Customized German Market Analysis and Research for MGA International

MGA International PTE LTD (MGA) formerly known as MG Forests Pte Ltd. is the flagship company of the MGA group which has its registered office and headquarters in Singapore. MGA group has been in the business of trading in Timber for last 40 years and is recognized as a major Timber exporter to India. The group enjoys an excellent reputation in the Timber-trading community in India as well as in international market - mainly owing to the culture Trust, Integrity and Expertise developed by the group during the last three decades.

Besides India the group has its presence in many other countries like Malaysia, New Zealand, Papua New Guinea, Guyana, Suriname, Ivory Coast, Ghana and Liberia etc. The company imports various species of Timber from these countries and exports to countries like India, China and Vietnam. The group has also set up extensive saw milling infrastructure in India so as to cater the increasing demand of sawn timber in Indian & Overseas market.

Business Case

After being successful in their home market as well as many different other countries, the client showed interest in embarking into the German market of trading two special kinds of wood; Pinus Sylvestris and Poplar. In order to validate the market and it’s attractively compared to other international markets – a number of analysis and research tasks needed to be done, before a positive market entry decision could be taken. Also in order to keep a potential investment risk at a low level, the market research was conducted.

Business Challenge

The challenge consisted especially of finding the right trading partners and estimating the annual capacities and their prizes and deliverability. The German market is very conservative and not known to be very. Therefore, before the actual project started, a lot of research was necessary to solve the task and present the client relevant information on various conditions in the wood and lumber market.

Furthermore the client, which is trading wood on a big scale around the world, was interested in very specific qualities, quantities, sizes and even considered to invest in an own saw mill in Germany, if the researched information proved to be interesting enough. This demonstrates the need of valid information and research of the ME.S team.

Our Approach

The market was thoroughly investigated:

This search produced a short list about 50 potential suppliers which were subsequently contracted to assess their ability to deliver Pinus Sylvestris of the desired diameter and length.

  • In sum, ten potential suppliers confirmed the ability to deliver a total of 350.000m3 Pinus Sylvestris per year.
  • A further four potential suppliers have the ability to deliver Pinus Sylvestris, but they either could not be reached for further qualification or could not make definitive commitments to the amount of timber they could deliver.
  • 32 suppliers were disqualified because they either did not have significant amounts of Pinus Sylvestris in their forests or, in the case of two Forestry Departments, because they are not allowed to sell timber for export as long as the domestic industry needs it.

The initial research showed, that it does not appear reasonable to extend the search to further suppliers, as others suppliers are increasingly small and unable to deliver significant amounts of timber

All the information about the contacted „targets“ was delivered in a transparent, well-structured way and prioritized by the MES team and delivered to the client in form of an excel sheet according to the ISO9001:2008 certified method. The list was containing all relevant information including quantitates qualities and sizes etc.

Also valuable, additional information was delivered about the general mechanisms of this market.

Based on this – rather negative information about the very complicated German wood market – following the MES team provided further steps to possible solve the question of quantity and quality supply of the desired woods.

The Outcome

The client did not embark into the market because of the current low quantities and comparable high prizes in the German market and decided to check the market again at a later time. The Services of MES provided immediate and relevant information that in total were purpose fulfilling in the sense that the client could base the – big – investment decision on the same. The client profited from swift, reliable and thorough research and pragmatic and professional validation of the identified targets by the MES team and therefore could save a lot of resources, time and energy.

www.mga.com.sg


Copyright MarketExpansion 2017
*Copyright MarketExpansion 2017. *All services offered on this website are provided by ME.S Management GmbH & its network. Consultinghouse provides management consulting services. For tax or legal services please contact our cooperation partner Counselhouse.