Report - DKSH Vietnam

Europe Asia AmericasAmericas Asia Europe

Contents1 Profile2 Milestones –Swiss business with strong Asian roots6 To our Shareholders andBusiness Partners12 An Efficient Organization –firmly established16 The DKSH Star Concept –key to a successful market entry17 Corporate Values –what makes the Fantree Company unique?20 Consumer Goods in Asia –about being No. 134 Healthcare –gateway to Asia’s medical andconsumer health channels36 Specialty Raw Materials –sourcing at its best38 Technology –solutions that set tomorrow’s standards42 Corporate Services –Operations & Business SupportFinanceHuman Resources44 DKSH Worldwide Presence –a distinctive footprint46 DKSH Offices Worldwide –Asia Pacific48 DKSH Offices Worldwide –Europe and the Americas

ProfileDKSH is the No. 1 services group in Asia, focusing on sourcing,marketing, logistics and distribution.Founded and deeply rooted in Asia, DKSH successfully bridgescomplex markets within and between Asia Pacific, Europeand the Americas.Market Intelligence is our core competence. A profound understandingof market conditions, product and applications expertiseis our trademark. We combine marketing and logistics skillsand enhance them through unique networks established over acorporate history of one and a half centuries.DKSH is the preferred outsourcing partner for quality companiesexpanding their business in complex and demanding growthmarkets.DKSH: Thinking globally. Acting regionally. Selling personally.DKSH provides market entries into Asia, Europe and the Americasthrough a wide range of partnerships for:– Medium-sized enterprises with innovative, high-quality products.DKSH provides comprehensive solutions for all aspects of marketing,brand-building, sales and distribution.– Multinationals aiming at outsourcing of logistics, distributionand order fulfillment. DKSH provides a comprehensive pan-Asiandistribution network covering modern and traditional trade.Key FiguresDKSH generated in 2005 gross revenues of CHF 7,454 million andemployed over 20,500 specialized staff incorporating no lessthan 48 nationalities. The Group operates in 35 countries througha coordinated network of 310 business locations across Asia andanother 15 in Europe and the Americas.Ranked by sales and number of employees, DKSH, headquarteredin Zurich, is among Switzerland’s top 20 companies.Zurich, May 2006

Milestones –Swiss business with strongAsian rootsThe proud history of DKSH Holding Ltd. dates back to the1860s, when three Swiss entrepreneurs ventured to Asia:Wilhelm Heinrich Diethelm journeyed to Singapore, EdwardAnton Keller chose the Philippines, while Hermann Siberheaded for Yokohama. The three men built flourishingtrading houses which over time became major players inSouth East Asia, in the eastern Asia Pacific region, in Japanand in China. The Diethelm Group and the Keller Groupjoined forces in 2000. Two years later, SiberHegner andDiethelm Keller’s Asian business were brought togetherunder the DKSH banner to form a truly unique pan-Asianmarketing, sales and distribution company.1865 Founding of Siber & Brennwald, the precursor of the Siber-Hegner Group, in Yokohama1868 Edward Anton Keller joins C. Lutz & Co., founded in Manilain 1866 and later acquired by Keller1871 Wilhelm Heinrich Diethelm joins Hooglandt & Co., Singapore,established in 1860 and later acquired by Diethelm1887 Founding of Diethelm & Co. Ltd., in SingaporeEd. A. Keller & Co. founded in Manila after the takeover ofLutz & Co. Ltd.1902 SiberHegner enters the Chinese market1906 Founding of Diethelm & Co., Zurich; branch office openedin BangkokTakeover of Singapore-based Swiss trading firm Cadonau &Co. by Diethelm1921 SiberHegner & Co. acquires a small Swiss trading companywith presence in Shanghai1923 Keller acquires Kern Ltd. in Hong Kong1936 SiberHegner acquires German trading house H. Boss & Co.based in Tianjin, China2 Annual Review 2005

1968 Acquisition by SiberHegner of Manchester-based tradingfirm Haycraft and London merchant house L.J. Rickards &Co. Ltd.1998 Acquisition of Cosatec AG by Ed. A. Keller in a joint venturewith Diethelm Group2000 June 16: Merger of Diethelm & Co. Ltd. and Edward KellerLtd. to form Diethelm Keller Holding Ltd.2001 November: Negotiations initiated on the merger of theDiethelm Keller Group’s Asian business with the Siber-Hegner Group2002 June 19: DKSH Holding Ltd. is formed through the mergerof Diethelm Keller Services Asia Ltd. and SiberHegner HoldingLtd., with annual revenues exceeding CHF 4 billion,approx. 13,000 employees and an EBIT of CHF 50 millionAcquisition of consumer goods business of East Asiatic Co.in Malaysia2003 Acquisition of KOSE Logistics, Korea2004 Acquisition of Medinova Ltd., Zurich, a specialty pharmaceuticalcompanyAcquisition of EAC Transport (Malaysia) Sdn Bhd, a leadingforwarding agentAcquisition of United Housewares Pty Limited, an Australianmarketing and distribution company of premiumhousehold goodsOfficial opening of the Corporate Shared Services Center,Kuala Lumpur, Malaysia2005 Opening of two major, state-of-the-art distribution centersin Vietnam and SingaporePublication of the history of DKSH, entitled ‘The FantreeCompany’Consumer Goods Business Unit continues strategic forwardintegration into the luxury and lifestyle retail segmentDKSH-owned boutiques open in several major Asian citiesfor Roger Dubuis and new partner Porsche DesignAnnual Review 2005 3

From HamburgDo you wish you could marketand distribute your products downunder, but because of the cost andstaggering complexity of doingso you’ve had second thoughts?This is where we come in.Our global marketing and distributionnetwork is one of the world’sbest. We know the unwrittenlaws of the marketplace, from Hamburgto Sydney, from New Yorkto Mumbai, and every point inbetween.

We have pioneered bridge-buildingbetween Europe, the Americas andAsia for over a hundred years.No one knows consumers, localrules and regulations – all thethings that give pause to the unwarynewcomer – better thanwe do.Globalization has flattened theworld and made all previouslyuntapped markets accessible tothose with the courage to act.To Sydney

To our Shareholders andBusiness PartnersDear ShareholdersDear Business PartnersThere is no other way to say it, we had an outstanding yearin 2005. Sales were up 29%, our EBIT was 39% higherthan in 2004 and this after all synergistic benefits fromthe initial creation of DKSH in 2002 had been fully realized.What is more, all of our growth was self-generated,without new acquisitions. 2005 was a year of consolidationand integration of the acquisitions of previous yearsin which we brought economies of scale and efficiencyimprovements fully to bear. We are pleased that ourbusiness model has withstood the test of time and demonstratedits ability to boost sales performance in all ourBusiness Units and raise our corporate margin at the sametime.DKSH Group in 2005: Key Figures2002 2003 2004 2005Total Sales 4,679 5,377 5,803 7,454Net Sales 3,856 4,075 4,495 5,149EBIT 57 64 77 107Assets 1,777 1,842 1,923 2,274Specialists 14,608 17,567 19,635 20,695DKSH Group in 2005: Key Figures (excluding real estate)2002 2003 2004 2005Total Sales 4,675 5,371 5,796 7,447Net Sales 3,853 4,069 4,489 5,142EBIT 56 62 74 101Assets 1,742 1,807 1,890 2,234Specialists 14,587 17,546 19,614 20,679money figures in CHF millionFrom pharmacies to boutiques to supermarketsLast year we pushed ahead with new corporate initiatives.We got involved more deeply in brand ownership in thehealthcare sector. We entered a strategic partnership forAsia with an important manufacturer of dermatology productswhile in Indonesia, another strategic partnership –this time with a leading healthcare distributor – made ourhealthcare distribution system even stronger.In nature, growth prompts cell division. Our ConsumerGoods Business Unit brought forth a new segment in similarfashion: As our portfolio of lifestyle-related businessesgrew it started to make sense to assign it to a segmentof its own. Named Luxury & Lifestyle, it is under newlyappointed leadership and reports to the CEO directly. Wealso accelerated the strategic forward integration intoretailing, initiated in 2004.Today we retail watches and lifestyle products throughour own Chronos and Noblehouse multi-brand boutiques,and world-famous luxury brands in our single-brandboutiques. Both kinds of DKSH boutique have openedthroughout Asia’s major cities. The point of our expansionstrategy into luxury and lifestyle products is to completethe cycle and build a single, continuous bridge from themanufacturer right to the consumer. Not only are we nowa highly reputed wholesaler but retailer and brand-builderas well. The reason why our retail outlets are doing sowell is that we only employ quality sales personnel withhighly developed people skills. We make sure they reallyknow their product and are able to assist the most discerningshoppers with expert advice and counsel.6 Annual Review 2005

