Talks on Purchasing agent for Benin electric an machinery equipments

Today a friend from Benin visited Beijing, and I went to his staying hotel in Beijing, two men sat around coffee table talking about our business.

Understanding of the benefits of Chinese purchasing agent

The guy told me that he is planning visit several Chinese companies for his inquired electric and machinery equipments such as automobile, gas turbine power, used gas turbine for his 125mw plant, and also the HFO diesel generator. He told me that three years ago, his company set up a Beijing office and paid every months the office expense in Beijing, he though the office cost was a little high when compared with the business his office had done for his headquarters. A chief representative has too be paid in higher salary and also expatriate fee out of Benin. And the chief representative from Benin does not have too much understanding the Chinese language and culture, esp. have no knowledge to tell the quality and cost ratio for heavy equipments of machinery and electric. So other Chinese staff should be hired to help him.

I told him that a purchasing agent could solve his problems of reducing cost and also getting the right equipments. The experience local purchasing agent who has being working in the machinery and electric industry for providing equipments to foreign companies,  can use his own channel to identify the right producers from China only by several telephone calls, no need to visit every producers. The local purchasing agent could use his force or influence accumulated in the electric and machinery industry to let the producers offer the most cost effective equipments. Thanks to their working experience in the most famous EPC or turnkey contractors and suppliers in China, these reputable suppliers or contractors can help the local purchasing agent to handle all the tasks as a reseller.

Purchasing agent helps to evaluate potential China producers

The Benin finally agreed that a local high efficient purchasing agent will be a better replacement for a local representative office. And he will first visit several Chinese producers, and then will send the short listed suppliers to us to a evaluation on the electric and machinery equipments quality, price, after sales services, reputation among the producers. Finally he will conduct final negotiation on our value added advice for his buying.

Chinese preferential or conccessional loans or bank guarantee for power plant projects

Apart from the purchasing agent issue, we also talked a lot about his planned gas turbine power plant. he told me that his company is going to establish a gas turbine powered plant by using gas from Nigeria. I suggested that two important certificates should be got from his local government: one is the IPP, another is PPA. Ipp means independent power producer; PPA is power purchase agreement. He only has 30% of the total investment required for the power plants, the balance should be from Chinese government preferential or conccessional loans, with annual rate of 2% mature term of 15 years. But the first thing he should do is to list his project in the government development plant list, and then let his government apply loans from China, among the loans certain percentage will be earmarked for his power plant project. Chinese government policy bank need sovereign guarantee. If conccessional loans are not available, he can use buyer's credit to apply loans from Chinese EXmbank upon reputable bank guarantee.