a hundred domestic and international investors.
Renewable energy sector advancements
Morocco possesses significant potential for advancing its renewable energy sector, thanks to its abundance of wind and solar energy resources. With the world’s largest photovoltaic plant already in operation, the North African nation is committed to swiftly reducing its carbon footprint. Furthermore, prominent Moroccan companies such as OCP Group, demonstrate remarkable commitment to integrating renewable sources of water and energy into their production processes.
Morocco’s sustainable goals
The alternative energies, energy efficiency and the circular economy are becoming the most attractive sectors in Morocco. In 2030, the country aims to reduce its energy consumption by 15% and to reach 52% of renewables in its power capacity.
Morocco’s strategic repositioning as a global player has significantly transformed its business landscape, attracting an influx of international investors. With many projects in progress, such as the gas pipeline between Nigeria and Morocco, the country is poised to become an even more significant player on the global stage.
If you would like to speak to one of our experts in Morocco, please get in touch.
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Peschaud, France, Mozambique
March 2, 2023
Peschaud International specialises in oilfield logistics services in extreme conditions and environments (rivers, lagoons, deserts, swamps). Specialising in rig moves since 1956, Peschaud International is providing its added value in all regions where climatic or geographic conditions make prospecting particularly difficult to operate. The company aims to provide all-inclusive solutions, including a qualified workforce and specialized equipment to resolve all transport, lifting, handling and lodging matters in remote areas.
Peschaud has operated for over 70 years in African countries such as Gabon, Yemen, Madagascar, Sudan, and other difficult areas such as Chad, Congo, Myanmar, Tanzania, and also in the U.A.E. Peschaud owns a large fleet of floating equipment such as crew boats, landing crafts, barges, and a large fleet of onshore logistics equipment across the African continent. Most recently, Peschaud International created a Maritime entity specialising in offshore solutions and has acquired a shipyard in South Africa “Via Maris” where vessels are being internally designed, built and operated.
Kreston provides audit services for Peschaud through our French firm, Kreston Groupe Conseil Union, in Paris, led by Ali Smaili, and for its two subsidiaries in Mozambique which also require statutory auditing of their Financial Statements. Kreston Mozambique was invited to submit a proposal to audit the two subsidiaries – Peschaud Mozambique and Sociedade Moçambina de Cabotagem “SMC vi” our French firm, which was successful – we now also handle their corporate tax matters.
Kreston Global firm, Kreston John & Gan, has supported their client ECA Integrated Solution Berhad to achieve IPO on the Malaysian market.
The ACE Market is a sponsor-driven market created for companies with growth prospects. ECA provides integrated production systems and automated machinery for the automated manufacturing industry. In addition, the business serves clients globally and offers integrated assemblies and mechanical test-handling equipment.
The Kreston Global partner in charge of this success is Declan Yong, pictured second from the left. Declan is an expert in auditing, including auditing several publicly traded companies and multinational enterprises with operations in various industries, including plantations, real estate development, manufacturing, hotels, forestry, information technology, and others.
In addition to audit engagements, he has contributed significantly to numerous corporate and special assignments, offering a wide range of transaction support services, including financial due diligence review, review of financial projections, forensic accounting, business valuation, and reporting accountant for initial public offerings, reverse takeovers, private debt securities, and other corporate restructuring plans. These skills have all contributed to the firms IPO success in the Malaysian market.
“We are delighted to be the business solution partner of ECA and help them achieve their business goals” -Declan Yong
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Orica, Burkina Faso, Africa
March 16, 2022
Exco CIECAM has been working for Orica in Burkina Faso since 2019. Orica is one of the world’s largest providers of commercial explosives and blasting systems to the mining, quarrying, oil and gas sector.
Exco CIECAM provides a range of accounting services, including bookkeeping; legal advice such as employment and trade legislative guidance; employment tax advice including payroll tax declarations and social security contributions; tax compliance and preparation of financial statements; Company Secretarial and management accounts. This enables Orica’s finance team to focus on more strategic financial concerns. We would like to sincerely thank the firm for its remarkable assistance and unfailing support in our collaboration to date.