Thanks to constant improvements in operational efficiencyand the unflagging attention we pay to the needs of ourprincipal trading partners, our Fast Moving ConsumerGoods segment – our strongest growth engine – kept hummingright along in 2005. For instance, we made furtherupgrades to our already cutting-edge warehousing anddistribution setup and to our IT infrastructure. The upshotis that ours is the new industry standard by which ourcompetitors are measured.The fine art of sourcingIn our business, standing still can be fatal. That’s whywe strive to continually improve business processes andunderlying organizational structures. This led us to forma new Business Unit, Specialty Raw Materials, out of ourBusiness Units Food & Ingredients and Specialty & LifeScience Chemicals. Both Units were similarly devoted toknow-how-driven sourcing and product development forcustomers seeking special raw materials. Synergies havebeen emerging ever since the creation of the new Unit: Itsmarket power and coverage today are greater than thoseof both its predecessors combined.The achievements of our four Business Units are describedin detail further along in this report. Let us merelysay that each dealt with many formidable challenges successfullyand delivered another record year. ConsumerGoods, our largest Unit, deserves a special mention: Itssales rose yet another 30% from an already industrydominatinglevel and 2005 profits were up an even moreimpressive 35%.The move has opened the door to other growth-promotinginnovations as well. We are now able to respond withauthority to the recent trend away from national distributionstrategies to integrated solutions for the entireregion. Most of today’s principals want one deal for thewhole of Asia from a partner able to provide one-stopshopping for all the services they need. Thanks to ouradvanced information technology we are uniquely positionedto offer marketing, sales, distribution, logisticsand after-sales service solutions for individual countriesor across the entire Asian region.Our principals have many legitimate questions. Whatdo their customers buy? How do they feel about specificproducts, how do they react to marketing campaigns? Howmuch stock is there? How long do products sit on the shelf?What do hospitals and drugstores really need? Our globalSAP template project provides the base for comprehensiveanswers: Soon they will be able to obtain all the informationthey need from every part of the world in which theydo business with us, information that conforms to a single,uniform standard, making direct country-by-country, outletby-outletcomparisons possible for the first time withoutfuss or bother. The power and reach of our distribution networkprovides truly unmatched exposure and market access.Cutting-edge ITHowever, the biggest challenge facing our organizationtoday is providing management with the tools needed tonavigate our dynamically growing company through thecliffs and shoals of ever-more-complex transactions andprocesses, which size only magnifies. In addition, we needto make our growth sustainable. The challenge is real:From the time DKSH was established three and a halfyears ago to the end of 2005, our workforce of specialistshas grown 42 %, sales by 59% and our earnings by 88%.To provide these tools we took the all-important stepof placing every one of our IT-driven processes and servicesunder a single roof in a new Corporate Shared ServicesCenter in Malaysia. It enables us to deploy a considerablymore sophisticated, unified global IT infrastructure thatdrives a set of equally unified processes in all our businesslocations around the world.Annual Review 2005 7

DKSH – outsourcing partner of choiceAnother way to look at the advantages of a unified systemis from the point of view of outsourcing. SMEs andmultinational companies realize that assigning non-corecompetences to specialized service providers is becomingincreasingly attractive for two reasons. As specialists, serviceproviders are better at it and because they do moreof it, they can do it more efficiently, which means at alower cost.EBIT by Business UnitConsumer GoodsHealthcareSpecialty Raw MaterialsTechnologyTotal Sales by RegionThailandOther AsiaMalaysiaGreater ChinaEurope and AmericasJapanSingaporeThere is no doubt that today’s principals analyze valuechains more acutely and in their entirety, and handle theparts they do best – their core competences – in-house.This means more often than not that they prefer to leavelogistics, area-wide distribution, invoicing and cash collectionto others who specialize in this. Sounds like they aretalking about us, doesn’t it?Of course we are not the only ones. We have our competitorstoo, be they local, regional or international. However,no one beats us for service diversity and quality,geographic spread and total market coverage in theregion. Size is key in our industry and DKSH is the No. 1outsourcing partner for marketing, sales, distribution andlogistics in Asia. We know how to manage fast movingconsumer goods, pharmaceuticals, technology productsand specialty raw materials and how to best respond tothe special requirements of each. Furthermore, we arethe only service provider to offer last-mile distribution tothe hundreds of thousands of retail outlets in Asia, frombig supermarket chains to the smallest stores.To sum up the advantages of a global IT structureidentical in every part of the world we cover, it allows usto provide a wider range of state-of-the-art services anddo so more cost-efficiently because of our size. To differentiateourselves as the service provider of choice means,among other things, managing growing cost pressure.That’s why we began rolling out the global standard initiatedin early 2006 with the greatest possible speed. Wenamed the project – appropriately we think – Pegasus,and have every expectation that it will be the horse thatwill truly make us fly.Financial management for sustainable growthTo make the kind of dynamic growth we are experiencingsustainable takes wise financial management. Our topexecutives need financial and business controlling toolscommensurate with a business of our size. Our new CFO,Stuart Davy, has made remarkable progress in helping usto better understand and control our financial options.Grooming a new generationAnother vital aspect of sustainable growth is long-termmanagement continuity. Our solution is two-fold, first todevelop a pool of in-house candidates by inviting promisingyoung people to attend our own training programs –joint ventures we developed in cooperation with renownedgraduate business schools. At the same time, weare proud that many ambitious managers and specialistsseeking careers in Asia consider DKSH their employer ofchoice.8 Annual Review 2005

140 years – and the story is just beginningWhile shaping the future of the Fantree Company wealso take time out to look back with pride on some of ourhistoric achievements. In 2005, we celebrated 140 yearsin Japan, the longest continued presence of any foreigncompany in that country. We commemorated the eventtogether with our business partners in an official ceremonyin early 2006. Also at the beginning of 2006 ourThailand operation, our largest Asian entity, held its centenarycelebrations in a memorable event attended bythe Royal Household.People make us who we areIn the final analysis, ours is a people business. While we arewell on our way in establishing the Fantree as an internationallyrecognized service brand, we own no physicalproducts, and the sole purpose of our infrastructure is tofulfill our outsourcing and service commitments. We areproud of our highly professional organization, its strongculture of excellence and continuity and the specialiststhat make up our workforce. We realize that today almostevery company with more than a couple of employeessays the same thing: People are our most important asset.We make this claim and take it seriously. Our co-workerscome from 48 nations and many different races and religions.They are the essence of the Fantree Company, theyare the source of energy that drives us forward. We wantto take this opportunity to thank them for their unrelentingefforts and great commitment. We can be proud ofthe success we achieved together and have every reasonto look forward to the future with confidence.Highlights 2005– Total Sales up 29% to CHF 7,454 million– Net Sales up 15% to CHF 5,149 million– EBIT up 39 % to CHF 107 million– More than 1,000 new jobs createdAdrian T. KellerChairmanDr. Joerg W. WollePresident & CEOAnnual Review 2005 9

WestSouth

NorthAny manufacturer’s dream cometrue! Someone able to take overmanaging and controlling theentire value chain to the other sideof the world, from airports andseaports to distribution to millionsof end users.EastWe heard you loud and clear. Letus be your compass for penetratingthe markets to the east, west,north or south of you – or all ofthe above.

