Management Presentation

1
May 12, 2009
Doing Business in India A Brady Corporation
Perspective
2
BRADY'S MISSION
We identify and protect premises, products and
people
2
3
IDENTIFYING AND PROTECTING PREMISES
Facility ID and Safety
Wire ID
ID Systems
Signs, Labels, Lockout/Tagout Devices, Pipe and
Valve Tags, Sorbents
Wire and Cable Markers Patch Panel, Outlet and
Faceplate Markers
Handheld Labelers and Supplies Benchtop Printers
and Supplies Software
3
4
IDENTIFYING AND PROTECTING PRODUCTS
High-Performance ID
Wire ID
Precision Die-Cut Parts
Die-cut adhesives, gaskets, seals, EMI/RFI
shields, dampers, back light, anti-splinter
films, antennae, meshes, felts, insulators,
thermal management solutions, application
equipment
Bar-code labels, water-indicating labels,
brand-protection labels, RFID labels and tags,
laboratory identification
Labels and sleeves for wire identification in
aerospace, defense and mass transit applications
4
5
IDENTIFYING AND PROTECTING PEOPLE
People Identification
Precision Die-Cut Products
Name Badges Employee ID Cards Time-Expiring
Badges Lanyards, Badge Holders Reels Visitor
Management Software, Printers/Hardware
Test Strips, Electrodes, Drug Delivery and Wound
Care Materials
5
6
Brady India

• The Next Frontier for Brady after a decade of
  explosive growth in China.
• Manufacturing Sales
• Established in Bangalore in November 2006
• US7 M in revenue
• Employs 100 people
• Shared Service Center
• Established in Bangalore in December 2006
• Employs 100 people
• Processing back office transactions for Brady
  subsidiaries around the world

7
Establishing a Manufacturing Operation Key
Learnings

• Licensing / Business Registration
• Approximately 3 months time
• Few surprises and delays in our registration, but
  lots of bureaucracy
• Infrastructure
• Manufacturing infrastructure not readily
  available in Bangalore
• Quality of construction was quite good up to
  Western standards
• Talent
• Production workers readily available
• Lower-level employees can follow processes and
  procedures, but lack some initiative for major
  change
• Upper management harder to find (delayed overall
  process), but well qualified
• Costs
• Personnel costs are very reasonable, even
  upper-level managers
• Fit-out and rental costs are among the lowest we
  have in Asia.

8
Selling into the Indian Market
Key Learnings

• Local Market
• Huge market, but very fragmented with limited
  disposable income
• ? lt20/80 instead of 80/20gt ?
• Large and growing middle class with some
  disposable income
• Everyday products need to be localized to meet
  their needs
• Export Market
• India has big plans for growth in exports which
  bodes well for manufacturers and related supply
  chain partners.
• Very slow in growing exports based on a lack of
  infrastructure
• Openness to Foreign Products
• American products carry a positive brand
  reputation, but not at a huge price premium to
  local alternatives
• Growing middle class who are employed in the IT
  sector are attracted to Western culture and goods
• Keys to Success
• Develop and nurture local relationships with on
  the ground Indian management and employees
• Local service and support is required

9
Establishing a Shared Services Center -
Key Learnings

• What to Transfer
• Back office transactions (AP/AR, Cash
  Applications)
• Business reporting and analytics
• Engineering Support
• Sourcing
• Available Savings
• 25 of US payroll
• Monitor productivity closely target 1.3 Indians
  to 1 US
• Logistics
• Lots of available office space in downtown
  Bangalore
• Must be conveniently located
• Personnel
• Lots of available talent at all levels of the
  organization
• Looking for upward career mobility
• Day jobs are considered a premium
• Tight-knit community of workers
• Lots of competition, relatively high turnover
  rates
• Keys to Success
• Hire the right local talent

10
Infosys Campus
11
Poorer areas of Bangalore
12
General Learnings Talent Workforce

• By the Year 2030, India will
• Be the most populous nation on earth 1.45
  billion people.
• Will have the largest workforce in the world
• 68 of its population will be working age
• Currently ½ are lt 25 years old and 31 are lt 16
  years old
• The growing workforce will be educated
• India adds more college graduates (2.7 million)
  to the work force annually than are produced by
  the United States and Europe combined!
• While the quality of university education is
  good, the Nations primary schools remain pretty
  weak. Middle school education has only been
  mandatory since 2001.
• Key question is will there be jobs for them?
• Without proper infrastructure, India can not
  develop a booming export sector like China
• Without an export sector where will all the jobs
  come from?

Source The Elephant The Dragon, Robyn Meredith
13
General Learnings Offshoring Outsourcing

• Offshoring and Outsourcing Centers will be a
  competitive advantage for India for years to
  come.
• Not dependant on infrastructure development.
• There will be a huge variety of services offered
• 80 of the Fortune 500 companies are already
  utilizing the Indian workforce through either
  offshoring or outsourcing.
• More than a million white-collar jobs have
  already moved to India. McKinsey estimates that
  approximately 300,000 jobs will be transferred to
  India for the next thirty years!
• Things that will likely stay in the US
• Time sensitive work
• Human touch, personalized services
• Things that are prime candidates for outsourcing
• Data collection analysis
• e.g. reading MRIs, processing A/R, income tax
  returns

14
Summary

• India will provide great future opportunities for
  manufacturing, sales and sourcing (product and
  talent)
• Your strategy for India must be focused on the
  long-run and not dependant on short-term results.
• Lots of patience is required especially if you
  are tied to the export sector.
• Local representation is critically important to
  understand market nuances
• While the pace of change may be slower than
  China, the changes may be more sustainable in the
  long run.
• India is not for the weak of heart It is still
  hard for foreign companies to make money.