The Offshore GroupInnovative Outsourcing

World-Class Support

For Manufacturers

Our Team Of Over

500 ExpertsWorking For You

Saltillo, CoahuilaOctober 14, 2010

The Challenge:

World-Class SupportFor Manufacturers

The Offshore Group

For foreign manufacturers of all sizes to achieve overall cost reductions by operating in Mexico, while maintaining quality and delivery requirements and avoiding risks and costly learning curves that may be associated with doing business in a foreign lower-labor-cost country.

What is a manufacturing shelter?

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The Offshore Group

Standalone(100% control and

risk)

Shelter(Shared control and

risk)

Subcontracting

(100% outsourced)

Production Activities

Foreign Company

Foreign Company

Subcontractor

Non-Production Activities

Foreign Company

Shelter Subcontractor

World-Class SupportFor Manufacturers

The Offshore Group

Four Ways Our Shelter Model Meets The Challenge:

1.Locations. Operate within our flexible, scalable, secure, and strategically located industrial parks in Mexico; or choose a location that better meets your site requirements.

2.Focus. The manufacturer focuses its resources on productivity, efficiencies, quality, innovation, and on-time delivery. We focus our resources on non-production-related functions.

3.Leverage. Manufacturers immediately leverage The Offshore Group’s world-class administrative infrastructure and economies of scale in Mexico that reduce costs and eliminate long and costly learning curves.

4.Presence. With The Offshore Group, manufacturers have no need to establish a legal presence in Mexico resulting in:

• Virtually no administrative startup costs.• Greatly reduced risk and exposure.• No burden associated with maintaining a legally and fiscally compliant

company in Mexico.

Who is The Offshore Group?• We are the largest shelter service provider in Mexico.

• Today, we employ approximately 12,000 people in Mexico on behalf of 54 foreign manufacturers.

• Over 24 years, The Offshore Group has developed an unmatched support infrastructure that small, medium, and large manufacturers leverage every day. Our core competencies are:

– Labor Management– Import & Export Management– Facilities Management– Fiscal, Tax, & Regulatory Compliance

World-Class SupportFor Manufacturers

The Offshore Group

Who is The Offshore Group?

World-Class SupportFor Manufacturers

The Offshore Group

An integrated group of U.S. and Mexican companies that provide peace of mind to foreign manufacturers through U.S. based contractual agreements and a solid reputation for operational excellence and regulatory compliance in Mexico.

World-Class SupportFor Manufacturers

The Offshore Group

• Our team of over 500 people are trained, knowledgeable, experienced, and focused on meeting manufacturer’s non-production needs day-to-day.

• Over 40 software systems to control HR, Payroll, Import & Export, Purchasing, Employee Busing, Building Maintenance, and many other administrative functions have been developed in-house and are continuously being improved, and which provided unmatched value to Clients.

• Cross docking facilities near the U.S.-Mexico border which are focused on eliminating delays, preserving the integrity of goods, maintaining legal compliance … at the lowest possible cost.

• A company driven by its principles, continuously improving, and certified under the ISO 9001-2008 standard.

Who is The Offshore Group?

Our Core Competencies

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The Offshore Group

Labor Management

Recruiting, Selection, Hiring, Severance, Payroll,

Benefits, Labor Law Compliance, Union

Relations , Workforce Transportation

Import & Export

ManagementImporting and Exporting,

Cross Docking, Warehousing,

Distribution, International Freight Management

FacilitiesManagement

Construction Management, Tenant

Improvements, Building Maintenance,

Environmental, Security and Safety.

Fiscal, Tax, & Legal

ComplianceAccounting, Tax

Compliance, Government Reporting, Local Vendor

Management, Purchasing, VAT Reimbursement

Los Angeles

TijuanaMexicali

Tucson

NogalesCd.

Juarez

GuaymasHermosillo Chihuahua

Houston

Reynosa

Monterrey

Saltillo

AltamiraSan Luis

Potosi

Queretaro

GuadalajaraMexico City

Manzanillo

Honduras

El Salvador

Guatemala

Mazatlan

Mission

Gulf of Mexico

Sea of Cortez

Asian, European, & South American

Ports

Brownsville

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The Offshore Group

Our Strategic Locations

The Offshore Group’s La Angostura Industrial Park Located in Saltillo, Coahuila Mexico

Employee BusingLa Angostura Industrial Park

Saltillo, Coahuila Mexico

The Offshore Group’s Bella Vista Industrial Park Located in Empalme, Sonora Mexico

