Chris Oliver 23 August 2007. AGENDA Overview of CBI Market Driving Forces Strategic Issues

Chris Oliver

23 August 2007

AGENDA

• Overview of CBI

• Market Driving Forces

• Strategic Issues

OVERVIEW OF CBI

Johannesburg

Thaboqwa

Assembly Plants

Hyqwa

Lesotho 1Hylesedi

Lesotho 2

PRODUCT/MARKET MIX

Market Segment

Min

iatu

re

Circu

it Bre

ake

rs

Mould

ed C

ase

Circu

it B

reake

rs

Earth

Leaka

ge P

rote

ction

Ele

ctricityM

ete

ring

Ready/D

istributio

n B

oard

s

Surg

e P

rote

ction

Device

s

Wirin

g A

ccesso

ries

Auto

matio

nEquip

ment

Moto

r Contro

lG

ear

Residential x x x x x x

Commercial x x x x x x

Mining x x x x x

Utilities x x x x

Industrial x x x x x x x

OEM x x

Manufactured Traded

SALES MIX

0

20

40

60

80

100

120

140

160

180

2004 2005 2006

2003 Base = 100

ResidentialCom/IndMining

Industrial ControlsUtilityExport

EXPORT/TOTAL SALES

0%

10%

20%

30%

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Ratio

Export Sales by Region

0%

20%

40%

60%

80%

100%

2004 2005 2006

%Australia

Far East

North America

Europe

Africa

MARKET DRIVING FORCES

RESIDENTIAL

• Building plans completed• Building plans passed• Other suppliers are Clipsal, Schneider,

Crabtree, ABB, Chint, MES, MCE etc.• Low cost of Chinese products• Suppliers of Chinese products in major centres• Banks become major players in low cost

housing• CBI products are widely available

BUILDING PLANS COMPLETEDSeasonally Adjusted at constant 2000 prices

0

200

400

600

800

1000

1200

1400

1600

1800

J06

F M A M J J A S O N D J07

F M A M

R mio

ResidentialBuildings

Non-ResidentialBuildings

Additions andAlterations

BUILDING PLANS PASSEDSeasonally Adjusted at constant 2000 prices

0

500

1000

1500

2000

2500

3000

J06

F M A M J J A S O N D J07

F M A M

R mio

ResidentialBuildings

Non-ResidentialBuildingsAdditions andAlterations

MARKET TRENDS RESIDENTIAL

50

100

150

200

250

300

2001 2002 2003 2004 2005 2006 O N D J 07 F M A M J J

Index (2001 =100)

Sales (ppd)

Building Plans

INDUSTRIAL and MINING

• Commodity prices lower but still high• Project commitment remains strong• Skills shortages for large projects• Capacity of local suppliers to supply turn

key projects• Imports of capital equipment and

associated circuit breakers

UTILITIES

• Slowdown in electrification due to electricity supply capacity limitations

• Erratic nature of metering orders and impact on industry

• Survival pricing models of metering competitors• Eskom capital projects outstrips local capacity• Declared preference for turn-key projects• LV Circuit breakers disappear in enormity of

projects• LV circuit breakers will accompany international

turn-key project suppliers

EXPORT

• Capital constraints limits export business consistency in Africa

• Industrialised countries moving their manufacturing to low labour cost areas i.e. China, Vietnam, India etc.

• Telecom, railway signalling and distribution protection remains the main market segments

STRATEGIC ISSUES

• Lower cost of manufacturing by– Rationalising product range– Reducing input costs

• Grow sales by– Strengthening distribution channel– More intelligent marketing– By insuring adequate supply of product

Q’s & A’s