DKSH Cambodia
DKSH Cambodia
DKSH Cambodia
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Welcome OAV-Business delegation<br />
Bo Nielsen & Nicolas Chabanier<br />
Phom Penh, April 7 th , 2009<br />
© <strong>DKSH</strong>
AGENDA<br />
• a) Welcome<br />
• b) Presentation of <strong>DKSH</strong>'s business model,<br />
perspectives…<br />
• c)Q&A-session<br />
• d) Special topics of interest as follows:<br />
- Connections to the Thai and Vietnamese markets<br />
- Potential for your business units<br />
- Differences of distribution channels in <strong>Cambodia</strong><br />
compared to<br />
other Asian markets, especially higher developed ones<br />
such as Thailand,<br />
Malaysia etc.?<br />
- Evaluation of the <strong>Cambodia</strong>n banking and<br />
consequences for daily business?<br />
- Issues of transparency<br />
- Impact of the global economic crisis in <strong>Cambodia</strong> and<br />
for your business<br />
Page 2<br />
© <strong>DKSH</strong>
<strong>DKSH</strong> <strong>Cambodia</strong> – Facts and figures<br />
<strong>DKSH</strong> Office in 1952<br />
� Presence dates back to 1952<br />
� 100% owned by <strong>DKSH</strong> Holding Ltd in Switzerland<br />
� Active in 3 Business Units, Consumer Goods, Healthcare, and<br />
Technology<br />
� Our service quality and law-compliant practice has earned us the<br />
reputation of the most respected company in our fields of services<br />
� Full transparency in relationship with business associates and<br />
customers<br />
� Comprehensive network, offering wider market access and<br />
effective pooling of resources and knowledge<br />
� Ongoing investment into state-of-the-art facilities to enhance<br />
efficiency and productivity through economies of scale<br />
Page 6<br />
© <strong>DKSH</strong>
<strong>DKSH</strong> <strong>Cambodia</strong>:<br />
Product /<br />
Operational<br />
Support<br />
Montha<br />
L.<br />
CUMMIN<br />
S<br />
Cummins<br />
Manager<br />
Long<br />
Visoth<br />
=> 3 BUs: CG,HEC and Technology<br />
=> 500 employees<br />
=> 30 MoUS$ in 2008<br />
Source: MoH/ EIC<br />
Executive<br />
Vice<br />
President<br />
TEC<br />
Luke Mitchell<br />
TEC<br />
Manager -<br />
Thailand<br />
Claus<br />
Bressmer<br />
General<br />
Manager<br />
Yon<br />
Chandan<br />
arith<br />
TECHNO<br />
LOGY<br />
General<br />
Manager<br />
Yon<br />
Chandan<br />
arith<br />
Finance / Accounting<br />
/ Administration<br />
Vincent Ng / Tech<br />
Menh<br />
SERVICE<br />
Service<br />
Manager<br />
Chum<br />
Sothy<br />
Sales Department<br />
Marketing Team<br />
HEC Alliance<br />
Nicolas Chabanier<br />
GM <strong>Cambodia</strong><br />
Claire Burgess<br />
Indochina director<br />
Central Service:<br />
Finance<br />
Mr Tech Men<br />
RA Supply<br />
Chain<br />
Page 7<br />
BD<br />
© <strong>DKSH</strong>
<strong>DKSH</strong> <strong>Cambodia</strong> – Facts and figures<br />
<strong>DKSH</strong> distribution center<br />
� 500 employees<br />
� High growth from US$5 Mil in 2002 to<br />
>US$30 Mil sales in 2008<br />
� Large ISO accredited distribution<br />
center on 10,000 sqm of land in<br />
Phnom Penh<br />
Page 8<br />
© <strong>DKSH</strong>
Consumer Goods Business Unit<br />
Page 9<br />
© <strong>DKSH</strong>
How we organize our team<br />
Page 10<br />
© <strong>DKSH</strong>
Our Impressive Organic Growth<br />
Average annual organic growth<br />
of over 30% since 2004<br />
Page 11<br />
© <strong>DKSH</strong>
Active Outlets Covered<br />