An Efficient Organization –firmly establishedDKSH Holding Ltd.Dr. Joerg W. WolleGonpo TseringStuart DavyAndreas MoelichBoard of DirectorsAdrian T. KellerChristophe R. Gautier*,**Dr. Jean-Pierre Blancpain*Jean-Daniel de Schaller**Andreas W. Keller**Dr. Rolf A. Meyer*Beat NaefDr. Joerg W. WollePresident & CEOSen. Executive Vice PresidentOperations & Business SupportExecutive Vice PresidentFinanceExecutive Vice PresidentHuman ResourcesChairmanVice ChairmanThe DKSH organizational structure cuts right through thecomplexity of the businesses it manages. We designed it tomeet the strategic goal of leveraging the wealth of knowledgeand market power available within our organization,across national borders and entire regions, for the benefitof all stakeholders.Our business activities are managed through highly specializedBusiness Units, each catering to specific industrysectors. Country organizations implementing Business Unitstrategy provide regional coverage. They do so with thesupport of a lean head office that provides all of DKSHwith services and a cost-effective, state-of-the-art, Groupwideinfrastructure.We established our Corporate Shared Services Centerin Kuala Lumpur to standardize and centralize DKSH’s ITplatform as a global IT hub. Our comprehensive sourcingand distribution network across Asia Pacific, Europe andthe Americas serves hundreds of thousands of businesspartners every day.LocationsHeadquartersZurich325 offices in 35 countries* member of Audit & Finance Committee** member of Nomination & Compensation Committee12 Annual Review 2005

President & CEODr. Joerg W. WolleBusiness UnitConsumer GoodsN.J. HolmS. PrasitjutrakulDr. M. BraunBusiness UnitHealthcareDr. G. OelkersBusiness UnitSpecialty RawMaterialsB. HellerW. SchanzenbachBusiness UnitTechnologyW. BrenneisCh. EnderleL. MitchellAsia PacificAustraliaBruneiCambodiaChinaHong KongIndiaIndonesiaJapanKoreaLaosMalaysiaMyanmarPhilippinesSingaporeTaiwanThailandVietnamEuropeDenmarkFranceGermanyGreat BritainItalyNetherlandsNorwaySpainSwitzerlandTurkeyAmericasChileUSAAsia PacificAustraliaBruneiCambodiaChinaHong KongIndiaIndonesiaJapanKoreaLaosMalaysiaMyanmarPhilippinesSingaporeTaiwanThailandVietnamEuropeDenmarkFranceGermanyGreat BritainItalyNetherlandsNorwaySpainSwitzerlandTurkeyAmericasChileUSAAnnual Review 2005 13

anythingDon’t let the complexity of foreignmarkets intimidate you. Notwhile there are specialists such asDKSH.We market and distribute to thefar reaches of the world,from single products to batches ofproducts, from consumer goodsto capital investment goods. Wesource, we market, we providelogistics and capillary distribution.Together or individually.

And the best part is that thanksto economies of scale we can do itbetter and at less cost.We provide manufacturers in avariety of industries with anend-to-end supply chain or anypart thereof, we distribute inthe world’s major cities, in the remotecountryside, even to themost isolated beach cabaña. Yes,our roots are in Switzerland,but we are truly at home in Asia.anywhere

The DKSH Star Concept –key to a successful market entryWe help medium-sized companies and multinationals enterthe promising but challenging markets of Asia, Europeand the Americas and frankly, we have become quitegood at it.Multinational corporations outsource distribution, logisticsand order fulfillment to us; medium-sized companies,with innovative, high-quality products to sell, takeadvantage of our one-stop regional marketing, sales anddistribution coverage.We create measurable added value for our principals.Our STAR concept explains how we apply our vast marketknowledge and experience to the task.SWorldwideTop SpecialistsWe put teams of specialists with outstanding track recordsin marketing and distribution to work on your behalf.Their technology, product and applications know-how is –in a word – extensive.Access to MarketsBacked by powerful personal networks and our own, pan-Asian regional structure, we help our principals gainaccess to even the most daunting markets and then, increasetheir market shares.RTotalervicesWe offer value-adding service packages in the form of topclass,highly cost-effective channel-to-market solutions.eliabilityOne reason for the strength of our Fantree brand is reliability.Accounting for a good part of it is the unmatched quality ofour products and services.Services:Market IntelligenceGlobal SourcingMarketingSalesToll ManufacturingIn-LicensingWarehousingDistributionLogisticsAfter-Sales ServicesApplications ResearchProduct DevelopmentQuality AssuranceFinancingInsuranceProject ManagementOrder FulfillmentTerritory ManagementWarranty ServicesImportationRegistration/ComplianceApplications SupportTrainingFairs/Exhibitions/SeminarsInstallation/CommissioningRental/LeasingInformation ProcessingMarket FeedbackWe are the trusted linkthat connects principals tocustomers.We are the outsourcingpartner of choice of manymedium-sized companiesand multinationals who entrustus with sourcing,marketing, sales, distributionand logistics.Our unique business model isbased on deep market penetration,our brand-buildingexpertise and the outstandingresults we deliver asinformation brokers.Our comprehensive servicepackages and one-stopsolutions are available for allof Asia. Interestingly,principals whose productswe market often becomecustomers for raw materialswe source for them, andvice versa.16 Annual Review 2005

Corporate Values –what makes the Fantree Companyunique?For our principals and business partners throughout theworld, the four letters DKSH stand for trust, accountability,professionalism and uncompromising integrity.The Fantree Company’s reputation is based on a consistentrecord of building successful long-term partnerships.Creating successful partnerships between DKSH andits principals and the communities in which it operates isthe foundation for our being the leading marketing anddistribution company in and for Asia.We have the strength, strategies and resources to driveour business forward to generate sustainable revenue andprofit growth.The Group is privately held. Members of the fourth andfifth generations of the respective founding families areactive on the Board of Directors. The company is majorityownedby the Diethelm Keller Group, an internationallyactive Swiss holding company.DKSH is what its people practice: we live and operateby a set of business principles and values that have beenupheld over the generations ever since our founding days.1 LeadershipWe inspire confidence and enthusiasm. We get thingsdone.2 PartnershipWe build long-term partnerships that last, based onmutual trust, respect and fairness.3 RootsWe preserve the glow and not the ashes – that is whattradition means to us.4 IntegrityWe build on sound and proven business practices. Wedeliver what we promise.5 CommitmentWe are here to stay, accountable in both good and difficulttimes.Annual Review 2005 17

Consider us a network that connectssuppliers and customers anywherein the world, from Zurichto Kuala Lumpur, from Londonto Bangkok, from Baltimore toBeijing.365Now consider that we keep ournetwork humming twenty-fourseven, every month of every year.Sounds just like what you needto break into markets until nowinaccessible to you, doesn’t it?Why not give us a call?7

Consumer Goods in Asia –about being No. 1Business Unit Consumer Goods2002 2003 2004 2005Total Sales 2,033 2,884 3,245 4,218Net Sales 1,771 1,989 2,254 2,609EBIT 35 38 48 65Assets 504 632 703 938Specialists 8,538 10,474 11,449 12,229money figures in CHF millionYour one-stop distributorIn Asia as anywhere else, distribution of fast moving consumergoods and luxury and lifestyle products is best handledby someone with clout and we are the clear industryleader, not just because we deal with all trade channels,but because we offer a complete service package.Our principals have a choice of any or all of the following:sales, merchandising, marketing, distribution, logistics,invoicing and debt collection, whether country by countryor in all of Asia.No wonder local and international brand owners withan interest in the fast-growing Asian markets prefer theundisputed No. 1, DKSH. More than 12,200 employees in285 offices in 19 countries serve over 300,000 retail outletsof all sizes, from giant supermarket chains to boutiquesand mom-and-pop stores. Not only are we Asia’s biggestdistributor, we deliver more cases to more drop pointsthan any other logistics provider in Asia Pacific.Dealing with complexityTo operate with even greater transparency and efficiency,we restructured our Consumer Goods Business Unitto better differentiate between Fast Moving ConsumerGoods and Luxury & Lifestyle. Somboon Prasitjutrakul andNiels J. Holm were both appointed Executive Vice Presidentsin charge of the Group’s Fast Moving ConsumerGoods business and Dr. Marcel Braun is our new ExecutiveVice President for Luxury & Lifestyle.We made major investments in the forward integrationof the latter sector by opening a series of top-class boutiquesfor luxury brands all across Asia. Success wasn’t longin coming. Consumer Goods sales were 30.0% higher yearon year, and the unit’s EBIT was up 35.4%.Let’s first look at high-volume, large-coverage FastMoving Consumer Goods, followed by the Luxury & Lifestylesegment.20 Annual Review 2005

