【正文】 apan CAGR 9699 +% +% % Major importing countries / regions 1999 [%] Major importing regions and supplier regions Source: WTO, Roland Berger Strategy Consultants 1): Hong Kong included in rest of Asia: EU %。 and Japan % Asia is the biggest supplier for US and Japan — second biggest for Europe Lines 26 presentationCEMSx Value of clothing imports into Japan [US$ bn] 1 1 , 4 5 69 , 5 4 81 0 , 5 3 81 1 , 6 0 61996 1997 1998 199919,672 16,727 14,690 16,367 China Market Share of China 59% 63% 65% 70% Source: WTO, Roland Berger Strategy Consultants China has increased its market share in Japan to 70% despite a shrinking market Lines 27 presentationCEMSx Based on production cost China is petitive on a global scale Costs of given minutes for clothing production [$] Based on a survey of KSA for a model production site including … ? Wages and auxilliary wages ? Productivity ? Working days and time ? Costs for management and administration ? Overheads Cheaper production cost than China Source: KSA, Roland Berger Strategy Consultants America Asia Western Europe + Mediterrean Eastern Europe . Costa Rica El Salvador Dominican Republic Jamaica Guatemala Honduras Mexico Hong Kong Taiwan Korea Pakistan Malaysia Philippines Sri Lanka Thailand China Indonesia India Vietnam Cambodia Germany Italy France . Israel Spain Greece Portugal Turkey Tunisia Morocco Egypt Slovenia Poland Croatia Czech Republic Hungary Estonia Lithuania Slovakia Latvia Bulgaria Romania Russia Ukraine Usbekistan Moldavia Lines 28 presentationCEMSx Volume, distance of price and growth in China relative to average of EU imports Source: Roland Berger Strategy Consultants, CITH, CIRFS, European Commission Note: Bubble size represents market share by volume of total EU imports in this category 4 0 2 0020406080100 1 0 5 0 5 10 15 20 25 30Relative price to average [%] Relative growth to average [%] Trousers Women’s overcoats Women’s suits Men’s shirts Tshirts Pullover Women’s blouses Women’s dresses Women’s skirts Total EU import growth of selected items, CAGR 199399 [%] TShirts +% Pullovers +% Trousers +% Men’s shirts +% Women’s blouses +% Women’s overcoats +% Women’s dresses +% Women’s skirts +% Women’s suits +% High quota cost in relation to product price In the EU, China has strong petitive advantages in women?s suits, overcoats and skirts sector while pullovers and Tshirts are more expensive than the average Lines 29 presentationCEMSx China has based on its strengths — the potential to increase its market share in Europe Key findings “Supplier country China” Source: Roland Berger Strategy Consultants interviews Service Especially the Southern part of China demonstrates a petitive advantage in terms of ? Reliability pared to the Americas ? Creativity pared to Central / Eastern Europe Lead time China is naturally (sea freight) facing a disadvantage concerning leadtime pared to the Americas (US) and Eastern / South Europe (EU). Increasing pressure on time to market based on shorter collectioncycles is driving less price sensitive customers to also use airfreight Distance to raw material markets China is expanding its petence in fabric production especially in technical fabrics and is therefore building up a petitive advantage towards other Asian countries without fabric production or poor fabric production (. Sri Lanka, Cambodia) Cost position Based on production costs China is petitive on a global scale. However, relative high quota costs in lowpriced product categories and the strong dollar have partly resulted in a shift in sourcing to the Americas and Eastern Europe Production know how / quality China is broadly accepted as a country with excellent production knowhow across all product categories with core petence in coats, suits and shirts 1 2 3 4 5 Lines 30 presentationCEMSx The impact of the WTO agreement differs strongly between the different market participants Textile Manufacturers ? More exports to China ? Increasing investments in China ? Few petitive advantages (capital intensive) Apparel Manufacturers ? Strong increase in exports to Europe, US and Japan ? More license agreements with European, US and Japanese brand and non brand apparel manufacturers and retail firms (labor intensive) State Trading Firms ? Risking to loose their quotaselling business and profits ? Have to develop into regional agents or to bee manufacturers Private Trading Firms ? Increasing market share through global sourcing work, more value added and better client relationships ? New market entrants in China Lines 31 presentationCEMSx The advantage of stateowned trading panies in getting cheaper quota will gradually disappear Advantage of stateowned trading panies Example Quota structure of a stateowned pany Impacts ? The stateowned trading panies currently still own the advantage of getting quota from the government free of charge or at lower cost ? Having relied on the quota protection for a long time of period, most of the stateowned trading panies haven’t established enough petitiveness for a free market petition ? The deregulation is the absolute trend and stateowned panies will gradually lose their advantages in quota acquisition ? After China’s accession to the WTO, the abolishment of quota will push the stateowned trading panies into a very unfavorable situation %%%Free quota Cheaper quota Market price quota Profit contribution from subsidized quota: US$ 20m Example Lines 32 presentation