Aboubakar Sidiki KONATE Territory Manager of Orica
The two new members are now both group leaders in their e-teams, Kreston Egypt now specialising in individuals moving in or out of Cairo and McLean Delmo Bentleys now responsible for the same in Melbourne.
The two firms are working with our two global mobility partners; Expatland, who co-ordinate the e-teams all around the world, offering one-stop service, organising everything from expatriate tax to finding a school, for their clients. andHarmony Relocation, a global relocation expert.
If you are moving abroad or looking to move staff overseas, the Kreston Global mobility network can offer tax advice and co-ordinate all other services, from organising a visa to moving your house contents to another country.
Learn more about our network and how we can help you and your employees move country.
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Kreston Menon launches latest investment guide for ‘Doing Business in Dubai’
Dubai-based member firm, Kreston Menon, has launched the seventh and latest edition of ‘Doing Business in Dubai’, a guide to investment in Dubai, UAE.
The publication was recently launched by His Highness Sheikh Ahmed Bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority, Chairman of Dubai Airports, Chairman and Chief Executive of Emirates Airline and Group, and Kreston Menon partners, Raju Menon, Chairman and Managing Partner, Kreston Menon and Sudhir Kumar, Senior Partner and Head of Corporate Communications. The handbook is approved by the Business Registration and Licensing Department of the Dubai economy.
The publication has been celebrated in the press for raising the profile of Dubai, its free zones and offers a comprehensive understanding of the setting up process of Dubai International Financial Centre (DIFC) and on Nasdaq Dubai which allows companies to benefit from a unique investor pool that combines regional and international wealth. The guide is a great resource for start-up businesses, looking to benefit from the various support and incubation programmes provided by Dubai.
‘Doing Business in Dubai’ highlights the competitive start-up ecosystem of Dubai and acts as a guide for the innovative and enterprising youth from all over the world, as the book emphasizes on the various Startup Support initiatives and Business Incubation and Acceleration facilities provided by Dubai.
The book provides a complete overview of the incorporation process in the Mainland and Free Zones of Dubai, and helps the investor have clear understanding of the costs, impacts and benefits of each jurisdiction on his business. It also offers guidance on setting up in the Dubai International Finance Centre, and on NASDAQ Dubai, giving access to a unique investor pool.
The handbook gives insight into the decisive economic measures and new amendments to the residency and investment legislation initiated by the leadership of UAE which has stimulated the flow of foreign investments into the country. 30, 000 copies have been distributed around the region, including banks and high profile business events, such as the 2020 Expo in Dubai.
Lion Cashmere Midco owns textile giant the DMC Group which includes Sirdar Group Ltd (Tilsatec Ltd and Sirdar Holdings Ltd), Wool and the Gang and Mouliné & Co SAS (DMC SAS) as well as the Rowan brand.
The DMC Group’s main business is the manufacture and distribution of yarn and embroidery products while it also makes high quality technical yarns for cut and thermal resistant gloves. It employs more than 440 people across seven sites and its principal global sales are in Europe, the US and Asia.
Following a restructure and change in ownership in 2019, the group was faced with a reporting issue, particularly with providing a full-year comparative because the takeover was in early February 19. There was also Purchase Price Agreement (PPA) work to be carried out as well as the tax deductibility of the restructuring cost.
Kreston Global UK member firm, Kreston Reeves, was asked to do the work with Corporate Manager, Sean Rodwell, leading the team. They put together Pro-Forma 12 months’ results by consolidation 41 days result (pre-sale) and the rest of the year results so meaningful full-year results could be achieved. The PPA work was also completed and made compliant. Corporate Tax Manager, Mark Heath, provided professional advice on tax deductibility to ensure that the group could benefit from the maximum deductions available.
Kay Ahmed, (Group FC), said: “I have always found Sean and Mark to be very professional, honest, and helpful. Their advice is based on facts and is compliant with current regulations. I will not hesitate to recommend Kreston Reeves to anyone for their accounting, finance and reporting needs.”
Sean Rodwell commented: “We were very pleased to be able to help the company complete all the necessary requirements during such a major change for them. We look forward to continuing our long-term relationship with the management team and to the company’s future growth.”