Fast Moving Consumer GoodsWe are the only marketing, distribution and logistics outsourcingpartner for fast moving consumer goods withblanket coverage of all Asian markets, from highly industrializednations such as Singapore and Hong Kong, to theemerging economies of Laos, Cambodia and Vietnam andeverywhere inbetween.As a rule, even major multinationals account for only arelatively small part of Asia’s product basket. We are in aposition to make a significant difference in any such situation.And because new retail outlets, new retail chains,local and international, appear all the time, distributionand logistics have become a matter for the experts. Today,supply chain management is more important thanever, particularly when it comes to fast moving consumergoods.One more thing to remember: because we dispose ofthe requisite size and market power, we are in a better positionto counter the buying power and the pricing andlisting-fee pressures of big chains. At the same time, wedeal with traditional retailers in a way that is equitableall the way around.The 21st century has come to distributionAccurate data on the state of the markets, on sales, distributionand stocks, all generated using common parameters,are vital management tools to which we takerecourse every day. So far so good, but what about ourprincipals? They are at least as interested in this informationand they, too, need it in a form that allows it to flowinto their spreadsheets for planning and decision-making,without tiresome conversion of data which can distortresults.That is why last year we spent considerable time and resourcesin developing and documenting common practices,standard operating procedures and key performance indicatorsacross the various countries in anticipation of theroll-out of a global SAP standard, which begins in Aprilof the current year. Soon all our business partners will beable to access tracking and stocking information online,from anywhere in the world, and make like-to-like comparisons.2005 in briefSingapore may be a mature market but, thanks to severalmajor new accounts, we kept on growing nonetheless.In 2006 we intend to focus on expanding and improvingour logistics infrastructure and on implementing SAP. Lastyear’s focus in Korea was also on logistics. We grew by onethird year on year and expect more of the same this year.We strengthened our management in Hong Kong andare transferring best practice to the Hong Kong, Chinaand Taiwan markets. We are also in the midst of severalefficiency and infrastructure improvement projects andcontinue adding new businesses and services at the sametime. In Taiwan we acquired several new agencies to addto our distribution portfolio and our new distributioncenter in Longtan, with a capacity of 13,000 pallets, isnow open for business.After proving its mettle as third party logistics provider,our Philippines branch graduated to being a full-distribution-serviceprovider. In Malaysia we acquired several newagencies. Route-to-market realignment boosted sales, inpart due to more efficient use of ProNet in-market salesdistribution management. To better satisfy the needs ofour principals we restructured our key account management,added more key account managers and centralizedmerchandising services.Annual Review 2005 21

Capitalizing on our Asia-wide network2005 was a golden year in Thailand, Vietnam, Cambodia,Myanmar and Laos. An extended product and services portfolio,major new accounts in Thailand and Vietnam anddouble-digit sales growth firmly put their stamp on theyear. Increasingly, we provide our services to local Thaiagencies, often distributing their products not only in Thailand,but exporting them all across Asia.In Thailand we are known by our original companyname of Diethelm. After a hundred years in that country,we felt the time had come to thank our esteemed retailersand consumers for one hundred years of partnership bystaging the Diethelm Fair and with Gold Rush, a consumercampaign. A welcome side-effect was the rise in sales fromthe publicity the two initiatives generated.Construction of our new distribution center in Bangkokstarted in late 2005. Our almost-as-new Vietnamesedistribution center opened in February 2005. The addedcapacity and state-of-the-art infrastructure of these newfacilities will help us raise the quality of the services weprovide for our suppliers and the retail trade to an evenhigher plane. At the same time, the new distribution centersare vital for extending our strong position in these keymarkets.Luxury & LifestyleLuxury & Lifestyle, comprising watches, writing instruments,apparel, hair and skin care products as well as premiumhousehold goods, has its own, dedicated strategy.Last year we accelerated the strategic forward integrationinto the specialty luxury and lifestyle retail segmentstarted in 2004.Across Asia we operate our own Chronos and Noblehousemulti-brand boutiques for watches and lifestyleproducts, as well as single-brand boutiques for ManufactureRoger Dubuis, Porsche Design, Dunhill or Montblanc.Together, these outlets represent a vital part of our luxuryand lifestyle expansion strategy, right to the consumer,which turns us into retailers and brand-builders, in additionto our well-established position as wholesalers. Superb salessupport, advice and service makes shopping at our exclusiveboutiques a pleasurable experience for today’s highly discerningcustomer.Manufacture Roger DubuisAs the exclusive distribution partner for Asia, for the pasttwo years we have opened flagship stores for RogerDubuis luxury watches and jewelry in Jakarta, Singapore,Hong Kong, Bangkok, Kuala Lumpur and Tokyo and shopsin-shopsin multi-brand stores in all major Asian cities.We intend to open more boutiques and departmentstore shops-in-shops in 2006.Porsche DesignIn 2005 we were appointed Asian master franchisee forPorsche Design. True to the slogan of Porsche as ‘the engineersof passion’, our boutiques create an environmentby displaying that brand’s leather and vinyl luggage andaccessories, watches, writing implements, smoking accessories,pocket knives and fashion items, catering mainly toa male clientele.Porsche Design products are produced under license byworld-class manufacturers including Mueller & Meirer (luggageand accessories), Eterna (watches), Faber-Castell (writinginstruments), Rodenstock (eyewear), Wenger (pocketknives) and Royal Dutch (smoking accessories). Last year weopened our first Porsche Design Boutique in Vietnam’s HoChi Minh City, followed by another in Kuala Lumpur, aswell as two Tokyo flagship stores, one in the Ginza, onein Omotesando, and another in Osaka. This year in April anew boutique opened its doors in Bangkok, with one moreon the way. Singapore and Seoul will soon have boutiquesof their own as well.Premium household goodsAs distribution market leaders in this specialized field,we chalked up excellent results in Australia and Korea,thanks to prestigious international brands such as J.A.Henckels and Zyliss.22 Annual Review 2005

Food & catering services2005 was a very good year for our food & catering servicesbusiness, which provides luxury hotels, restaurants, clubs,airline caterers and bakery chains with premium grade,semi-finished pastry products, imported coffee and teabrands and the machines to go with them.In Macao and China, opportunities for growth are staggeringand we fully intend to take advantage of them. Wealso want to grow even stronger in Hong Kong and buildour business in Malaysia one step at a time.Levi’sUnder our licensing agreement with Levi Strauss of theUS, DKSH Thailand’s Fashion Apparel business manufacturesand markets a full range of men’s and women’stops and bottoms of the Levi’s brand, as well as similarlybranded accessories. Backed by its marketing, merchandisingand sales departments, the business operates sewingand laundry operations, a distribution center, handleslogistics and R&D, and services all Levi’s retailers.To maintain the momentum generated in years past,in 2005 we launched appealing new men’s and women’sproducts, with the most successful among them in premiumfashions. Our new Women’s Fit range was particularlysuccessful. But because new products alone cannotattract enough additional customers, we ran advertisingand marketing campaigns to spotlight the recent arrivals.Realizing the need for appealing stores, conducive tofull shopping enjoyment, we made major investments inupgrading our existing stores and in new retail outlets,three of them last year alone. This brings the number ofDKSH-managed Levi’s stores to 19. We also control 101 departmentstore counters across Thailand. We are launchingseveral exciting new lines this year, particularly inyoung people’s apparel. High-profile marketing and salescampaigns are sure to stir up extra excitement.2006 is the Year of the Dog. If the pooch continues tohappily wag his tail, local economies will grow, tourismwill flourish and consumer confidence will stay high. Inshort, auguries are good for another record year for Levi’sin Thailand.Annual Review 2005 23

Local and international brandowners entrust us withbuilding up brand equity andestablishing these brandsin the markets of Asia. Wehandle merchandisingand trade promotions in allmanner of retail outletsand operate counters andshops-in-shops in departmentstores.

We operate a marketing,sales and distributionnetwork so extensive it coversthe entire Asian region.We make sure retailers haveour principals’ fast movingconsumer goods in stock atall times, whether in highlyindustrialized Hong Kong orpioneering Cambodia. DKSHgives brand owners accessto all trade channels, modernor traditional – serving morethan 300,000 retail outletsevery day.

