Why might a company engage in renationalization of production?

Engaging in renationalization of production allows a company to regain greater control over its operations, supply chain, and production processes. This move often arises from a desire to mitigate risks associated with global supply chains, such as political instability, currency fluctuations, and trade restrictions that can affect the smooth operation of a business. By bringing production back within the country's borders, companies can enhance their responsiveness to market changes and consumer demands, increase transparency in operations, and ensure adherence to local regulations.

Furthermore, this strategy can foster a stronger relationship with domestic stakeholders, including consumers who may prefer to support local businesses and governments that favor domestic job creation. Companies may also seek to protect intellectual property and maintain quality standards that can be compromised when outsourcing production overseas. Thus, the decision to renationalize is often strategically motivated by the desire to consolidate control and reduce overall business risks associated with international production networks.