Page 12<br />
© <strong>DKSH</strong>
Nivea Water Festival Trade Fair November 2008<br />
NIVEA Booth<br />
A lot off people from 21 province come to visit this<br />
fair<br />
Promotion Premiums NIVEA<br />
Page 13<br />
© <strong>DKSH</strong>
Listerine Water Festival Trade Fair November 2008<br />
Listerine Booth<br />
A lot off people from 21 province<br />
come to visit this fair<br />
Promotion with Lotteries & Coupon<br />
Page 14<br />
© <strong>DKSH</strong>
EQUAL Water Festival Trade Fair November 2008<br />
A lot off people from 21 province come to visit this fair. Most customers buy Equal coz they got diabetes<br />
Page 15<br />
© <strong>DKSH</strong>
Display in DRC and GT<br />
Page 16<br />
© <strong>DKSH</strong>
Display Dumex at Lucky Olympic<br />
Page 17<br />
© <strong>DKSH</strong>
Our brands and categories<br />
Page 18<br />
© <strong>DKSH</strong>
Our brands and categories<br />
Page 19<br />
© <strong>DKSH</strong>
Our brands and categories<br />
Page 20<br />
© <strong>DKSH</strong>
Our brands and categories<br />
Page 21<br />
© <strong>DKSH</strong>
Healthcare Business Unit<br />
Page 22<br />
© <strong>DKSH</strong>
<strong>DKSH</strong> <strong>Cambodia</strong>: Organization Chart<br />
Sales Department<br />
Source: MoH/ EIC<br />
Marketing Team<br />
HEC Alliance<br />
<strong>DKSH</strong> in charge of promotion<br />
Nicolas Chabanier<br />
GM <strong>Cambodia</strong><br />
Registration department<br />
Mrs Phanavy<br />
Claire Burgess<br />
Indochina director<br />
Central Service:<br />
Finance<br />
Mr Tech Men<br />
Supply chain department<br />
Mr Munim<br />
Business development<br />
Mr. Phirom<br />
And assistant, Bunvuth<br />
Page 23<br />
© <strong>DKSH</strong>
Healthcare – Business Model Service Business<br />
<strong>DKSH</strong> Innoreg<br />
Product registration<br />
Supplier<br />
OLIC Manufacturing<br />
Integrated pharmaceutical<br />
manufacturing<br />
Product<br />
registration<br />
Regional Regional hubs hubs<br />
Sales and marketing<br />
Diagnostics and medical devices<br />
OTC and consumer health<br />
Ethical<br />
Manufacturing<br />
Supply chain<br />
<strong>DKSH</strong> Healthcare Alliance<br />
Contract marketing and<br />
sales services<br />
Distribution<br />
Customers<br />
<strong>DKSH</strong> Logistics<br />
Total supply chain<br />
management<br />
Page 24<br />
© <strong>DKSH</strong>
Healthcare<br />
Seven Strategic Building Blocks<br />
Supplier Value<br />
Geographical<br />
Focus<br />
Customer Value<br />
Integrated<br />
Solutions<br />
Provider<br />
Human<br />
Performance<br />
Shareholder Value<br />
Portfolio Balance<br />
Page 25<br />
© <strong>DKSH</strong>
Supplier overview<br />
Page 26<br />
© <strong>DKSH</strong>
Sales history:<br />
18,000<br />
16,000<br />
14,000<br />
12,000<br />
10,000<br />
8,000<br />
6,000<br />
4,000<br />
2,000<br />
0<br />
14%<br />
35%<br />
49%<br />
5,363<br />
49%<br />
7,997<br />
10,922<br />
36%<br />
11,464<br />
4%<br />
13,056<br />
13%<br />
16,776<br />
2003 2004 2005 2006 2007 2008<br />
36%<br />
37%<br />
Sales Growth<br />
5%<br />
2004 2005 2006 2007 2008<br />
5%<br />
9%<br />
14%<br />
Total grow th Organic New business<br />
5%<br />
28%<br />
Page 27<br />
60%<br />
50%<br />
40%<br />
30%<br />
20%<br />
10%<br />
0%<br />
6%<br />
24%<br />
30%<br />
© <strong>DKSH</strong>
Market data for 2008:<br />
17%<br />
Est. Est. 2009: 2009: +7%<br />
+7%<br />
11%<br />
10%<br />
Vietnam Myanmar<br />
