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Challenges remain for Industrials, but calculus shifts

Disruption arising from COVID-19 has accelerated trends already apparent in the industrials market – particularly digitalisation and trade volatility – and transformation has gone from a “nice to have” to a necessity, according to the latest findings from Baker McKenzie. The law firm surveyed 700 company leaders in six industrial sub-sectors in early 2020, and again at the end of the year after the pandemic had taken hold of the global economy.

Interviews with sector leaders highlighted renewed action and energy, with companies looking to acquire technology and reimagine systems, networks and services to thrive in future. A License to be Bold: Transforming Industrials covers four areas of focus: adapting to the new market; digitalising for growth; disruption-proofing supply chains; and sustainability.

Nikolaus Reinhuber, Global Chair of Baker McKenzie’s Industrials, Manufacturing and Transportation industry group says, “Our findings show that disruption arising from COVID-19 has accelerated trends already apparent in the market –– particularly digitalisation, trade volatility and the importance of sustainability –– and transformation has gone from “nice to have” to necessity. There is a significant imperative to change, with greater stakeholder buy in and long-term viability outweighing short-term performance.

“Those organisations that meet disruption with a bold and innovative vision and execute effectively on it, will be best placed to adapt and grow over the coming decades. The industry has an imperative to change and a new license to be bold –– the stage is set for transformation.”

A License to be Bold: Transforming Industrials

Hogan Lovells advises McCormick & Company on US$1bn debt offering

Global law firm Hogan Lovells advised McCormick & Company, Inc. (McCormick) on an aggregate of US$1bn of new debt issuances.

McCormick, which manufactures, markets and distributes spices, seasoning mixes, condiments and other flavourful products to the entire food industry, offered and sold US$500m aggregate principal amount of 0.900% notes due 2026, and US$500m aggregate principal amount of 1.850% notes due 2031.

The Hogan Lovells team advising McCormick was led by capital markets partners Alex Bahn (Washington DC; Philadelphia) and Eve Howard (Washington DC), tax partner Scott Lilienthal (Washington DC), capital markets senior associate Phillip Schuster (New York), corporate associate Sarah Branch (Washington DC), and tax senior associate Caitlin Piper (Washington DC).

The Hogan Lovells U.S. capital markets team regularly advises clients on complex and high-value offerings of debt, equity, and hybrid securities. Our issuer clients include some of the most recognisable corporate names in America. We are able to structure and execute capital markets transactions in order to maximise client goals, including developing innovative transactional structures.

Scottish manufacturing excellence and innovation recognised

Nominations are open for a national award to recognise excellence and innovation in Scotland’s manufacturing sector, the First Minister has announced.

The First Minister’s Award for Manufacturing Leadership celebrates competitive and innovative manufacturing companies who champion fair work and invest in the skills and wellbeing of their employees.

The winning company will receive:

  • a physical award designed by students on Skills Development Scotland’s Engineering: Design and Manufacture Graduate Apprenticeships programme
  • two places, together worth £2,500, on a delegation arranged by the Scottish Manufacturing Advisory Service (SMAS) of industry leaders visiting an overseas advanced manufacturing site
  • one year of free enterprise membership of Scotland House in London which gives access to meeting rooms, event spaces and exclusive networking events

The Scottish Government is supporting advancement in manufacturing including the £65 million National Manufacturing Institute Scotland, up to £14 million investment through the Advancing Manufacturing Challenge Fund, and the £39 million Glasgow City Regions City Deal project to develop the essential infrastructure needed for the Advanced Manufacturing Innovation District Scotland.

The First Minister said: “Scotland has a long and proud tradition in manufacturing, a highly productive and dynamic sector of our economy. We are also committed to inclusive growth that combines increased prosperity with greater equality, opportunity and fairness.

“A thriving manufacturing sector is crucial to Scotland’s economic future, so the Scottish Government wants to celebrate the companies who lead the way in their commitment to innovation and excellence whilst investing in the skills and wellbeing of their employees.

“I look forward to seeing the great work being done by our many exemplary manufacturing companies who go the extra mile to champion fair work and inclusivity.”

The winner will be announced at the Scottish Manufacturing Advisory Service’s National Manufacturing Conference on 26 May, 2020.

Malta: Your future-proof manufacturing base

Manufacturing has been a vital sector for Malta since the 1950s and is still one of the main pillars of the local economy to this day.

In recent years, Malta’s economy was among the strongest performers among EU member states, with an average growth rate of around 6%.

A myriad of companies nowadays use Malta to produce goods with a high added value, constantly innovating their processes and products.

The advanced manufacturing sector consequently covers a remarkably wide range of areas, including automotive and aviation components, plastics, precision engineering, medical devices, pharmaceuticals and medical cannabis, among many others.

Some of the leading global players have set up their own facility in Malta to take advantage of the business-friendly environment, competitive cost structures, and highly skilled workforce.

With its strategic location, Malta can serve as a hub to target nearby markets within the EU and MENA region.

English is one of the country’s two official languages. Besides reflecting the longstanding relation between Malta and the UK, this simplifies the provision of training, as well as investors’ interactions with other stakeholders and suppliers, access to legislation, and ease of communication with the authorities.

An efficient and transparent tax system is undoubtedly another important factor in attracting investors to Malta. This is further complemented by a wide range of assistance provided by Malta Enterprise, the government’s economic development agency.

All this provides that essential factor so important to any investor: stability. Indeed, it is this economic, political and social stability which has provided the bedrock for existing operations to flourish and serves as an attraction to a steady stream of new investors, not only within manufacturing.

Through a very competitive institutional and legislative framework, Malta has also effectively established itself as the leading distributed ledger technology jurisdiction and has already attracted a number of blockchain companies. This transformational technology has a tangible potential of revolutionising a number of niches including manufacturing.

The role of blockchain for Industry 4.0 and the Internet of Things (IoT) is considerable and some companies are already combining blockchain solutions with 3D printing and other processes to enable new manufacturing methods.

Malta Enterprise will ensure that any investor will get the best possible benefits out of a Malta operation.

For more information about Malta Enterprise, please visit: https://www.maltaenterprise.com/