Expanding production in Asia: a strategic lever for Italian companies

In the current context of geopolitical instability, realignment of value chains and increasing pressure on industrial competitiveness, the choice to expand production in Asia represents for many Italian companies a potentially decisive lever. However, it is a decision that requires a structured, forward-looking approach, capable of integrating economic, regulatory, cultural and environmental considerations. It is along these lines that a number of reflections emerged during our webinar 'International Talk: Foreign Manufacturing Expansion in Asia'. 

Expanding production in Asia: a long-term strategic choice 

One of the central aspects that emerged concerns the need to adopt a long-term vision. Manufacturing expansion in Asia cannot be evaluated solely on the basis of immediate benefits in terms of reduced labour or energy costs. On the contrary, it requires a life-cycle analysis of the investment, including: 

• start-up costs (CAPEX); 

• recurring operating costs (OPEX); 

• tax and customs charges; 

• indirect costs related to intercultural management, regulatory compliance and training of local staff. 

An accurate assessment of the Total Cost of Ownership (TCO) is the prerequisite to prevent the operation from proving unsustainable in the medium term. Countries such as India, Vietnam and IndonesiaWhile offering advantages in terms of labour and industrial incentives, they require actual production location and adaptation to certification, licensing and taxation regimes that can vary considerably even within individual states. 

From analysis to structuring: the value of specialised consultancy

to expand production in Asia

The complexity of industrial operations abroad makes the support of advisors capable of combining technical expertise, knowledge of local markets and strategic vision essential. In particular, a specialised consultancy can guide companies through the following steps: 

• Pre-feasibility studythrough market due diligence and a realistic simulation of costs and margins, it is possible to validate the business model in the local context, select the Most suitable target country and assess geopolitical, infrastructural and regulatory risks. 

• Settlement structuringThe choice of corporate vehicle (joint venture, subsidiary, branch), tax optimisation through bilateral treaties, human resources configuration and legal compliance must be carefully coordinated to ensure alignment with the company's objectives. 

• Operational managementa balanced governance system needs to be built between headquarters and local teams, monitor production KPIs and supply chainsand proactively manage the start-up phase to avoid inefficiency or under-utilisation of facilities. 

Sustainability and localisation as strategic assets

A further critical success factor concerns the ability of the company to generate value for the local context. Asian governments, especially in India and Vietnam, increasingly reward companies that promote a sustainable and responsible production model. In this sense, sustainability is not only a reputational lever, but also a real competitive driver. 

Adopt ESG standardsreducing the environmental impact of operations, investing in the training of local staff and promoting the growth of in-house skills are strategic choices that can translate into: 

• facilitated access to public licences and incentives; 

• recognition of privileged status in the special economic zones (SEZ); 

• increased loyalty of the workforce and stability in relations with institutions and stakeholders. 

Integrate KPI ESG in assessing industrial performance, adopting low-energy technologies and building ethically responsible local supply chains strengthens not only a company's competitiveness, but also its ability to adapt to future regulatory and social changes. 

Industrial internationalisation: from opportunity to business model transformation 

The expansion of production in Asia cannot be interpreted as a simple geographical shift in manufacturing capacity. It is a structural transformation: 

• integrated and multidisciplinary planning; 

• orchestration between corporate strategy and local operations; 

• systemic vision including fiscal, legal, organisational and cultural aspects. 

Only through a well-defined path, supported by expert advisors and a coherent business plan, can manufacturing internationalisation become a concrete lever to build global competitive advantageaccess new growth markets and position Italian companies more resiliently and sustainably in the international business environment. 

Octagona, with over 20 years of experience in the internationalization strategiescan guide you every step of the way. Our experts will support you in the strategic planning, target market analysis, management of tax and legal aspects, and operational implementation of your expansion project. 

Contact us today for a personalised consultancy and find out how we can turn your vision of international growth into reality.