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AISSA
INTERNATIONAL DEVELOPMENT POTENTIAL:ASPLEOL ACTIVITY
INTERNATIONAL DEVELOPMENT MANAGEMENT ESPAÑOLA, S.A.
“““““LA INFORMACION CONTENIDA EN ESTE DOCUMENTO, PROPIEDAD DE IDM ESPAÑOLA ES ESTRICTAMENTE CONFIDENCIAL, QUEDANDO PROHIBIDA SU REPRODUCCION TOTAL O PARCIAL O LA UTILIZACION INDEBIDA SIN SU CONSENTIMIENTO POR ESCRITO,RESERVANDOSE LAS ACCIONES LEGALES A QUE HUBIERA LUGAR EN FUNCION DE LOS PERJUICIOS OCASIONADOS A IDM ESPAÑOLA, S.A. O A SUS CLIENTES ”””””THE INFORMATION CONTAINED IN THIS DOCUMENT IS PROPERTY OF IDM ESPAÑOLA, S.A. AND IT ISSTRICTLY CONFIDENTIAL. NO PART OF IT MAY BE REPRODUCED OR UNDULY USED WITHOUT ITS WRITTEN PERMISSION. ACCORDINGLY ANY DAMAGES INFLICTED TO IDM ESPAÑOLA, S.A. OR ITS CLIENTS WILL BE ADEQUATELY PROSECUTED”””””
PADRE DAMIAN, 23 - 28036 MADRID - TEL. (34) 913-533-810 - FAX (34) 913-596-988 - E-MAIL: [email protected] - http://www.infonegocio.com/idmespa
AZ/10/04/AAA/051
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 2
AISSA’S ASPLEOL ACTIVITY
The Aspleol
The aspleol is a semi-finished metallic product which sales are measured in units, being the Governments of the different Countriesits consumers. Before its direct usage a final pressing stage is required, that allows for the identification of the Country of origin.
The Aspleol
The aspleol is a semi-finished metallic product which sales are measured in units, being the Governments of the different Countriesits consumers. Before its direct usage a final pressing stage is required, that allows for the identification of the Country of origin.
INTERNATIONAL DEVELOPMENT POTENTIALINTRODUCTION
This document is a selected summary on the different materials developed by IDM Española, S.A., in order to solve a real businesssituation, for which its services were requested. With the only purpose of preserving client’s confidentiality, some identities, prod-ucts or dates might have been deliberately altered.
This document is a selected summary on the different materials developed by IDM Española, S.A., in order to solve a real businesssituation, for which its services were requested. With the only purpose of preserving client’s confidentiality, some identities, prod-ucts or dates might have been deliberately altered.
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 3
AISSA’S ASPLEOL ACTIVITY AGENDA
INTERNATIONAL DEVELOPMENT POTENTIAL
∗SUMMARY OF CONTACTS
∗PROFILE OF THE ASPLEOL ACTIVITY OF AISSA
∗ANALYSIS OF THE WORLDWIDE MARKETS FOR ASPLEOL
−USA *
−JAPAN
−GERMANY *
−MEXICO
−CANADA
−UNITED KINGDOM
∗ANALYSIS OF THE TECHNOLOGICAL EVOLUTION
∗STRATEGIC ANALYSIS OF BM LTD.