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LonAgro, Mozambique
July 10, 2021
The Lonrho Machinery Group specialises in selling capital investment goods and after markets services in eight countries through the LonAgro brand. LonAgro are the official dealer and service agents for several international machinery brands in; Angola, Burundi, Malawi, Mozambique, Rwanda, South Sudan and Tanzania, together with a joint venture in Ethiopia.
Our key brands are John Deere and BELL and our focus is on providing world class machinery and after market support to the agriculture, construction, forestry and mining sectors.
LonAgro Mozambique wanted to increase its share capital and instructed Kreston Mozambique to assist them on this. Led by Dev Pydannah, Kreston Mozambique set up close monitoring with the relevant authorities for the registration of share capital increase which was achieved successfully.
Kreston Mozambique is auditor for LonAgro Mozambique and LonAgro Angola, as well as being auditors for Lonrho’s IT solutions subsidiary Bytes & Pieces Lda. We also advise them on income tax assessment and general tax matters.
Edmundo Chau Finance Manager of LonAgro Mozambique, said: “Kreston have been our advisors for 4 years now and we couldn’t be happier and more confident about our decisions on legal, tax and accounting matters. Their expertise and experience have been invaluable to our growth in the last years and give us peace of mind that we continue making the best decisions for our business.”
Dev Pydannah at Kreston Mozambique commented: “We have a strong relationship with Lonrho and were ideally placed to help them on this matter. This successful outcome demonstrates the strength and reach of the Kreston Global network, and we look forward to helping them further in the future.”
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Conductix-Wampfler, Germany
July 2, 2021
Conductix-Wampfler is a world leader in the design and manufacture of efficient energy and data transmission systems for all types of mobile equipment and machinery. They work with some of the world’s largest material handling, automation and mass transit customers.
They have a presence in more than 50 countries and needed a timesaving and streamlined tax compliance system to help its global business to fulfil the local accounting and tax requirements. The management team knew they needed professional support and advice to achieve this and called their contacts at Kreston Bansbach.
We analysed the scope of their international network to identify the precise range of services that would best suit their business – we looked at everything from tax advice to bookkeeping. We then put together an expert team to deliver everything they needed. A key member of this team was the senior manager in charge – he needed the international experience and gravitas to ensure the new financial system delivered globally.
Thomas Schlisske, Kreston Bansbach senior manager and team lead for Conductix-Wampfler, explained their role:
“We delivered a new system that was aimed at consolidating and rationalising their existing procedures including the involvement of professional advisors.”
The Bansbach team also aimed to deliver operational benefits to the business as a whole. Being able to put together a global team of experts that matched the international spread of Conductix-Wampfler was one of the main reasons for the project’s success and delivered practical results.
Kreston Bansbach understands that communication is essential to the success of any global project which is why the Kreston network is extremely well-placed to be able to deliver successful client projects. We know how to set up efficient reporting systems including tax so all the relevant information is shared with our clients. This means all local accounting and tax needs for Conductix-Wampfler’s offices were identified and addressed. And they continue to operate effectively thanks to continuous monitoring.
“The Kreston worldwide team really worked well together to help us create a tailored reporting and tax filing process for our finance team worldwide.”
Sven Wolfsperger CFO of Conductix-Wampfler
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SENER, China
SENER is a private engineering and technology group founded in 1956. It seeks to offer its clients the most advanced technological solutions and enjoys international recognition for its commitment to innovation, its quality and for its independence.
SENER has nearly 2,500 professionals across its centers in Algeria, Argentina, Brazil, South Korea, Canada, Colombia, Chile, China, the United Arab Emirates, Spain, the United States, Morocco, Mexico, Poland, Portugal, the United Kingdom and South Africa. It accomplishes Aerospace and Engineering and Construction activities and has industrial holdings in companies working in the field of Energy and Environment.
In 2013, SENER Group created SENER (Shanghai) Systems Company Limited to provide high quality services to Chinese clients. SENER (Shanghai) needed finance & tax consultation, accounting and personnel services to support its development. It engaged Brighture to provide these services in 2016.
Brighture provides SENER with their management accounts, tax compliance and reporting, as well as tax advisory and planning services to help mitigate tax liabilities.