-2%<br />
<strong>Cambodia</strong> Laos<br />
Page 28<br />
© <strong>DKSH</strong>
Customer LANDSCAPE<br />
Source: MoH/ EIC<br />
Wholesale<br />
138<br />
Retail<br />
300<br />
Province<br />
350<br />
Doctor<br />
250<br />
Clinic<br />
51<br />
Depo<br />
130<br />
Hospital<br />
23 31 16 7<br />
2005 Total 2006 Total 2007 Total<br />
Laboratory<br />
NGO<br />
Company<br />
Other<br />
37<br />
Page 29<br />
© <strong>DKSH</strong>
Distribution Center<br />
© <strong>DKSH</strong>
Why partnering with us<br />
� Our reputation (presented in company facts and figures)<br />
� <strong>DKSH</strong> provide services to major companies with multinational brands and<br />
understand the expectations, roles and responsibilities<br />
� <strong>DKSH</strong> have very strong distribution network which provide quick access into over<br />
5,000 retail outlets (direct & indirect) in <strong>Cambodia</strong><br />
� Economy of scale, <strong>DKSH</strong> is now the biggest distributor in <strong>Cambodia</strong> with strong<br />
bargaining power when dealing with the chain retailers<br />
� Professional and high standard setup (staff, logistics, IT, reporting)<br />
� Financially strong and stable<br />
Page 31<br />
© <strong>DKSH</strong>
IT sytem capability<br />
� <strong>Cambodia</strong>’s most<br />
Sophisticated, reliable,<br />
and flexible IT System<br />
covering from General<br />
Ledger to Lot<br />
Tracking…<br />
� Hand held devices<br />
(PDA and portable<br />
printers) for sales and<br />
delivery team<br />
� In-house tailored<br />
reports linked to stock<br />
and sales<br />
ordering/invoicing<br />
programs real-time<br />
� > 20 sales and stock<br />
analysis reports with<br />
further filtering and<br />
more can be added in<br />
easily…<br />
� Batch and expiry<br />
tracking capability<br />
Page 32<br />
© <strong>DKSH</strong>
Sales and Stock Report<br />
� > 20 sales and<br />
stock analysis<br />
reports with further<br />
filtering and more<br />
can be added in<br />
easily…<br />
� Let us have a quick<br />
look at a few<br />
reports<br />
Page 33<br />
© <strong>DKSH</strong>
Other IT projects this year<br />
� Blue Ocean<br />
� Website access directly by suppliers to various<br />
information including sales and stock<br />
� Access to sales and stock reports anywhere<br />
� Access rights assigned to users<br />
� Auto-sending of report to mobiles<br />
� Sales and stock reports are automatically generated<br />
and sent to mobile (hand phone) according to pre-set<br />
schedules<br />
Page 34<br />
© <strong>DKSH</strong>
Technology Business Unit<br />
Page 35<br />
© <strong>DKSH</strong>
Country Organization – 1.9.2008<br />
<strong>Cambodia</strong><br />
Product /<br />
Operational Support<br />
Montha L.<br />
CUMMINS<br />
Cummins Manager<br />
Long Visoth<br />
Executive Vice<br />
President TEC<br />
Luke Mitchell<br />
TEC Manager - Thailand<br />
Claus Bressmer<br />
General Manager<br />
Yon Chandanarith<br />
TECHNOLOGY<br />
General Manager<br />
Yon Chandanarith<br />
Finance / Accounting / Administration<br />
Vincent Ng / Tech Menh<br />
SERVICE<br />
Service Manager<br />
Chum Sothy<br />
Page 36<br />
© <strong>DKSH</strong>
Business Development<br />
Business Line Development / Expansion Strategy<br />
� What Products / Services<br />
� Which Markets<br />
� Who – Which Customers<br />
� When and how will it be implemented<br />
1/-INS : Laboratory Testing Equipment for the<br />
