China Sourcing Seminar

1

• China Sourcing Seminar
• 17 June 2004

2
Basta History

• Founded in 1955 by the Gallagher Family
• Management buy out 1984
• Current Management rescue 1990
• Turn around 1990 1991
• Organic development 1992 1997
• Worcester Parsons acquisition 1998
• Latham acquisition 2001
• Shaw acquisition August 2002

3
Sales in 000

• 1989/90 1997 2000 2001 2003
• 2500 IRELAND 3900 5600
  6300 7500
• 250 BRITAIN 900 6600 11500
  9000
• 250 EXPORT 400 500 800
  400
• 400 SUBCONTRACT 250 250
  500 0
• 3400 TOTAL SALES 5450 12950
  19100 16900

4
Brands

• Basta - locks in Ireland, timber door handles,
  timber window fittings, new 3
  5 lever locks, PVC door
  window handles, cylinders
  
• Worcester Parsons - brass hinges, brass
  hardware
• Smith Wallis - steel window fittings
• Conqueror - friction hinges, espag rails, door
  bolts,
  
  keeps, PVCu hinges
• Shaws window fittings

5
Market Strategy

• Geographic Diversification
• Product Diversification
• Brands
• Brand Extension

6
Production Strategy

• Where competitive, to manufacture
• Product Design
• W.C.M.
• Robots
• Expand Sales Volume to spread Overheads
• Where uncompetitive, to outsource
• Product Specification / Quality
• Supplier capability / Service
• Brand Name

7
Strategic Initiatives-Steps that transformed
Basta

• ISO 9000 / WCM
• PVC /SWF Products
• British Acquisitions
• China Sourcing
• Robots
• Product Development

8
Why Far East?

• Concern about Low Cost Competition
• Desire for Products that we do not make for
  
  
  
• technical or economic reasons
• Desire to Improve our Brands and offer full
• product range
• Key Dates
• August 1999 Chicago
• November 1999 China Visit
• March 2000 Chinese Employee

9
Culture Shock !
10
Visit to potential Suppliers

• Meet the people
• Quality
• Service
• Product Specification
• Tool Drawings
• Samples / Samples / Samples
• Packaging / Product Codes
• Logos
• Prices
• Exclusive Agreement ?

11
Ordering

• Pre -Purchasing Samples -
• Pre-shipping Samples
• Inspection on arrival
• Second Shipment Inspection
• Lead Time Courier 1 Week
• Shipping 5 Weeks
• Allow Three Months For Delivery
• Payment Deposit with An Order
• LC 30 / 60 Days
• Payment At Sight (Copy of B/L)

12
Practical Tips
13
Four Years Later.

• Sourcing 13 different products
• From 11 suppliers
• Sales Value of Chinese products is 1.5m 9
• Source diecast tooling from 3 different suppliers
• Experience overall, very good
• But Quality is an issue
• Hence time delays on initial orders
• Stock Levels
• Communicating is an issue

14
Four Years Later.

• Will we buy everything there?
• Fear of over dependence is an issue
• We are excellent zinc diecasters in Tubbercurry
• Niche products Steel Window Fittings/Brass
  hinges/etc
• But sourcing from China will increase