Overseas joint venture

Should a company become involved in an overseas joint venture or have a wholly owned subsidiary, these entities will have to have a board where you will need some local representation. Your local attorney is usually the most cost-effective choice to represent you at statutory meetings you and one or more designated subordinates will need to attend meetings where corporate strategy and budgets are on the agenda. Whoever the CEO is, this individual usually has the job title of managing director and serves as board chair. 

In the early postwar years, according to historian E. N. Brandt, Dow was totally absorbed in its domestic expansion and barely aware of a world beyond North America. Its sales abroad amounted to only 5 percent. The company showed more interest in foreign markets after the mid-1950s. Its overseas growth was carried out both by direct investment and by joint ventures with foreign firms, but rarely by acquisition. 

As noted in Chapter 7, Takeda initiated its first venture overseas by forming a ten-year, 50-50 joint venture with Abbott to develop and market new products in 1977 and 1987 its venture was renewed for another ten years. In 1997 TAP Pharmaceuticals became a full-fledged subsidiary of the Japanese company, responsible for the production and marketing organizations for the North American market. In 1998 a comparable subsidiary for Europe was established in Frankfurt, Germany. 

Chemical companies are seeking to expand their operations into emerging overseas markets, particularly in the Pacific Rim countries. While joint ventures are proving to be the most popular method of securing entry, there are a number of drawbacks. A company can lose control of its technology and it can be difficult to maintain quality processes if the host country demands a majority shareholding, usually based on a 51 49 split. Nonetheless, these types of business ventures can be cost effective and less risky, particularly in an unstable political and economic environment. Chemical companies will continue to make use of joint ventures and other forms of strategic alliances to enter new markets. How these enterprises will fit into... 

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