Strategic forward integrationinto the luxury andlifestyle retail segment, initiatedin 2004, led us toestablish top-class boutiquesin Asia for several prestigiousbrands. For instance,as exclusive distributionpartner we operate our ownstores and shops-in-shops forManufacture Roger Dubuisin all major Asian cities.

We manufacture and marketa full range of Levi’sjeanswear in the Thai marketunder license from LeviStrauss. The collections are retailedin 19 DKSH-managedLevi’s stores and at 101department store countersall across Thailand.

We manage and control thecomplete value chain,starting with bulk arrivals ofpharmaceutical productsat the harbor. We thenpackage each order individuallyin our distributioncenters for delivery to Asia’shealthcare industry. Thedifferent-colored jacketsworkers wear identify areasof responsibility such asstocking, order picking ordispatch.

We deliver pharmaceuticals,life-saving drugs, diagnosticand medical equipmentand consumer health productsdaily to hundreds ofthousands of doctors, hospitals,pharmacies anddrugstores throughout Asia.

For the chemical, pharmaceutical,food, beverage andpersonal care industrieswe source hard-to-find rawmaterials around the world.Serving customers andsuppliers alike, our industryexperts invariably spotmarket trends early, developnew ideas and conceptsand provide sophisticated,custom product developmentand applicationservices.

One key to customer satisfactionis quality control andquality assurance. Backedby our own laboratories wedeliver top product andservice quality using standardized,validatedtesting methods that meetthe most stringent localand international qualityspecifications.

Small and medium-sizedEuropean suppliers of topnotchtechnology productswho do not have theirown sales and service networkin Asia, rely on DKSHfor marketing, sales, applicationengineering andafter-sales services oftheir sophisticated, specializedcapital investmentgoods. This sterile filling andpackaging line serves Japan’sdairy industry.

We want our customers tobe satisfied with the equipmentthey buy from us.The diesel generator insidethis freighter at a Thaiport is about to be servicedby one of our own, highlytrained technical and aftersalesservice engineers.A reasonably priced maintenancecontract covers hismeticulously executed work.Anytime there is a problem,our service personnel and anextensive spare parts inventoryare always just a phonecall away.

Healthcare –gateway to Asia’s medical andconsumer health channelsBusiness Unit Healthcare2002 2003 2004 2005Total Sales 1,534 1,600 1,629 2,181Net Sales 1,317 1,402 1,512 1,748EBIT 14 15 19 20Assets 456 469 489 657Specialists 4,157 5,259 6,147 6,383money figures in CHF millionHow can we help?Product registration? Product distribution? Marketing?Sales? Toll manufacturing? If you’re in the pharmaceuticaland healthcare industry and wish to access the world’sfastest-growing markets in Asia, choose the DKSH HealthcareBusiness Unit. Some 190 international principals havealready done so. 6,400 specialists, over 3,000 of them medicaland sales representatives with specialized local knowledge,are ready to serve you at 170 offices in 14 countries.We work closely with regulatory authorities and knowall ethical, consumer health as well as diagnostic and medicalequipment channels inside and out as we serve over430,000 medical and consumer health customers day afterday. Having done business in Asia for 140 years, we are nowits leading healthcare commercialization and outsourcingpartner and operate the largest marketing and sales organizationthere. Complementing this vast network is ourown Medinova Ltd., located in Switzerland, which facilitatesin-licensing of pharmaceutical products.Growing the franchiseThe blistering growth rate of our Healthcare Business Unitin this millennium continued into 2005. Sales were up 33.9%and in spite of major investments in infrastructure, systems,in-licensing operations and ongoing improvements, plusone-time investments in China and the Philippines, theUnit’s operating profit rose another 5.3%.Our sales performance mirrors Asia’s extraordinary marketgrowth. We may have lost three big contracts out ofover 700 in the 14 markets we cover, but more than madeup for it with a record CHF 400 million in new business onan annual basis. Clearly, our principals highly appreciateour value-adding solutions. The vendor managed inventorysolution we provide in China is a good example. A consignmentstock tracking system for medical device productsin hospitals, it gives a clear picture of consumptionand remaining stock in a service others don’t provide.34 Annual Review 2005

Flexing our market musclesWe are the acknowledged healthcare product distributionleaders in much of South East Asia and in pioneering countrieslike Cambodia, Laos, Myanmar and Vietnam, whichmakes us true regional partners. In Taiwan we boostedour market share by partnering with local distributorsMay Wu Fa.The best evidence of our market expansion strategyhowever is the entry into Japan. Our focus there is on distributingJapanese healthcare products in South East Asiaas we draw on our strong regional and pan-Asian distributionnetwork. In addition, our drug manufacturingfacility in Thailand serves Japan’s healthcare industry astoll manufacturer. Reactions from our international partnersshow how much they value our fast-growing Asianmarket presence and the bridges we built and maintainbetween Asia, Europe and Japan.A joint venture with Spirig, Switzerland’s leading dermatologicalcompany, makes us that company’s Asia Pacificlicensing partners. The venture underscores the growingimportance of the DKSH Healthcare Business Unit as leadingcommercialization partners for Asia.Regional accomplishmentsOur traditional strongholds in Thailand, Cambodia, Laos,Myanmar, Vietnam and Hong Kong exceeded performanceexpectations while in Taiwan, Singapore, Switzerland andMalaysia we met our targets fully. Also in 2005, we madeone-time investments in repositioning our operations inChina and the Philippines to promote further growth. Thefirst phase of a re-engineering project in Taiwan has generatedsignificantly elevated profitability while improvingour market position.Following our initial year in Indonesia, where we establishedthe first fully foreign-owned distribution entity, wedetermined that the most efficient way to conquer thatcountry’s market is to merge DKSH Healthcare Indonesiawith a local partner, PT Tunggal Sila Farma. The new entity,PT DKSH TUNGGAL, is expected to start operating inthe course of 2006.We bring to the partnership 140 years of Asian experienceand our reputation as the strongest commercializationorganization in Asia’s outsourcing industry and itsleading distribution services provider. Our global IT servicescenter implemented our Group-wide SAP template inIndonesia in record time. Our partners have been key playersin the country’s healthcare community for over 50years, maintain a country-wide branch and customer networkand know the local marketplace intimately. Togetherwe are well placed to provide our principals and customerswith that potent combination of cutting-edge solutionsand local know-how.Aspiring to be recognized as industry thought leaders, in2005 we were again lead sponsors of the Economist Conferences’7th Asia Pacific Pharmaceutical Roundtable, heldin Singapore last November.Also in 2005, we continued to invest in the quality ofour combined leadership by recruiting from major pharmaceuticalcompanies additional, top-grade managerial talentwith vast pharmaceutical expertise in Asia.A promising futureImproving our Healthcare Unit’s already outstanding functionalexcellence in cost control and execution is a dauntingtask, to be sure. But improve it we will because we knowour continued success depends on it. As the healthcareindustry evolves, we want to be ready to serve principalshigher up the value chain. For instance, we intend to domore in-licensing of mature intensive-care products. Wealso plan to strengthen our commercialization capabilitiesin China and expand our foothold in Indonesia.Yes, we face the future with confidence and expectdouble-digit sales and profitability growth to continue forthe rest of the current year and accelerate from there.Annual Review 2005 35

Specialty Raw Materials –sourcing at its bestBusiness Unit Specialty Raw Materials2002 2003 2004 2005Total Sales 488 433 459 525Net Sales 403 367 397 453EBIT 15 19 20 20Assets 132 156 172 194Specialists 717 701 893 959money figures in CHF millionReaping the benefits of synergyOur Business Unit Specialty Raw Materials may be considerednew. But not entirely: It is the result of bringingtogether our Specialty & Life Science Chemicals Unit andour Food & Ingredients Unit. Why? In 2005, evidence ofthe soundness of such a move became self-evident – bothUnits were know-how-driven sourcing and product developmentpartners for customers in the market for specialraw materials. The result is a Business Unit with considerablymore market power than its predecessors combined.Specialty Raw Materials provides the chemical, pharmaceutical,food, beverage and personal care industrieswith premier raw materials from around the world. Ourindustry experts invariably spot market trends early andtheir abilities in sourcing, R&D, quality assurance, marketing,sales, distribution, toll manufacturing brokerage andproject management are unmatched anywhere. It doesn’tget any better than that.Getting in on the ground floorThe number of European companies that outsource Asianmarketing, sales and distribution to us is growing. Andno one knows better where in China, India and Japan toobtain special raw materials for customers who continueto produce competitively in Europe.We recruited more specialists in 2005, almost doublingour manpower in Germany alone. We added more sourcingoffices. The total is now 14, in 11 countries. At year’send, the Unit employed 959 specialists, in 43 offices in 21countries. This expansion is of course still in the investmentstage but initial results show we’re on the righttrack: 2005 sales were up 14.4% and profits matched theprevious year’s.36 Annual Review 2005