∗SUMMARY AND NEXT STEPS
−FRANCE
−INDIA
−AUSTRALIA
−ITALY
−BELGIUM
−REST OF THE WORLD *
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 4
AISSA’S ASPLEOL ACTIVITY SUMMARY
MAIN CONTACTS DEVELOPED
GERMANY
CONTACT 1 METALS OFFICE PLANNING DEPARTMENTCONTACT 2 COMMERCIAL DIRECTOR COMPETITOR 1CONTACT 3 COMMERCIAL DIRECTOR SUPPLIER 1CONTACT 4 SALESMAN SUPPLIER 2CONTACT 5 DIRECTOR NATIONAL CONSUMER, STUTTGARTCONTACT 6 COMMERCIAL DIRECTOR COMPETITOR 2CONTACT 7 COMMERCIAL DIRECTOR COMPETITOR 3CONTACT 8 COMMERCIAL EXPERT ASPLEOL
BELGIUM
CONTACT 9 COMMERCIAL DIRECTOR COMPETITOR 1CONTACT 10 SALESMAN NATIONAL CONSUMER
CANADA
CONTACT 11 INTERNATIONAL DEPARTMENT NATIONAL CONSUMERCONTACT 12 MARKETING DEPARTMENT COMPETITOR 1
SPAIN
CONTACT 13 COMMERCIAL DIRECTOR COMPETITOR 1CONTACT 14 COMMERCIAL DIRECTOR COMPETITOR 2CONTACT 15 DIRECTOR NATIONAL CONSUMERCONTACT 16 GENERAL MANAGER MANUFACTURERS’ ASSOCIATIONCONTACT 17 SALESMAN COMPETITOR 5
FRANCE
CONTACT 18 PUBLICATIONS DEPARTMENT NATIONAL CONSUMERCONTACT 19 DIRECTOR NATIONAL CONSUMER, BORDEAUXCONTACT 20 MARKETING DEPARTMENT COMPETITOR 1CONTACT 21 MARKETING EXPERT
GREECE
CONTACT 22 SALESMAN NATIONAL CONSUMER
ITALY
CONTACT 23 SALESMAN COMPETITOR 1CONTACT 24 SALESMAN NATIONAL CONSUMER
PORTUGAL
CONTACT 25 COMMERCIAL DIRECTOR NATIONAL CONSUMER
UNITED KINGDOM
CONTACT 26 MARKETING DEPARTMENT BM LTD.CONTACT 27 GENERAL MANAGER. BM LTD.CONTACT 28 TECHNICIAN SUPPLIER 1CONTACT 29 MARKETING DEPARTMENT ASPLEOL MAGAZINECONTACT 30 MANAGER METALS ANALYSIS FIRMCONTACT 31 CONSULTANT METALS ANALYSIS FIRMCONTACT 32 ASPLEOL DIVISION DEALER 1CONTACT 33 INFORMATION DEPARTMENT, METALS OFFICECONTACT 34 MARKETING DEPARTMENT, COMPETITOR 2CONTACT 35 MARKETING DEPARTMENT, SUPPLIER 2CONTACT 36 MARKETING DIRECTOR, COMPETITOR 3CONTACT 37 MARKETING DEPARTMENT, SUPPLIER 3CONTACT 38 TECHNICIAN, NATIONAL CONSUMERCONTACT 39 COMMERCIAL DIRECTOR NATIONAL CONSUMERCONTACT 40 PLANNING DEPARTMENT, NATIONAL CONSUMERCONTACT 41 PUBLICATIONS DEPARTMENT NATIONAL CONSUMERCONTACT 42 ASPLEOL DEALER 2CONTACT 43 ASPLEOL EXPERTCONTACT 44 TECHNICAL EXPERT
SWITZERLAND
CONTACT 45 MARKETING DEPARTMENT, MARKETS ANALYSTS
UNITED STATES
CONTACT 46 ASPLEOL DIVISION, COMPETITOR 1CONTACT 47 DIRECTOR, ASPLEOL DIVISION, COMPETITOR 2CONTACT 48 MARKETING DEPARTMENT, METAL ANALYSTSCONTACT 49 PLANNING DEPARTMENT, NATIONAL CONSUMERCONTACT 50 INTERNATIONAL DEPARTMENT, NATIONAL CONSUMERCONTACT 51 PUBLICATIONS DEPARTMENT, NATIONAL CONSUMERCONTACT 52 PUBLICATIONS DEPARTMENT, NATIONAL CONSUMER
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 5
AISSA’S ASPLEOL ACTIVITY BRIEF COMPANY PROFILE
∗Installed capacity of 4,000 Mt/year (400 to 700 Million units), accounting for ±25% of Aissa’s turnover
∗Lacking of final pressing equipments
∗Alloys currently developed
−Nickel - Copper
−Aluminium- Bronze
∗Limited international experience
−Portugal
−Mexico
−Germany
∗Installed capacity of 4,000 Mt/year (400 to 700 Million units), accounting for ±25% of Aissa’s turnover
∗Lacking of final pressing equipments
∗Alloys currently developed
−Nickel - Copper
−Aluminium- Bronze
∗Limited international experience
−Portugal
−Mexico
−Germany
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 6
AISSA’S ASPLEOL ACTIVITY AGENDA
INTERNATIONAL DEVELOPMENT POTENTIAL
∗SUMMARY OF CONTACTS
∗PROFILE OF THE ASPLEOL ACTIVITY OF AISSA
∗ANALYSIS OF THE WORLDWIDE MARKETS FOR ASPLEOL
−USA *
−JAPAN
−GERMANY *
−MEXICO
−CANADA
−UNITED KINGDOM
∗ANALYSIS OF THE TECHNOLOGICAL EVOLUTION
∗STRATEGIC ANALYSIS OF BM LTD.