“We are very focused on ensuring that we understand our client’s needs so we can be responsive and proactive with advice and solutions. Our job is to help improve our clients’ efficiency and ensure we help grow their business.“
“With respect of opinion of Brighture service, we are more than satisfactory with the service provided by Brighture. We have very easy communication with Brighture. All the reports prepared by Brighture are well organized, sent in time. The data are all correct, etc. In one word, we are very happy working with Brighture.”
Mr.Guangwu Liu GM at SENER (Shanghai) Systems Company Limited
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JCHX Mining Management Co. Ltd., China
JCHX Mining is a major service provider focusing on engineering, mine construction, underground development, contract mining, and research and development in the nonferrous, ferrous and chemical industries.
It has a registered capital of CNY 583 million, employs more than 6,000 people, and controls 30 subsidiaries, four branches and a provincial-level R&D centre. As part of its business plan, the company asked Zhonghui, a member of Kreston Global in China, to help in three main areas.
JCHX Mining wanted to improve its internal management, particularly its financial management capabilities. They also wanted a better understanding of the IPO procedure, and to improve their information-gathering on the latest local rules affecting their various overseas projects.
Discussing their needs with JCHX Mining, we helped create an effective financial management procedure and compliance framework. We also provided an audit service in the company’s IPO and the issuance of a CNY 1 billion convertible bond. For its overseas business, we helped provide training for the financial staff involved in foreign projects while giving expert tax advice regarding various investment projects.
Lu Li, audit partner at Zhonghui, commented:
“It has been very satisfying to help such an important company make major improvements. Our advice will optimise business efficiency and provide solid financial foundations, helping the company continue to flourish globally.”
“It was the right decision to engage Zhonghui as our trusted consulting company for numerous complex national and international projects. The Zhonghui team of experts really worked well together to help us create a tailored reporting and tax filing process for our finance team worldwide.”
Zhu Hongmeng, CFO of JCHX
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DOGA Group, Barcelona, Spain
The company has more than 60 years of experience in the development and production of automotive components. It has affiliated companies in Italy, USA, Mexico, Brazil, China and India, and sells products to more than 70 countries. Its markets include industrial vehicles, buses, trains, agriculture and construction machinery, boats, motorcycles and cars.
The group was expanding its operations in Brazil, China, India, Mexico and was seeking local firms to ensure compliance with local laws and to audit the subsidiary financial statements for consolidation purposes.
DOGA Group’s management team was unhappy with the performance of the local accounting firms they were using at the time. They discussed their needs with Kreston Spanish member firm Kreston Iberaudit which the company already used for other services. Kreston Iberaudit explained the advantages of using the Kreston Global network, and DOGA subsequently began working with Kreston Partnership in Brazil. They were so pleased with its work that they appointed Kreston Global member firms in India and Mexico (Kreston Rangamani & Kreston BSG) to carry out similar work.
Montse Martin, the company’s Finance Director, said: “DOGA Group has engaged the services of Kreston’s Partners in Spain, Brazil and China for Audit, Tax and Transfer Pricing matters for several years. As a result of this mutually beneficial relationship, we are now turning to Kreston firms in India and Mexico to assist our international subsidiaries.
“To date, we have been extremely impressed with the dedication of the Kreston Partners and their ability to provide a personalised service throughout, tailored to the requirements of each of our affiliates.”
“The cohesion between members across the network is one of Kreston’s greatest strengths and we look forward to their continued support”.
Elena Ramírez Marín, lead client partner for DOGA Group at Kreston Iberaudit, commented:
“It has been very gratifying to help our friends at DOGA expand their international operations. The work has also highlighted the tremendous benefits the Kreston Global network gives to both clients and member firms.”
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Balluff GmbH, Germany
Balluff is an international, family-run business specialising in sensors and automation for sectors including assembly and logistics plants. It was founded 100 years ago near Stuttgart, Germany, and has since expanded into 68 countries.
Kreston Global has worked closely with Balluff for many years, helping it develop as a global player built on solid financial foundations.
We are involved in the decision-making process at all stages, advising on everything from company formations to large acquisitions. We audit the consolidated financial statements and all German subsidiaries and look after tax matters globally.
