Complete Feasibility Study and help with Financing
Carl Johan Mørck from the company Carlsen Europa A/S had great experiences working with DIBD, which has carried out comprehensive feasibility studies and raised financial support for the entire process.
-To put it simple, it has given us a much better background and conditions for our establishment in the US, compared to when we moved our production to Lithuania a few years ago. We have gotten continuous advice and assistance and we are far better prepared to handle American customers compared to our European competitors, says Carl Johan Mørck, CEO and owner of Carlsen Europa A/S, about his experience with DIBD. Carlsen Europa manufactures lightweight, deep freeze bodies for home delivery of frozen food. In Denmark Carlsen Europa is best known for the frozen truck-bodies boxes on the HjemIs delivery trucks, but their largest markets are Europe, where their bodies are mounted on more than 3.500 cars.
The production moves to Lithuania
Four years ago, Carlsen Europa moved their production from Funen in Denmark, to Lithuania. At that time, DIBD helped prepare the feasibility study and the full business plan. After a couple of years in Lithuania with a very steep learning curve, Carl Johan Mørck and Carlsen Europa were motivated, again, by an old dream of getting a commercial breakthrough in the US.
So far, Carlsen Europa’s sales to the US have been moderate, primarily due to a fundamentally different tradition in design in the US, where things are designed larger and heavier. Carlsen Europa saw, however, that the increasing fuel prices in the US could create an opportunity of getting started on the highly competitive American market. Motivated by this, Carlsen Europa engaged DIBD’s office in the US to elaborate a market study, which confirmed and documented the opportunities.
Subsidies for the feasibility study
Simultaneously, DIBD in Copenhagen assisted Carlsen Europa in securing access to subsidies for the further feasibility studies. This option has not been available earlier where the focus of these subsidies was on developing markets.
The market potential was already documented and the low dollar exchange rate made it attractive to investigate the opportunity of establishing local production. The result was a longer project, during which DIBD’s office in New York City developed a complete plan for establishment of an assembly facility in the US, including a comprehensive financial analysis of various scenarios.
-We went from having a lot of ideas about getting established in the US, based on a lot of unknown factors, to having a solid basis for making the right decisions. Even the smallest details and conditions were validated. This provided us with a fantastic starting point for opening negotiations with the largest potential customers in the US and to present ourselves as a serious, professional and very reliable partner. It was world class sales work and DIBD assisted during the whole process. The fact that DIBD has secured funding for the whole process also, has just been an added benefit, says Carl Johan Mørck.
He emphasizes that the investment incentives in the US are very good. –There is open competition between the individual states in order to create local jobs and this gives foreign investors an outstanding position to negotiate with the state level investment authorities under Invest in America.
9 December 2008