∗SUMMARY AND NEXT STEPS
−FRANCE
−INDIA
−AUSTRALIA
−ITALY
−BELGIUM
−REST OF THE WORLD *
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 7
AISSA’S ASPLEOL ACTIVITY KEY FACTORS
WORLDWIDE DEMAND FOR ASPLEOL
…show that the Worldwide market for aspleol is extremely volatile
−Need for highly flexible production systems/equipments
…show that the Worldwide market for aspleol is extremely volatile
−Need for highly flexible production systems/equipments
∗Stock level at the end of the previous period
−Shrinkage rate
∗Variation of static stock
−Population variation
−Inflation
∗Variation of the dynamic stock
−Variation of national income
−Price levels
−Development level
∗Non-economic factors
−Changes in aspleol’s components
−Political events
∗Stock level at the end of the previous period
−Shrinkage rate
∗Variation of static stock
−Population variation
−Inflation
∗Variation of the dynamic stock
−Variation of national income
−Price levels
−Development level
∗Non-economic factors
−Changes in aspleol’s components
−Political events
…the great relevance of non-economic factors,...
−The United Kingdom, that has a basedemand of 400-500 Million units per year,had a demand of 4,500 Million in 1995
…and the difficulty in predicting the demandbased on economic factors: Predictions of theUSA national consumer on aspleol needs for2002:
−June 2001 forecast: 15,522 Million units
−May 2002 forecast : 9,786 Million units
…the great relevance of non-economic factors,...
−The United Kingdom, that has a basedemand of 400-500 Million units per year,had a demand of 4,500 Million in 1995
…and the difficulty in predicting the demandbased on economic factors: Predictions of theUSA national consumer on aspleol needs for2002:
−June 2001 forecast: 15,522 Million units
−May 2002 forecast : 9,786 Million units
But...
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 8
AISSA’S ASPLEOL ACTIVITY WORLDWIDE PRODUCTION OF ASPLEOLEVOLUTION (1993-02)
0
5
10
15
20
25
30
35
40
1993 94 95 96 97 98 99 00 01 02
ANNUAL PRODUCTION OF ASPLEOL (BILLION UNITS)
Grand Total
USA
CAGR(1993-02) (2000-02)
(1.1)% (8.2)%
3.2% (4.3)%
(4.8)% (12.6)%
∗The Worldwide market for aspleol is verycyclical
−Production change from 1995 to 2000of 23.0%
∗Suffering from a strong decline since 2000
−CAGR of (8.2)%
∗The Worldwide market for aspleol is verycyclical
−Production change from 1995 to 2000of 23.0%
∗Suffering from a strong decline since 2000
−CAGR of (8.2)%
Rest of World, except USA
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 9
AISSA’S ASPLEOL ACTIVITY WORLDWIDE MARKET OF ASPLEOLCURRENT SITUATION
“The aspleol activity cannot be considered today as a profits generator. Everybody tries to barely cover variable costs, earning verylimited margins”
(Marketing Director, Competitor USA)
“There is a great level of overcapacity in this industry. In South America, it is easy to find 12 suppliers competing for every aspleolorder”
(Marketing Representative for Latin America, Canadian Competitor)
“In the aspleol industry, there are high overcapacity levels. Due to the strong demand during the sixties-seventies, a strong growthin supply capacity was generated...”
