TP FAQs: Positioning of an Import-Processing Company | 海外进料加工企业如何定位
Updated: Nov 8, 2022
Processing with imported materials means using your own foreign exchange to buy raw materials, components or parts in the international market and then processing and assembling them into finished products according to your own design for export to foreign markets.
This practice is also known as "importing to feed the exporters" in China.
Processing with imported materials involves bearing the price and quality risks of raw materials and ties up the enterprise's capital.
From the view of matching profit with functional risk, enterprises processing imported materials should earn more profit (in absolute terms) than Toll Manufacturers because Toll Manufacturers do not include the cost of materials when calculating the cost-plus margin.
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