From our side, the relationship has been led by Michael Kalmbach for the last 20 years. He said: “We are really proud to have been involved in the development of Balluff – their development is a real success story. Our dedicated team contributes to their business and tax know-how to make sure we always deliver solutions that overcome obstacles, often before they arrive.”
In addition to our ongoing audit and tax consulting advice, our focus is to help Balluff grow. Our consolidated, scaleable processes have helped them implement transfer pricing solutions to make the business work efficiently across its global footprint.
Balluff is part of a growing industry where its customers are constantly seeking to increase efficiencies and reduce costs. “Kreston Bansbach are looking forward to helping Balluff do the same”, said Michael, “we are looking forward to working alongside them in their future development. Happy 100th Anniversary!”.
“Working with Kreston Bansbach for the length of time we have, means that we have a very strong working relationship, and the Bansbach team really understand our business and what we are trying to do. They are seen by us as part of our team and we trust them to help us continue to grow as a business.”
Katrin Stegmaier-Hermie CFO at Balluff
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AUMA Riester GmbH & Co., Germany
AUMA has been developing and building electric actuators and valve gearboxes for over 50 years. It supplies a wide range of industries including water, power, oil & gas and general industry.
As a global organization with 2,600 employees and over 40 entities worldwide, AUMA is facing a growing complexity regarding financial and tax compliance, changes to existing business models as well as mergers & acquisitions. In order to keep pace with these challenges AUMA was searching for a reliable partner who is able to support its development and to deliver high quality and efficient services on a global stage.
For this reason, AUMA relies on the global network from Kreston Bansbach.
“We wanted to deliver more efficient co-ordination of the group audit and the consolidated financial statements as soon as possible,” said Eike Neumann, the Kreston Bansbach lead partner. “In addition, we enhanced managing AUMA’s international consulting project and teams.”
As a result we also work together on other consultancy intensive projects such as international transactions, international and complex transfer pricing, expansion projects as well as assisting the establishment of new AUMA companies and cross-company reorganisation projects.
Our expert team carries out complex and detailed work, such as financial, tax and legal due diligence in the context of transaction projects. We delivered on time, on budget and within all required legal deadlines.
“It was the right decision to engage Kreston as our trusted consulting company for numerous complex national and international projects. Especially the global coverage and presence of the Kreston network has proved to be a real value and key enabler for the success of our projects.”
Christoph Neubauer Group Director Finance & Controlling
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Manufacturing and automotive industries
June 29, 2021
The manufacturing and automotive sectors face a unique set of financial challenges, from fluctuating raw material costs to the complexities of global supply chains. Companies in these industries often grapple with issues such as capital allocation, cash flow management, and regulatory compliance. As market dynamics shift and competition intensifies, effective financial planning becomes imperative. Without a strategic approach, businesses risk facing operational disruptions, missed growth opportunities, and financial instability. Unlocking capital for innovation, navigating expansion plans, and managing costs efficiently are critical to sustaining success in this rapidly evolving landscape.
Financial consultancy for manufacturing and automotive businesses
At Kreston Global, we offer tailored financial consultancy services that address the specific needs of manufacturing and automotive companies. Our expertise ensures that your organisation can navigate the complexities of the sector while driving sustainable growth. Our services include:
Cash flow
Understanding and managing cash flow is essential for manufacturing and automotive companies, where timing and liquidity can impact production and operational capabilities. Our specialists conduct thorough cash flow audits, identifying trends and potential bottlenecks. We provide actionable insights to optimise working capital and ensure that your business maintains adequate liquidity for ongoing operations and unforeseen expenses.
Forecasts and budgets
Accurate forecasting and budgeting are vital for strategic decision-making. Our experts analyse industry trends and market data to help you develop robust financial forecasts and budgets. This proactive approach allows you to allocate resources effectively, anticipate market shifts, and make informed decisions that align with your long-term objectives.
Specialist manufacturing and automotive accounting and tax advice
Navigating the intricate tax landscape is a significant challenge for manufacturing and automotive firms. Our dedicated team provides specialised accounting and tax advice tailored to the nuances of your industry. We ensure compliance with local and international regulations while identifying tax optimization opportunities that can enhance your bottom line.