(Commercial Director, National Consumer U.K.)
“If supply equals two, demand equals one”(Commercial Expert on Aspleol)
“The situation of the aspleol market is the worst I have ever seen... To the problem of price reductions, you have to add the liquiditycrisis of Third World countries”
(Commercial Director, German Competitor)
“The aspleol activity cannot be considered today as a profits generator. Everybody tries to barely cover variable costs, earning verylimited margins”
(Marketing Director, Competitor USA)
“There is a great level of overcapacity in this industry. In South America, it is easy to find 12 suppliers competing for every aspleolorder”
(Marketing Representative for Latin America, Canadian Competitor)
“In the aspleol industry, there are high overcapacity levels. Due to the strong demand during the sixties-seventies, a strong growthin supply capacity was generated...”
(Commercial Director, National Consumer U.K.)
“If supply equals two, demand equals one”(Commercial Expert on Aspleol)
“The situation of the aspleol market is the worst I have ever seen... To the problem of price reductions, you have to add the liquiditycrisis of Third World countries”
(Commercial Director, German Competitor)
The Worldwide aspleol market is suffering currently a strong decline, making impossible to generate profits with conventional tech-nologies
The Worldwide aspleol market is suffering currently a strong decline, making impossible to generate profits with conventional tech-nologies
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 10
AISSA’S ASPLEOL ACTIVITY ANNUAL PRESSING OF ASPLEOLBREAKDOWN BY COUNTRIES (1993-02)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1993 94 95 96 97 98 99 00 01 02
ANNUAL PRESSING OF ASPLEOL (PERCENTAGE)
* PERIOD 1993-01, AS THERE WAS NOT ANY PRODUCTION IN 2002
CAGR(1993-02)
OTHERBELGIUM (*)ITALYAUSTRALIAINDIAFRANCEU.K.SPAINCANADAMEXICOGERMANYJAPAN
(8.6)% 19.2% 9.7% (9.8)% (6,9)% 5.7% (11.7)% 9.8% 0.3% 0.9% 3.4% (8.4)%
USA 3.2%
∗Decrease or very limited growth in main mar-kets, with the exception of the USA, Spain,France and Italy
∗Additionally, the rest-of-the-World markets,where most exports take place, collapsed,CAGR of (8.6)%
∗Very limited possibilities for aspleol exportsat present
∗Decrease or very limited growth in main mar-kets, with the exception of the USA, Spain,France and Italy
∗Additionally, the rest-of-the-World markets,where most exports take place, collapsed,CAGR of (8.6)%
∗Very limited possibilities for aspleol exportsat present
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 11
AISSA’S ASPLEOL ACTIVITY AGENDA
INTERNATIONAL DEVELOPMENT POTENTIAL
∗SUMMARY OF CONTACTS
∗PROFILE OF THE ASPLEOL ACTIVITY OF AISSA
∗ANALYSIS OF THE WORLDWIDE MARKETS FOR ASPLEOL
−USA *
−JAPAN
−GERMANY *
−MEXICO
−CANADA
−UNITED KINGDOM
∗ANALYSIS OF THE TECHNOLOGICAL EVOLUTION
∗STRATEGIC ANALYSIS OF BM LTD.
