Strategic Cooperation between Chinese and Dutch Companies

The competitive advantage for 2012

Succes in European marketing

Strategic Cooperation between Chinese Companies and E.M.S.S. / M&P Industries The competitive advantage for 2012 to conquer Europe

Meeting 15th Sino Dutch Joint Economic Committee, Thursday, July 14, 2011 with Minister Bleeker and Vice Minister Zhong Shan

Introduction Europe 2012 is now! Fundamental changes have already occured as the European business community pushes for a more unified European market. Europe 2012 is emphasizing competition worldwide. It will create European global players to rival Chinese business in major markets. Chinese companies should be exploring strategic positions to prepare to compete in Europe with the European companies. Many small Chinese companies already play a role in Europe through the export of their products into the European market place. The Netherlands takes a very central position in the European market, due to its harbor and airport location, as can be observed on the map.

Export of products Successful companies whishing to improve their export to The Netherlands or through The Netherlands to Europe have tried many different ways with limited result. The larger companies, able to set up their own base are not complaining. They can afford the financial investment and benefit from operating under their own name. Most of the small and medium sized companies follow the traditional route of involving an exporter and appointing local agents or distributors. The main objective of directly and adequately supporting the customer remains difficult to realise, since it will in most cases mean having a qualified salesperson in a usually large geographical area. Problem such as where to locate, how to manage the operation, avoiding conflicts with local law and social security and the language barrier will soon arise.

Export of products When working through a distributor or representative one is faced with the fact that they mostly work under their own name and that they will have to represent a large principal base to exist. Consequently the market information received is limited and often filtered, which makes adequate forecasting impossible. If you find yourself in such a position and you are not ready or capable to establish a base overseas, the answer can be provided through the E.M.S.S./M&P Industries approach!

The E.M.S.S. / M&P Industries approach E.M.S.S. / M&P Industries B.V., founded by Rudi van der Poel in 1989, is offering you a concept that will solve many of your problems. The concept represented is born out of experience gained after years of dealing with overseas markets in Europe, Middle East and China and several years of experience in international trading and import of commercial products for Europe. It is an answer to problems which are a result of wanting to increase market penetration. Manufacturers like to have aside from their distribution channel a small base of their own at minimum cost. The function of such a base can be sales and administrative support, acceptance of inquiries, providing of quotations, handling of correspondence, order intake and various other secretarial functions. This will allow the salesperson to focus on customer and application aspects, knowing that there is capable support available.

The E.M.S.S. / M&P Industries approach The E.M.S.S. / M&P Industries solution is simple and at relatively low cost to the manufacturer. We provide, except for specific product knowhow, all that is needed: • An office at a suitable location (near Rotterdam) • Secretarial assistance • Sales administration • Management of sales force • Information about marketing sources and industrial contacts • Information on regulations and legal aspects • Filing, dispatch and retrieval of correspondence • Recruitement of local sales people if needed • Personal assistance in getting settled in The Netherlands as the

gateway to the European market

The above services, the basic package, are provided at a monthly fee, which in each case will be calculated depending upon the service required.

The E.M.S.S. / M&P Industries approach In case the development of the business justifies the establishing of a fully owned branche office, E.M.S.S. / M&P Industries can also assist thereby. The “extended package” will include regulatory, legal and accounting assistance as well as other issues that might occur. The longstanding excellent contacts of our company with local authorities assures professional and efficient advice and assistance.

Summary Summarizing we can state confidently that we are able to provide a professional managed shell for expanding your overseas marketing efforts at a very reasonable cost. Please contact us for more information and/or questions.

Total cost “E.M.S.S. / M&P Industries package” The package includes: • Secretary (salary, benefits, taxes and vacation paid by E.M.S.S. / M&P Industries)

• Phone and email facilities available • Office furniture for salesperson available • Office rent and utilities paid by E.M.S.S. / M&P Industries • Storage available • Office management by experienced personnel • Various items: postage, mail distribution, small gifts, refreshments

Total cost per manufacturer € 65.000,00 (approx. USD. 84.000,00) per year The cost is based on a full year usage of the services. Minimum duration of the service contract is 6 months, with a one month notice. Payment terms: 50 % at award of contract; 25 % after 3 months; 25 % after 6 months. There is no restriction to the amount of times nor the duration of the services required during the contract period. The “extended package” will be quoted upon request.

Cost comparison Why should you adopt the “basic E.M.S.S. / M&P Industries approach”, why not set up your own office or subsidiary? Here is why! When establishing a subsidiary in a foreign country a lot of issues have to be adressed. The legal status of your subsidiary, employement -, hiring – and firing practices, taks and social security laws, rental or lease of cars, what is the right location to settle. All issues that need an answer before you can comfortably devote yourself to the real purpose of being overseas, the marketing and sales of your products. Based on our experiences with companies that have established themselves, following is a summary cost breakdown as compared to the cost picture given in the E.M.S.S. / M&P Industries approach. Total estimated cost for own subsidiary is € 324.000,00 (USD. 420.000,00) * for the first year. Compare these cost of approx € 27.000,00 per month versus the estimated cost of € 5.400,00 per month as described in the E.M.S.S. / M&P Industries approach and it is obvious that there is NO better and cheaper way of doing business overseas than the E.M.S.S. / M&P Industries way!! *) see the itemized statement

Itemized statement of cost in the first year for own subsidiary

Foundation cost of legal entity € 18.000,00

Salary 2 salesmen, 1 secretary + 1 controller € 235.000,00

Office rent, furniture € 30.000,00

Car lease/rental € 20.000,00

Advertisement cost € 2.500,00

Utilities € 2.500,00

Communication fascilities € 3.000,00

Stationary € 2.500,00

Postage € 2.500,00

Administration / Audits € 5.000,00

Miscellaneous € 3.000,00

Total estimated cost € 324.000,00

Estimated cost E.M.S.S. / M&P approach € 65.000,00

Profitable advantage € 259.000,00

Contact information Mr. Rudi van der Poel Managing Director