Transfer pricing solutions
In a globalised market, effective transfer pricing strategies are essential for compliance and profitability. Our professionals assist in developing transfer pricing policies that align with regulatory requirements while optimising your tax position. We provide comprehensive documentation and analysis to mitigate risks associated with intercompany transactions.
International subsidiary tax structuring and planning
For businesses operating across borders, international tax structuring is crucial. Our experts help design effective tax strategies for subsidiaries, ensuring compliance with diverse regulatory frameworks. We work to minimise tax liabilities while maximising operational efficiency and profitability in your international ventures.
Growth and exit plans
Strategic growth and exit planning are critical for long-term success. Whether you’re considering expansion, mergers, or acquisitions, our team provides in-depth analysis and strategic insights. We help you evaluate opportunities, assess risks, and create plans that align with your vision for the future.
Obtaining finance
Securing financing is often a complex process, particularly in the manufacturing and automotive sectors. Our consultants work closely with you to develop financial strategies that align with your growth objectives. We assist in identifying funding sources, preparing proposals, and navigating the financing landscape to support your business initiatives.
Overseeing business acquisitions
Acquisitions can drive significant growth, but they require careful planning and execution. Kreston Global’s team supports you throughout the acquisition process, from due diligence to integration. Our expertise ensures that you can capitalise on new opportunities while mitigating potential risks associated with mergers and acquisitions.
Sales transactions
The sale of products and services in the manufacturing and automotive industries often involves complex pricing strategies and customer relationships. Our professionals provide insights into optimising sales transactions, ensuring compliance with regulatory requirements while maximising profitability and customer satisfaction.
What are Kreston Global’s professional standards in the manufacturing and automotive space?
Kreston Global members observe the local professional standards of their respective countries as well as complying with international regulations. Our effective internal monitoring programme ensures all our partners meet the International Standards on Quality Control as well as the International Standards on Auditing when conducting transnational audits. Kreston Global teams proudly follow the code of ethics as dictated by the IESBA (International Ethics Standards Board for Accountants).
As a member of the Forum of Firms, an association of international networks of accounting firms, Kreston Global is dedicated to meeting the highest of standards in financial reporting and auditing practices across our global community.
Why choose Kreston Global’s manufacturing and automotive financial services?
Kreston Global stands out for its deep industry expertise and global reach. Our interconnected network of professionals provides unparalleled insights into the manufacturing and automotive sectors, empowering businesses to expand sustainably. We leverage our extensive knowledge and experience to offer tailored solutions that address the specific challenges you face. With Kreston Global as your partner, you gain access to a wealth of resources and expertise that will help drive your business forward in a competitive landscape.
Contact Kreston Global to find out how we can support your manufacturing and automotive business
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News
Value Chain Analysis
June 15, 2021
Value Chain Analysis
By Nipun Arora, Kreston Ardent CAtrust PAC, Singapore
Post BEPS (Base Erosion and Profit Shifting), Transfer Pricing Documentation requires analysis of the global value chain and identification of value drivers. Para 1.51 of the 2017 OECD Guidelines states that it is important to understand how value is generated by the group as a whole and the contribution that the related parties make to that value creation.
In line with the BEPS objective, the Singapore IRAS also endorses the principle that profits should be taxed where the real economic activities generating the profits are performed and where value is created.
Value chain analysis involves a thorough understanding of the functions, risks, and assets of the group as a whole and evaluating how they are in alignment with the value drivers. This analysis would assist in the attribution of profits to the respective group entities.
Case Study
SGPL is a company incorporated in Singapore and is in the business of manufacturing industrial equipment. The manufacturing facility of SGPL can only cater to a limited category of industrial equipment.
The customers of SGPL are majorly from the Middle East Region. SGPL negotiates with its customers on a principal-to-principal basis and finalises the contract terms.
PTX, a company incorporated in Indonesia, is the wholly-owned subsidiary of SGPL and is also in the business of manufacturing industrial equipment. The manufacturing facility of PTX can cater to a wide category of industrial equipment.
The customers of PTX are majorly local companies i.e., companies in Indonesia. PTX negotiates with its customers (in Indonesia) on a principal-to-principal basis and finalises the contract terms.