New products, innovative concepts and more staffAs suppliers of generic pharmaceutical ingredients and rawmaterials to LCD screen and other manufacturers, theJapan office again contributed the lion’s share of theBusiness Unit’s profits. What’s more, chances are that theingredients of the delicious baked goods and sumptuousdesserts you taste in that country came from us. Thenthere were the record sales of food and dietary supplementscontaining a unique natural ingredient extractedfrom maritime pines in the South of France.In China we added more sourcing specialists, registeredfour more animal care products, sold our first photoinitiatorvarnish systems and record volumes of adhesion promoterproducts to car manufacturers. Our application laboratoryin Thailand came up with an innovative concept ourcustomers used in new ready-to-drink products for thebeverage industry. Sales of personal care products andcosmetics went well and we expect rapid growth in thecoating industry.In the Philippines, much of our tremendous growth camefrom having obtained Halal certification. Our Qur’anbasedHalal certification is applied to foods authorizedfor consumption by Muslims. We mix raw materials in thecountry’s biggest Halal blending facility, and sell them to thebeverage industry, fast food chains and meat processors.Our new personal care and cosmetics application laboratoryestablished itself as a specialized business partner.Products in this line are strong contributors to our bottomline in the Philippines.State-of-the-art supply chain management –prerequisite of successful sourcingOnly state-of-the-art supply chain management and standardizedquality assurance and control can deliver therecord amounts of top-quality fish and seafood productsof guaranteed freshness that we source in Vietnam andexport mainly to Europe and Japan. To keep up our standards,we added more people and resources to our sourcingteam.In Korea we recruited additional polymer intermediatessuppliers and thanks to close coordination with our officesin Japan, we are at the forefront of top-end, high-tech productdevelopment. Malaysia did well last year: We helpeda European supplier of varnish and plastic products meetthe stringent specifications of that country’s automotiveindustry and successfully launched several Chinese agriculturalcommodities. Reactions were highly positive tothe extended chemical and pharmaceutical product portfolioof our sourcing and sales organization in India.Procuring specialties for western manufacturersIn France sales of specialty chemicals for implants wereup and we gained new customers. Activated charcoal forwater treatment, polymer intermediates, active pharmaingredients and ingredients for the cosmetics industryall sold well, while non-GMO soy derivative sales reachedrecord volumes. In 2005 sales in Italy, from unique functionalingredients and non-GMO soy lecithin to coatingsand electronics precursor products, many of them new,took another giant leap.The acquisition of a Danish distribution company in2004 serves as our gateway to the Nordic countries. Itspecializes in aroma products and caters to the food andtobacco industries. More sales of polymer intermediatesmade a major contribution to Germany’s outstanding performanceand, thanks to a newly acquired Korean supplier,sales of thermal paper raw materials were outstandingthroughout the year.In the UK, sales of security, holographic and other highperformanceresin products from Japan produced doubledigitgrowth. This is not to say that cosmetic and functionalingredient sales – always a pillar of our UK operations –did not do exceedingly well.Sales of specialty chemicals and of food and cosmeticingredients produced substantial growth at our US operations.In Chile and neighboring countries, a dedicated teamsources a great part of the processed fruit, vegetablesand other food raw materials sold by our Specialty RawMaterials sales network. Among Switzerland’s highlightsof the year were the addition of more industry experts,establishment of a presence in Istanbul and a big orderfor a key drug intermediate from a blue chip company.What does the future hold?Perhaps the best illustration of our optimistic outlook for2006 is our growing sales force and sourcing network,new product developments and strengthening further thequality of our leadership team. We will continue to reapthe benefits of synergies of the two merged BusinessUnits and we are confident that we have laid the groundworkneeded to accomplish the ambitious goals we haveset for our Specialty Raw Materials Business Unit.Annual Review 2005 37

Technology –solutions that set tomorrow’sstandardsBusiness Unit Technology2002 2003 2004 2005Total Sales 607 451 460 517Net Sales 348 308 323 327EBIT 8 11 16 16Assets 132 139 141 132Specialists 1,196 1,133 1,146 1,124money figures in CHF millionThe DKSH Technology UnitIt may seem obvious, but the reason so many Asian companiesget their machinery or scientific and lab equipmentfrom us is that we put their profitability first. Weare the leaders in our field for two reasons: sourcing networksthat deliver what the customer needs every time,on time and on budget and second, our by-now legendaryfollow-through, from planning to after-sales servicesand on-the-spot training. 1,100 or so specialized staff,sales and application engineers as well as training expertsin 78 offices in 19 countries make sure of it.So who are our suppliers? They come in all shapes andsizes, from the world’s big names in manufacturing, powergeneration, transport, construction, mining, instrumentation,printing, processing, packaging and the hospitalityindustry, to SMEs.In every case they gravitate to DKSH because they areattracted to our added-value services that enable them tooutsource marketing and distribution in all the marketswe cover. Invariably, our suppliers find that not only doour services add value, they are a perfect fit to their ownmarketing, branding, sales and product development endeavors.Onward and upwardIn 2005 our Technology Business Unit matched the previousyear’s excellent profitability, and total sales were up12.4%. What’s more, our expanded product portfolio andcustomer care have become the new industry standard.Sales to manufacturing and general industry, and salesof instrumentation, printing, processing and packagingequipment account for most of the Unit’s growth.How did we do it? By being where our customers andsuppliers need us, when they need us. In 19 countries ofthe world. You want us, you know where to find us – weare here to serve you.38 Annual Review 2005

Asia Pacific on a hot streakIn 2005 the Thai market was booming, our sales and serviceon behalf of Cummins were booming, and so was ourtrade in small to medium-sized construction machinery.Success is earned. Hard work and inspired planning markedlyincreased profitability in Singapore. Sales of analyticalinstruments and machine tools were up and we addedmore consumer-oriented technology to our product portfolio.True, we’re already strong in Malaysia, but we want tobe even stronger. In 2005 we set out to duplicate our successin analytical instrument sales by reorganizing our machinetools sector. In the field of surveying instrumentswe continued to be market leaders, only more so. InIndonesia, we are building a range of products for thegraphic arts, printing and chemical industries.In the Philippines, we further strengthened our marketposition in material handling, refrigeration, analyticaland scientific instrumentation and in food packagingmachines. In Japan, among the best of our establishedmarkets, our main margin contributors were sales of scientificinstruments, packaging machines and graphic arts andprinting industry equipment. Investments in sourcing andselling machinery to the electronics industry have producedpromising results.The 2005 result of our Korean operation deserves thepredicate excellent. Major orders from the automotiveindustry for Buhler diecasting machines, Klingelnberggear cutting machinery and measuring devices, as well assales of machines used in food processing and for laboratoryequipment, were behind this success. Our presentorder backlog allows us to look to the future with confidence.Equally gratifying in 2005 was our performance inTaiwan. Not only did we serve the hospitality industry’s fastfood restaurants, hotels, supermarkets and conveniencestores with much-needed equipment, after-sales servicesand technical support; capital investment goods sales developedin a highly positive way, driven by diecastingmachines used to make laptop housings. We also establisheda new department devoted to machinery sales tothe food processing industry.Solid growth down underIt is always gratifying when results bear out the wisdom ofa strategy. In Australia, our range of electrical cables didexceedingly well due to a collaborative venture with ourpartner Lapp. At its core is cost-effective sourcing in Asiabased on in-house designs and specifications, and salesthrough our own teams and channels. Environmental protectionequipment sales were up significantly and madea major contribution to our steady growth. New is ourentry into the air compression and extraction productbusiness, which takes advantage of the existing distributionchannels of our cable business.Outdoing ourselvesOccasionally, we are the victims of our own success. Wedid so well in China – some might say too well – that a fewsuppliers felt it made sense to start their own distributionnetworks, to the detriment of our own portfolio. Ourreaction was quick: putting renewed effort into sellingquality-control machinery and research instruments alongwith gearing up to market graphic arts and printingindustry equipment and machinery for the food processingand packaging industry. The results speak for themselves:We were highly successful in China in 2005. Notonly did the joint venture, established in 2002 with Germanmachine tool manufacturers TRUMPF, do very well,they recently entrusted us with marketing, selling andservicing their line of laser products.In Europe we experienced a case of too much of a goodthing as orders for top-grade titanium exceeded supply.And while technology product sales to the Far East’selectronics industry continue growing, our operations inGermany, Switzerland, France and Italy are still in theinvestment stage.Getting in shape for tomorrowCertain key members of our Technology Business Unit willreach retirement age this year. We are proud to reportthat we were able to fill these vacancies from our pool ofoutstanding in-house talent. At the same time, we intendto selectively add know-how with individuals from outsidethe company.Our plans for the future are best summed up this way:With an expanded regional distribution network we wantto provide a growing customer base with top-quality productsand services. We intend to expand aggressively,through internal growth and carefully selected acquisitions.There are always acquisition candidates on our radarscreen, but deals often take time to work out when privatelyheld companies are involved.One thing will not change, our strong regional presencein Asia. Our customers like having a single source forthe products and support services they need. What’s more,thanks to our core competences we are ideally poised togrow in emerging and developing economies. In short, atDKSH Technology the future is full of promise.Annual Review 2005 39