construction industry. Need dedicated staff.<br />
2/- Mining and Mineral Element Analyzers :<br />
InnovX System<br />
- Construction & Mining Exploration<br />
- Schools / University / Institutes<br />
- Mining Exploration Companies<br />
- Garment & Textile Industry<br />
- Some Government Agencies<br />
- Universities, Government Agencies<br />
- Foreign & Local Investors of Factories & Plants<br />
- Mining Exploration industry<br />
- Starting from 2008 onward for Laboratory<br />
Equipment for the construction industry<br />
- Early start for Innovx System : Mining Exploration,<br />
Safety Equipment.<br />
- There are some projects at universities.<br />
- Study inquiry from customers and then<br />
communication with supplier.<br />
Page 37<br />
© <strong>DKSH</strong>
Business Development<br />
in the coming years and Demands<br />
� What Products / Services (Existing)<br />
� Which new Markets<br />
� Who – Which Customers<br />
� When and how will it be implemented<br />
- Lab. equipment for the construction industry :<br />
- Mining Exploration.<br />
- Universities / Construction Companies /<br />
Government Sector<br />
- Mining & Mineral Exploration.<br />
- Safety Controls : Toy and Garments<br />
- School/Universities/ Institutes<br />
- Construction companies<br />
- Manning Exploration, Safety controls<br />
- Garment factories<br />
- Some Government Agencies<br />
- Starting End of 2008 and Early 2009 onward.<br />
Page 38<br />
© <strong>DKSH</strong>
Connections to the Thai and Vietnamese markets<br />
23%<br />
<strong>Cambodia</strong> Imports - partners (%) 2007<br />
17%<br />
15%<br />
10%<br />
8% 7%<br />
TH V N C N HK SGP T W SK<br />
Biti’s footwear, Vinamilk dairy products and Vissan processed food have become the choice of <strong>Cambodia</strong>n consumers instead of Chinese and Thai goods.<br />
The ministry said that there is a growing demand for Vietnamese products, mainly in steel, fertilizer, insecticides, pharmaceuticals, plastics, garment and textiles.<br />
Biti’s footwear, Vinamilk dairy products and Vissan processed food have become the choice of <strong>Cambodia</strong>n consumers instead of Chinese and Thai goods.<br />
<strong>Cambodia</strong>n visitors to Ho Chi Minh City like to go shopping at supermarkets and have health checks-up at Cho Ray, Binh Dan and Gia Dinh hospitals. According to<br />
local tourism firms, each <strong>Cambodia</strong>n visitor spends an estimated 850-2,000 USD during their visits.<br />
In 2008, over 150 Vietnamese businesses set up companies, representative offices and shops in the country.<br />
Vietnam is currently the third largest exporter to <strong>Cambodia</strong> after Thailand and China while <strong>Cambodia</strong> is the 16th biggest market of Vietnam.<br />
The country plans to raise the trade turnover with <strong>Cambodia</strong> to 2.45 billion USD by 2010.<br />
In 2008, Vietnam earned 1.43 billion USD from exports to <strong>Cambodia</strong>, a year-on-year increase of 50 percent.<br />
5%<br />
Page 40<br />
© <strong>DKSH</strong>
CAMBODIA PROCUREMENT CHANELS :<br />
Source: INSEAD<br />
Legal<br />
importation,<br />
60%<br />
Illegal<br />
importations,<br />
27%<br />
Local<br />
production,<br />
8%<br />
Counterfeit,<br />
5%<br />
Page 41<br />
© <strong>DKSH</strong>
Market data for 2008:<br />
- 0 . 6 %<br />
1. 7 % 0 . 7 %<br />
3 . 4 %<br />
5 . 9 %<br />
KH's Economic growth by sector and Q<br />
10 . 0 %<br />
18 . 0 %<br />
13 . 7 %<br />
