The Situation

When customers demanded local technical support and refurbishment services, Tractus’ Business Inc.ubator® offered a way to mitigate the risks of a fast-track set-up

  • Tolomatic, Inc., based in Minnesota, USA, designs, manufactures and markets automation components in three different technologies: electric linear motion, pneumatic linear motion and power transmission.
  • It had been successfully selling and supporting, with refurbishment services, its ServoWeld® servo actuators for robotic resistance spot welding of motor vehicles in China since 2005 from its Minnesota manufacturing facility.
  • Its automotive assembly customers in China were demanding that it establish a local after sales support and refurbishment operation to more efficiently and effectively support them.

The Project

Utilizing Tractus’ Tractus’ Business Inc.ubator® services allowed Tolomatic to have on-the-ground customer support immediately while it established a China subsidiary in parallel

  • Tractus supported Tolomatic with the development of its business case for establishing a local customer support and refurbishment facility in China for its ServoWeld® products meeting with its key customers to gain insights into their needs and expectations.
  • Through these meetings it was made clear that in order to remain competitive, Tolomatic would need to establish a local entity, and it needed to do it quickly, and the Tolomatic board approved.
  • Tractus supported Tolomatic’s market entry with Tractus’ Business Inc.ubator® services that included:
    • corporate structuring
      • evaluation of establishing a Hong Kong special Purpose Vehicle (SPV) to be the parent of its China operations entity
    • legal entity establishment
      • coordination of the establishment of its Hong Kong SPV
      • registration of its Shanghai operating subsidiary
      • opening of bank accounts (capital and operating)
    • business licensing and approvals
      • management of its project approval and any other licenses, permits and approvals required for the construction and operation of its business entity
    • human resources recruitment and hiring
      • recruitment and on-boarding of its staff from General Manager through to Assembly Operators initially as Tractus’ Business Inc.ubator® employees and subsequently as employees of its China subsidiary
      • coordination of technical training by Tolomatic staff seconded from the US
    • site selection
      • identification of suitable facilities within the Yangtze River Delta area for the facility
    • project management of the facility fit-out
      • identification and selection of civil, electrical and mechanical contractors
      • negotiation of contracts
      • project management of the demolition and fit-out of the facility
      • supervision of the installation and commissioning of equipment
      • facilitation of payments for services and importation of equipment
      • oversight of the start of production, ramp-up and qualification of output
    • coordination with licensed agents for the import and export of equipment and materials
    • general operations management
      • provision of an interim General Manager for the facility
    • back-office shared services (HR, accounting, cashier and administration) and;
    • acting as the Board appointed Corporate Secretary
  • Tractus provided continuing business support following the formal establishment of the Tolomatic China entity
    • General Management oversight;
    • Strategic advice on business strategy and operations topic through the local Board of Directors, and;
    • Back-office shared services support

The Solution

Using Tractus’ Business Inc.ubator® services, Tolomatic was able to fit-out and start-up its customer service, refurbishment and fabrication facility in only 2-months from Board approval to proceed.

  • The Business Inc.ubator® allowed Tolomatic to immediately have on-the-ground support for its business dealings with its customers, with Tractus’ Senior Managers being the local interface with its key customers while permanent staff were being recruited and its facility fit out.
  • These Inc.ubator® services allowed Tolomatic to start doing business before its legal entity was established and its facility completed.
  • Tractus’ experienced management support allowed Tolomatic to have a facility fully fit-out and ready to show to its key customers only 2-months after Board approval and before its legal corporate entity registration was completed.
  • Using the Inc.ubator® services limited the number of Tolomatic technical staff that needed to be seconded to Shanghai during start-up from 6 to only 2. Tractus provided the remaining support.

The Evidence

“Overall performance has been good. Excellent support for business startup questions and China regulatory processes. Setup and startup of our facility has been excellent”. Our success is a direct result of the Tractus team’s oversight and constant counseling”. – from Tolomatic executive’s formal review of Tractus’ services.