traditionallycutting edgeStaying at the top of our game –the cutting edge – has beenour goal for decades, a goal weaccomplish by re-inventingourselves again and again. However,there is one thing wewon’t change, and haven’t in overone hundred and forty years –our values.Our partners in business know thisand rely on us completely as lean,state-of-the-art sourcing, marketing,distribution and logistics providersthat always deliver – literally andfiguratively.

Operations & Business SupportCountry back offices help us stay lean and operate at ourbest; Business Units and country management teams mustinterface perfectly at all times: The individual who helpsmake it all possible is our Senior Executive Vice PresidentOperations & Business Support. Several services are underhis purview:The Corporate Shared Services Center (CSSC)Opened in late 2004 in Kuala Lumpur, the CSSC supportslocal and country organizations. In the first full year of itsexistence, its SAP consultants started to implement projectPegasus, the global SAP template roll-out which bylate 2008 will benefit more than 5,000 users all over theworld. At its core are Unix servers and a sophisticated WideArea Network.In parallel with the Pegasus project, a second teamdedicated to infrastructure issues has managed to re-hostall existing SAP applications. The positive outcome of theirefforts is that the old SAP applications of all eight Europeanlocations, Thailand, Indonesia and Japan are nowhosted out of Kuala Lumpur – well ahead of our plan andprevious service standards.A third CSSC team is in the process of expanding Echo-PLUS for the field forces of our principals and DKSH itself,which together account for over 1,000 users.A fourth team hosts and develops Lotus Notes: Todaymore than 7,000 users across the entire DKSH Group sharethe same e-mail system, databases, address lists – all ina secure environment and based on a common state-ofthe-artcollaboration system. CSSC is on track to achievingits commitment to deliver world-class solutions.Business Process Re-engineering (BPR)The BPR team is the internal DKSH consulting team dedicatedto improving process performance. CSSC is the ITbackbone of this process. BPR supports operations byidentifying key processes of strategic importance to servingour customers and principals and makes sure they arekept at their cutting edge – an important DKSH competitiveadvantage. The most diverse projects were undertakenon behalf of all operations in the course of last year.Expectations were consistently exceeded and resulted insignificant quality improvements, let alone savings.42 Annual Review 2005

FinanceHuman ResourcesThe key focus of DKSH Finance is to support our BusinessUnits to ensure peak efficiency and to monitor observanceof Group financial objectives.Headquarter servicesAt corporate headquarters, a deliberately lean, globallyorientedteam under the leadership of our Group CFO developsfinancial performance targets and monitors theirachievement. The team also makes sure financial and corporategovernance policies are met, particularly as regardsIFRS and accounting policy compliance, treasurymanagement, risk management, taxation, acquisitions andinvestment projects.These policies are promulgated through forums such asthe Group Finance Conference and receive the additionalsupport of country visits in the course of the year. The CFOreports results, suggesting improvements directly to theCEO, and keeps the Board of Directors of DKSH informed.The members of the Finance team are in constant touchwith Business Unit operating units.Their advice and guidance encourage local units to operateaccording to the precepts of best practice. Anotherbig benefit of their work is Group-wide cross-fertilizationwith good ideas and practices.Finance as sparring partnersA fine example of the spirit of enterprise that prevailsacross all of DKSH is our great diversification geographicallyand in areas of business. Country Finance Managersin each country lead a team which has to be a flexiblebusiness partner to the Business Units while at the sametime providing an independent assessment of issues onbehalf of the Corporate Center. Fully conversant with localconditions, financial team members help their BusinessUnits comply with local regulations and DKSH policies.Toward suppliers and customers, the financial teamscontribute to maintaining the optimum balance betweenlocal and global operational needs on the one hand, andcorporate financial policies on the other, thus ensuringmaximum cost and operational efficiency. In the courseof our years of operating in many countries of the world,we have acquired much precious, local knowledge – to thebenefit of our partners around the globe.Only the best professionals can operate effectively in leanenvironments such as those in our Business Units and supportfunctions. Which is where our Human Resources teamcomes in. Its members make sure all employees are fullyup to the tasks at hand. In terms of compensation andbenefits, in 2005 Management by Objectives was takento the next operational level, which ensures that all DKSHresources are channeled in a way that enhances the overallperformance and services of the Fantree Company allaround the globe.Building a strong HR networkAt the first ever meeting of Human Resources Managers inZurich, the team leveraged best practice throughout DKSHwhile taking advantage of the opportunity to strengthenits ties with operations. Business Unit Managers from aroundthe world, the entire Executive Board, and the Chairmanand Vice Chairman of our Board of Directors attended.The highly constructive one-on-one exchanges that resultedno doubt contributed greatly to creating a unified,truly global HR network.Our own talent poolWe strongly believe in upgrading our co-workers’ skill setswith training programs designed for learning, best-practicesharing and network building, not only to help themdo their jobs more efficiently but to create an in-housepool of individuals ready for advancement.In 2005, in cooperation with Cranfield University, weheld our first Logistics and Supply Chain Managers Programin Manila. Cranfield’s Christopher Martin and RichardShaw reviewed case histories and taught best practice toattending Logistics Managers in a one-week workshop.Other training programs, held as part of our long-term jointventure with INSEAD, included the DKSH Fantree LeadershipProgram and the DKSH Fantree Product Managers Program,both tailor-made for DKSH.For a healthy mix of in-house training and fresh ideasfrom the outside, we invest in these four training and developmentprograms while continuing to put financial resourcesinto attracting and recruiting professionals fromoutside the company to fill key positions at DKSH.As No. 1 provider of sourcing, marketing, sales, logisticsand distribution services in Asia, we have no doubtthat in a people business such as ours, developing newtalent is a key success factor for ourselves and our businesspartners.Annual Review 2005 43

DKSH Worldwide Presence –a distinctive footprintAmericasChile1 locationEuropeGreat Britain1 locationUSA1 locationFrance1 locationNetherlands2 locationsNorway1 locationSpain1 locationSwitzerland2 locationsDenmark1 locationGermany1 locationItaly1 locationTurkey1 location44 Annual Review 2005

Asia PacificChina66 locationsAsia PacificHong Kong10 locationsIndonesia72 locationsBrunei3 locationsCambodia1 locationTaiwan7 locationsVietnam12 locationsPhilippines10 locationsSingapore3 locationsKorea5 locationsLaos1 locationJapan10 locationsThailand72 locationsAustralia5 locationsMalaysia19 locationsMyanmar12 locationsIndia1 locationAnnual Review 2005 45