Textile - 4 . 3 % Construction Tourism - 5 . 6 %<br />
Real Estate<br />
- 2 9 . 7 %<br />
- 5 3 . 4 %<br />
- 2 6 . 8 %<br />
16 . 6 %<br />
- 2 1. 8 %<br />
- 3 6 . 4 %<br />
Q1 2008 Q2 2008 Q3 2008 Q4 2008<br />
Page 43<br />
© <strong>DKSH</strong>
PHARMACEUTICALS MARKET<br />
� <strong>Cambodia</strong> Pharma market – Prescription VS OTC (inc. parallel import and counterfeit: 27%)<br />
� USD millions<br />
Source: INSEAD<br />
57.5<br />
66.1<br />
76.0<br />
87.4<br />
+14%<br />
100.5<br />
13.2 14.7 17.1 20.2 23.4<br />
2005 2006 2007 2008 2009 2010 2011<br />
OTC ETHICAL CONTERFEIT<br />
� Generic market : 28 Millions $<br />
115.6<br />
27.2<br />
132.9<br />
31.8<br />
Page 44<br />
© <strong>DKSH</strong>
Market data for HEC 2008 and 2009:<br />
17%<br />
Est. Est. 2009: 2009: +7%<br />
+7%<br />
11%<br />
10%<br />
Vietnam Myanmar<br />
-2%<br />
<strong>Cambodia</strong> Laos<br />
Page 45<br />
© <strong>DKSH</strong>
Distribution channel comparison: KH VS TH, MY and SGP<br />
A basic civil servant earns 40$ /month so illegal importation is a major issue<br />
Big private projects are often brought turn key from a country(Thailand, Korea, etc..)<br />
Western way against traditional way:<br />
• import taxes (up to 35%)<br />
• Brand building versus Red envelope marketing<br />
• <strong>Cambodia</strong> is ranking 134 on most corrupted countries but clean business is the<br />
key success<br />
• Extremely price oriented but faithful to the brand<br />
Cash based business<br />
Cost of distribution higher than surrounding countries due to lask of infracstucture and one of<br />
the lowest productivity rate.<br />
Easy access to business : low tax, easy to operate a business (even by a foreigner)<br />
Page 47<br />
© <strong>DKSH</strong>
Evaluation of the <strong>Cambodia</strong>n banking and consequences<br />
for daily business?<br />
•It is a cash based country dollarized<br />
•People use loan mainly for realy estate<br />
•For consummers products they still rely on Microfinance (Chamroeun Micro finance) with a<br />
good rate of repayment >98%<br />
•Cash is becoming very volatile<br />
Microfinance source of funding 2008<br />
Public subsidies,<br />
20.1%<br />
NGOs partners,<br />
7.8%<br />
Other revenues,<br />
0.2%<br />
Individuals, 20.1%<br />
Foundation and<br />
Business, 29.1%<br />
Page 49<br />
© <strong>DKSH</strong>
Issues of transparency<br />
country rank<br />
84<br />
123<br />
162<br />
168<br />
179<br />
country<br />
Thailand<br />
Vietnam<br />
<strong>Cambodia</strong><br />
Laos<br />
Myanmar<br />
2007 CPI<br />
scor<br />
e<br />
3.3<br />
2.6<br />
2<br />
1.9<br />
1.4<br />
confidence<br />
range<br />
2.9-3.7<br />
2.4-2.9<br />
1.8-2.1<br />
1.7-2.2<br />
1.1-1.7<br />
Page 51<br />
© <strong>DKSH</strong>
Impact of the global economic crisis in <strong>Cambodia</strong> and for<br />
your business : a ~20% drop YTD Vs 2008<br />
Real GDP Growth KH, 1994 - 2009<br />
9.1%<br />
6.4% 5.4% 5.6% 5.0%<br />
11.9%<br />
8.8% 8.1%<br />
6.6%<br />
8.5%<br />
10.3%<br />
13.3%<br />
10.8% 10.2%<br />
Y 9 4 Y 9 5 Y 9 6 Y 9 7 Y 9 8 Y 9 9 Y 0 0 Y 0 1 Y 0 2 Y 0 3 Y 0 4 Y 0 5 Y 0 6 Y 0 7 Y 0 8 Y 0 9<br />
F D I (M o . U S $ )<br />
2 7 9<br />
3 8 1<br />
4 0 8<br />
8 6 6<br />
6 0 0<br />
5 5 0<br />
2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9<br />
N B C EIC W B<br />
7 2 4<br />
8 0 0<br />
6.8%<br />
Page 53<br />
4.8%<br />
© <strong>DKSH</strong>
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