Case Studies

BDO has extensive experience of providing solutions to the manufacturing industry. 

Supporting Kronospan across Europe

Continual investment and innovation have propelled Kronospan, which began life as an Austrian sawmill over a century ago, to its current status as the world’s leading woodbased panel producer. Kronospan Holdings Ltd, Cyprus, a e1.4bn company, has retained strong European links. Today it operates in 11 countries across Central Europe.

We were first appointed auditors to the group in 2001. From our Manchester office we manage its global audit processes and co-ordinate reporting with local auditors – many of them BDO International Member Firms – for 35 constituent companies. That calls for integrated working to a very high standard, both nationally and internationally.

Ensuring the free flow of information is critical. We introduced an extranet site in 2006 to collate local reporting and update individual offices on critical dates. We also undertake regular site reviews; annually in Poland and on a rolling basis elsewhere.

Says Kronospan spokesman Chris Ryan, “Even after all these years I’m still impressed by the high quality of the service we get from BDO in Manchester. They resolve technical issues quickly and effectively. They’re very pragmatic. And they get things done on time.”

ZTC gets ready for AIM

ZTC Telecommunications designs and manufactures mobile telephone handsets in China. The company decided on an AIM flotation and appointed BDO as its reporting accountant.

“We’ve got strong credentials in cross-border AIM deals – this year alone we’ve advised on 17 international IPOs, we’ve got extensive manufacturing experience and we have offices in China – so in many ways we were the obvious choice,” commented Corporate Finance Assistant Director, David Wright. “It has turned out to be an excellent fit. We’ve managed to do far more for them than formal reporting: implementing improvements to the control and reporting systems of the
business during the course of the transaction.”

“Bringing an emerging Chinese mobile handset company to the AIM market presented many unique challenges and we relied on good advisers,” said ZTC Finance Director Mark Syropoulo. “BDO’s Corporate Finance team played a critical role in our timely admission process. In particular, their on-the-ground support in China was excellent.”

Energetic AIM debut for China Shoto

Our reputation in the AIM market and excellent connections and experience in China has brought many interesting companies to our door. China Shoto manufactures high power, rechargeable cells which can tap into solar or wind power in remote locations, primarily for telecommunication relay stations. In addition it also supplies the fast growing electronic bicycle market and manufactures battery packs for locomotive starter engines.

The initial AIM flotation was an unqualified success. At the time of the IPO the company raised £6m at a price of 130p giving it a market capitalisation of £26m. Three months later the price had risen 35 per cent to 175p. On the back of this significant interest, the company went back to the market to raise a further £5m in a second round of fundraising.

Jack Clipsham, who leads BDO’s Corporate Finance services to East Asian businesses and was responsible for our work with China Shoto commented: “Our track record of assisting Chinese businesses to float combined with close working relationships with local BDO International Member Firms and a UK team, including Chinese nationals mean that we are well positioned to add significant value to those seeking to take advantage of these opportunities.”

Helping two FMCG producers form a JV and exploit Poland as a low cost manufacturing base to produce household care products

The client was the largest European contract manufacturer of personal care and household products and we ran a “clean room” diligence process on behalf of both stakeholders. Our main role was to help management assess the savings potential through redeploying one company’s Spanish and UK based operations to the other company’s new plant in Poland - but our inputs extended to many aspects.

We supported the JV business with the subsequent production transfers in order to provide assurance to key customers that the supply chain would not breakdown during the moves. We helped calculate the stocks/inventory build required in order to make production transfers to Poland. We assisted with production engineering, trials and manufacturing ramp-up of household care products at the new Polish plant and assisted with factory closure activity in Spain. 

We also helped the client implement Pan European Sales and Operational Planning disciplines in order to allow management to aggregate demand forecasts and make centralised allocation decisions to smooth capacity utilisation across factories. Overall the BDO specialist team helped management create synergies in excess of EUR 45m available through integration of two businesses.