DKSH Offices Worldwide –Asia PacificAustralia5 locations– Contact:Paul ChaplinDKSH Australia Pty. Ltd.14 –17 Dansu CourtHallamVictoria 3803AustraliaT +61-3-9554-6666F +61-3-9554-6677Brunei3 locations– Contact:Niels J. HolmDiethelm Holdings (Malaysia)Berhad74 Jalan UniversityP.O. Box 7746700 Petaling JayaSelangor Darul EhsanMalaysiaT +60-3-7966-0288F +60-3-7957-0829China66 locations– Contact:Dr. Manfred StreuberSiberHegner (HK) Ltd. –PRC Division26th Floor, West TowerHan Wei Plaza7 Guang Hua RoadChaoyang DistrictBeijing 100004PRCT +86-10-6561-3988F +86-10-6561-3978– Contact:William StockleyEdward Keller (Shanghai) Ltd.20–21/F, Tomson CommercialBuilding710 Dong Fang Road, PudongShanghai 200122PRCT +86-21-5830-0518F +86-21-5830-0519Cambodia1 location– Contact:Vincent NgDiethelm & Co. Ltd.No. 160 Mao Tse ToungBoulevardSangkat Tom Noup TeakKhan ChamkarmonP.O. Box 1051Phnom PenhKingdom of CambodiaT +855-23-212-838F +855-23-212-738Hong Kong10 locations– Contact:Victor HewDKSH Hong Kong Ltd.23/F, Tower A, Southmark11 Yip Hing StreetWong Chuk HangHong KongT +852-2895-0888F +852-2577-1057India1 location– Contact:Andrew V. DanielDKSH India Pvt. Ltd.304 AlphaHiranandani Business ParkPowaiMumbai 400 076IndiaT +91-22-2570-7596F +91-22-2570-759746 Annual Review 2005

Indonesia72 locations– Contact:Thein WinPT DKSH IndonesiaJalan Tomang Raya No. 70Jakarta 11430IndonesiaT +62-21-567-4808F +62-21-568-1029– Contact:Andrew LanePT DKSH Healthcare IndonesiaMenara Jamsostek22nd Floor, Suite 2206Jl. Jend. Gatot Subroto No. 38Jakarta 12710IndonesiaT +62-21-522-8338F +62-21-522-8337– Contact:Swissanto SoerojoPT Harpers Marketing (Indonesia)Mugi Griya 5th Floor, Suite 502Jl. Letjen Haryono MT. Kav. 10Jakarta 12810IndonesiaT +62-21-830-8448F +62-21-830-8449Japan10 locations– Contact:Wolfgang SchanzenbachNihon SiberHegner K.K.SiberHegner Mita Building3-4-19, Mita, Minato-kuTokyo 108-8360JapanT +81-3-5441-4511F +81-3-5441-4521Korea5 locations– Contact:Henrik PedersenDKSH Korea Ltd.Nasan Building1024, Daechi-dongKangnam-guSeoul 135-500KoreaT +82-2-2192-9501F +82-2-2192-9502Laos1 location– Contact:Jeerachai HirunsirisawatDiethelm & Co. Ltd.Ban PhonsinouanUnit 18 New RoadSisattanak DistrictVientianeLaos P.D.R.T +856-21-453-100F +856-21-453-103Malaysia19 locations– Contact:Niels J. HolmDiethelm Holdings (Malaysia)Berhad74 Jalan UniversityP.O. Box 7746700 Petaling JayaSelangor Darul EhsanMalaysiaT +60-3-7966-0288F +60-3-7957-0829– Contact:Tony WooDKSH Corporate SharedServices Center Sdn BhdLot L4-E-3A, Enterprise 4Technology Park Malaysia57000 Bukit Jalil, Kuala LumpurMalaysiaT +60-3-8992-2888F +60-3-8992-2999Myanmar12 locations– Contact:Preman MahaldayvanDiethelm & Co. Ltd.Botahtaung Township412 Merchant StreetYangonMyanmarT +95-1-295-747F +95-1-298-129Philippines10 locations– Contact:Patrocinia CortezEdward Keller (Philippines) Inc.101 Prosperity Av. corner Unity Av.Carmelray Industrial Park 1Canlubang, Calamba4037 LagunaPhilippinesT +63-2-864-1688F +63-2-864-1697– Contact:Yew Looi LiewDiethelm (Philippines) Inc.Barangay Mamplasan4024 Biñan, LagunaPhilippinesT +63-49-512-4000F +63-49-512-4040Singapore3 locations– Contact:Leonard TanDKSH (S) Pte. Ltd.34 Boon Leat TerraceSingapore 119866SingaporeT +65-6471-1466F +65-6474-6356Taiwan7 locations– Contact:Erik Trock-JansenDKSH Taiwan Ltd.Hanover High-Tech Square10F, No. 22, Lane 407TiDing Blvd., Sec. 2Neihu Technology ParkTaipei 114TaiwanT +886-2-8752-7500F +886-2-8752-6777Thailand72 locations– Contact:Walter BrenneisDiethelm & Co LtdDiethelm Tower A18th Floor93/1 Wireless RoadBangkok 10330ThailandT +66-2-695-4002F +66-2-256-6200Vietnam12 locations– Contact:Claire Anne BurgessDiethelm Vietnam Co., Ltd.Liaison Office108–110 Nguyen Van Troi StreetPhu Nhuan DistrictHo Chi Minh CityVietnamT +84-88-443-370F +84-88-443-376Annual Review 2005 47

DKSH Offices Worldwide –Europe and the AmericasChile1 location– Contact:Felipe LavadosDKSH Chile SANapoleón 3331, of. 102Las Condes676 04 06 Santiago de ChileChileT +56-2-233-6357T +56-2-233-1941F +56-2-232-6026Denmark1 location– Contact:Peter DamDKSH GmbH – ScandinavianOfficeKongevejen 3E3000 HelsingørDenmarkT +45-4921-4441F +45-4921-4451France1 location– Contact:Jean-Dominique FoulonDKSH France S.A.1475, Quai du RhôneBP 26601702 Miribel CedexFranceT +33-4-7855-7855F +33-4-7855-7887Germany1 location– Contact:Thomas SulDKSH GmbHBaumwall 320459 HamburgGermanyT +49-40-374-7340F +49-40-374-73480Great Britain1 location– Contact:Peter J. LynaghDKSH Great Britain Limited221 –241 Beckenham RoadBeckenhamKent BR3 4UFUnited KingdomT +44-208-676-6800F +44-208-659-1292Italy1 location– Contact:Natale CapriDKSH Italia SrlVia Polidoro da Caravaggio, 3320156 MilanItalyT +39-02-3070-181F +39-02-3070-1834Netherlands2 locations– Contact:Jan JansenDKSH Netherlands B.V.Vogelaarsweg 233313 LL DordrechtP.O. Box 8893300 AW DordrechtNetherlandsT +31-78-622-0622F +31-78-622-0608Norway1 location– Contact:Morten BaastadPremium Pet Products Norge ASPostboks 174, 0614 OsloVollaveien 20A0668 OsloNorwayT +47-22-727-670F +47-22-630-015Switzerland2 locations– Contact:Beat HellerDKSH Switzerland Ltd.Wiesenstrasse 8P.O. Box 8888034 ZurichSwitzerlandT +41-44-386-72-72F +41-44-386-72-82Turkey1 location– Contact:Hilal Oeztuerk SongunDKSH Switzerland Ltd.Liaison Office TurkeyAlemdag º Cad.Kuyulu Orta SokakNo: 1 K:1 D:1/B34764 Uemraniye, IstanbulTurkeyT +90-216-520-08-01F +90-216-520-08-02USA1 location– Contact:Ursula Van EmdenDKSH North America300 East Lombard StreetSuite 1175BaltimoreMD 21202USAT +1-410-385-1666F +1-410-385-1266Spain48 Annual Review 20051 location– Contact:Blanca FransitorraSiberHegner Ibérica, S.L.Aragon 308, 1 o 2a08009 BarcelonaSpainT +34-93-272-3902F +34-93-272-3560Concept & Design: Gottschalk+Ash Int’lPhotos: Karl-Heinz Hug, BarberêchePrepress & Print: Visiolink AG, Zurich

DKSH Holding Ltd.Wiesenstrasse 8P.O. Box 888CH-8034 ZurichSwitzerlandT +41-44-386-72-09F +41-44-386-72-14www.dksh.com