Day Care Facility located at The Offshore Group’s Bella Vista Industrial Park in Empalme, Sonora Mexico

What Offshore Group Clients Do & Control:

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The Offshore Group

Customer Service

ManufacturingTechnology

Training

Production Supply-Chain

Engineering Quality

What We Do:Human

ResourcesPayroll

& BenefitsImport

& Export

Accounting& Taxes

LocalProcurement

EmployeeBusing

FacilitiesMaintenance

Environmental& Safety

Labor UnionRelations

Park Management

CorporateCitizenship

A Close-up At Our Labor Management Service:

• Executive recruiting

• Recruiting ads in local media and web

• Maintain candidate databases

• Recruiting of direct, indirect, and salaried

labor

• Recruiting of specialized labor

• Offsite recruiting

• Applicant prequalification

• Applicant testing

• Applicant background check

• Hiring (per client requirements and approval)

• New hire orientation

• In-plant HR representation

• Employee records upkeep

• Attendance monitoring

• Employee counseling

• On-site child care services G

• Employee termination

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The Offshore Group

• Workforce redeployment

• Employee dispute resolution

• Labor statistics and analysis

• Labor union negotiations

• Labor dispute resolution

• Day-to-day labor union interaction

• Mexico labor law compliance

• Mexico labor law reporting

• Local community leaders alliance

• Education activity coordination

• Skills training program facilitation

• Alliance with local trade schools

• Employee satisfaction surveying

• Recreational activity coordination G

• HR field services

• In-Park Medical Services

What Are Some of The Benefits Our Shelter Program Provides Foreign Manufacturers in

Mexico?

The Offshore Group

• Fast startup and no upfront fees • Assurance of Mexican Customs compliance

• Experienced direct labor recruiting • Expert logistics support & coordination

• Experienced management talent recruiting

• Assurance of environmental compliance

• Reduced labor turnover • Access to local vendors and service providers

• Improved labor attendance • Secure and safe industrial parks

• Effective labor union relations and negotiating

• Quick and expert response to building maintenance, repair, and utilities issues

• Ensures market wages and benefits • Flexible building location/size/feature options

• Expert employee problem resolution • No government reporting

• Reduced border crossing costs • No income tax in Mexico

• Reduced border crossing delays • Reimbursement processing of value added tax

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The Offshore Group

Guaymas / Empalme(Across 35 companies, 2009 Actual Costs in USD)

Cost Per Direct Labor Hour

Direct Labor OvertimeTotal Direct

LaborOverhead

Total Operating Cost

Min. $1.51 $0.18 $1.90   $6.63

Max. $4.85 $1.98 $5.36   $29.06

Average $2.47 $0.67 $3.14 $6.05 $9.19

Saltillo(Across 15 companies, 2009 Actual Costs in USD)

Cost Per Direct Labor Hour

Direct Labor OvertimeTotal Direct

LaborOverhead

Total Operating Cost

Min. 2.24 0.11 2.76   7.25

Max. 4.85 1.21 5.30   40.62

Average $2.91 $0.58 $3.77 $7.54 $11.31

Cost Overview:Labor Cost Variables:

• Labor skill• Labor availability• Overtime• Turnover• Absenteeism• Severance• Exchange rate

Major Overhead Variables:

• Mexico purchases• Electricity• Freight• Customs

Exchange Rate History:

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The Offshore Group

Mexico Inflation Rate History:

• Conduct a customized cost model to arrive at expected total operating costs in Mexico using actual and current cost data (not from government agencies, consultants, or surveys)

• Assist in site selection

• Assist in conducting what-if logistics scenarios

• Assist in electrical power and special utilities provision

• Assist in identifying suppliers in Mexico

How We Help You Or Your Suppliers Understand The True Cost of Operating in Mexico

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The Offshore Group

Our Value Proposition• By outsourcing non-production-related

functions to us, a company’s resources are focused on productivity, efficiencies, and innovation; on meeting product quality and delivery commitments; and on operating at the lowest possible cost in Mexico.

• By leveraging our resources, infrastructure, expertise, economies of scale, and legal presence in Mexico, a company achieves a competitive advantage from day one.

World-Class SupportFor Manufacturers

The Offshore Group

For more information:www.offshoregroup.com

Chuck YahnDirector, Midewest OperationsThe Offshore GroupEmail: chuck.yahn@offshoregroup.comOfc: (262) 275-3632Cell: (804) 301-2805

Sunset at Los Algodones Beach Located in San Carlos, Sonora Mexico