SGPL subcontracts the majority of projects, that is acquires, to PTX. The procurement of input materials is undertaken by SGPL and assembly is undertaken by PTX.
SGPL also undertakes procurement of input materials for its manufacturing and also for the independent contracts of PTX with its customers.
The brand name is owned by SGPL and PTX has been granted the right to use the brand name in its territory.
Evaluation of functions, risks, and assets
Some pertinent questions to consider:
Has SGPL guaranteed any part of the capacity of PTX? Can any part of the idle capacity of PTX attributed to SGPL and the corresponding remuneration?
Would SGPL be required to compensate PTX for idle capacity where the capacity has not been utilised by SGPL during a particular year, for example, downturn due to covid?
Do SGPL and PTX undertake inventory functions, such as the warehousing of raw materials procured, or is it a just-in-time purchase?
Concerning procurement function, does SGPL act as a support services provider/ commission agent/ buy-sell entity? Key aspects to be considered in this regard – location savings, supply chain intangibles, logistics.
Which entity undertakes the functions related to intangibles i.e., development, enhancement, maintenance, protection, exploitation?
Conclusion
Tax authorities around the world are evaluating transfer pricing outcomes based on value creation analysis. Realignment of taxing rights with the economic substance is the key message from the BEPS actions. Therefore, the taxpayers must prepare robust documentation along with underlying evidence to substantiate the substance alongside form.
News
CASE STUDY: Balluff – 100 years of innovating automation
April 26, 2021
Balluff is an international, family-run business specialising in sensors and automation for sectors including assembly and logistics plants. It was founded 100 years ago near Stuttgart, Germany, and has since expanded into 68 countries.
Kreston Global has worked closely with Balluff for many years, helping it develop as a global player built on solid financial foundations.
We are involved in the decision-making process at all stages, advising on everything from company formations to large acquisitions. We audit the consolidated financial statements and all German subsidiaries and look after tax matters globally.
From our side, the relationship has been led by Michael Kalmbach for the last 20 years. He said: “We are really proud to have been involved in the development of Balluff – their development is a real success story. Our dedicated team contributes their business and tax know-how to make sure we always deliver solutions that overcome obstacles, often before they arrive.”
In addition to our ongoing audit and tax consulting advice, our focus is to help Balluff grow.. Our consolidated, scaleable processes have helped them implement transfer pricing solutions to make the business work efficiently across its global footprint.
Balluff is part of a growing industry where its customers are constantly seeking to increase efficiencies and reduce costs. “Kreston Bansbach are looking forward to helping Balluff do the same”, said Michael, “we are looking forward to working alongside them in their future development. Happy 100th Anniversary!”.
News
CASE STUDY: Kreston Bansbach client success
April 19, 2021
AUMA has been developing and building electric actuators and valve gearboxes for over 50 years. It supplies a wide range of industries including water, power, oil & gas and general industry.
As a global organization, with 2,600 employees and over 40 entites worldwide, AUMA is facing a growing complexity regarding financial and tax compliance, changes to existing business models as well as mergers & acquisitions. In order to keep pace with these challenges AUMA was searching for a reliable partner who is able to support its development and to deliver high quality and efficient services on a global stage.
For this reason, AUMA relies on the global network from Kreston Bansbach.
“We wanted to deliver more efficient co-ordination of the group audit and the consolidated financial statements as soon as possible,” said Eike Neumann, the Kreston Bansbach lead partner. “In addition, we enhanced managing AUMA’s international consulting project and teams.”
As a result, we also work together on other consultancy-intensive projects such as international transactions, international and complex transfer pricing, expansion projects as well as assisting the establishment of new AUMA companies and cross-company reorganisation projects.
Our expert team carries out complex and detailed work, such as financial, tax and legal due diligence in the context of transaction projects. We delivered on time, on budget and within all required legal deadlines.
“It was the right decision to engage Kreston as our trusted consulting company for numerous complex national and international projects. Especially the global coverage and presence of the Kreston network has proved to be a real value and key enabler for the success of our projects”, said Christoph Neubauer, Group Director Finance & Controlling.
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