∗SUMMARY AND NEXT STEPS
−FRANCE
−INDIA
−AUSTRALIA
−ITALY
−BELGIUM
−REST OF THE WORLD *
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 12
AISSA’S ASPLEOL ACTIVITY USA NATIONAL CONSUMERBRIEF PROFILE
∗Total production of aspleol in 2002 17,898 million units
Aspleol production for foreign markets in 2002 46 million units
∗Installed capacity of 18,750 million units/year:
−Plant 1 8,720 million units
−Plant 2 8,530 million units
−Plant 3 1,500 million units
∗Has the technical capacity for direct final pressing of aspleol from sheet, without the need for any intermediate stages
∗Over 98% of sheet/aspleol supplies purchased from outside sources
−2002 requirements for Nickel-Copper “sandwich” sheet were 16,000 Mt
−2002 requirements for Nickel-Copper sheet were 8,700 Mt
−2002 requirements for Copper-plated Zinc aspleol were 13,900 Million units
∗Total production of aspleol in 2002 17,898 million units
Aspleol production for foreign markets in 2002 46 million units
∗Installed capacity of 18,750 million units/year:
−Plant 1 8,720 million units
−Plant 2 8,530 million units
−Plant 3 1,500 million units
∗Has the technical capacity for direct final pressing of aspleol from sheet, without the need for any intermediate stages
∗Over 98% of sheet/aspleol supplies purchased from outside sources
−2002 requirements for Nickel-Copper “sandwich” sheet were 16,000 Mt
−2002 requirements for Nickel-Copper sheet were 8,700 Mt
−2002 requirements for Copper-plated Zinc aspleol were 13,900 Million units
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 13
AISSA’S ASPLEOL ACTIVITY PRESSED ASPLEOL EVOLUTIONUSA (1992-02)
0
2
4
6
8
10
12
14
16
18
20
1992 93 94 95 96 97 98 99 00 01 02
ANNUAL PRESSING OF ASPLEOL (BILLION UNITS) ZINC-COPPER
NICKEL-COPPER
"SANDWICH"
ELECTRO-PLATING
CAGR(1992-02)
0.9%
∗The penetration of the new electro-platingand the “sandwich” techniques is alreadyhigher than 93%
∗The penetration of the new electro-platingand the “sandwich” techniques is alreadyhigher than 93%
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 14
AISSA’S ASPLEOL ACTIVITY AGENDA
INTERNATIONAL DEVELOPMENT POTENTIAL
∗SUMMARY OF CONTACTS
∗PROFILE OF THE ASPLEOL ACTIVITY OF AISSA
∗ANALYSIS OF THE WORLDWIDE MARKETS FOR ASPLEOL
−USA *
−JAPAN
−GERMANY *
−MEXICO
−CANADA
−UNITED KINGDOM
∗ANALYSIS OF THE TECHNOLOGICAL EVOLUTION
∗STRATEGIC ANALYSIS OF BM LTD.
∗SUMMARY AND NEXT STEPS
−FRANCE
−INDIA
−AUSTRALIA
−ITALY
−BELGIUM
−REST OF THE WORLD *
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 15
AISSA’S ASPLEOL ACTIVITY COMPETITOR # 1 GERMANYBRIEF PROFILE
∗Subsidiary of the M Group M Group Competitor 1
∗Revenues (2001/02) € 5,603 Million € 362 Million
∗Operating profits (2001/02) € 506 Million € 84 Million
∗It is the leading German manufacturer of aspleol, collaborating with the German National Consumer on final pressing for international orders
∗Exports account for 65% of its turnover, having Delegates in twelve countries and representative agents in other eighteen countries
∗Pioneer of the “sandwich” technique
∗Other group activities
−Trade of minerals, metals and raw materials
−Mining activities
−Metals production
−Automotive components manufacturing
−Engineering
−Chemical products
−Nickel application techniques
∗Subsidiary of the M Group M Group Competitor 1
∗Revenues (2001/02) € 5,603 Million € 362 Million
∗Operating profits (2001/02) € 506 Million € 84 Million
∗It is the leading German manufacturer of aspleol, collaborating with the German National Consumer on final pressing for international orders
∗Exports account for 65% of its turnover, having Delegates in twelve countries and representative agents in other eighteen countries
∗Pioneer of the “sandwich” technique
∗Other group activities
−Trade of minerals, metals and raw materials
−Mining activities
−Metals production
−Automotive components manufacturing
−Engineering
−Chemical products
−Nickel application techniques
SOURCES: ANNUAL REPORT AND CATALOGUE, IDM INTERVIEWS
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 16
AISSA’S ASPLEOL ACTIVITY
∗Turnover for the (2001/02) fiscal year of € 123 Million
∗Second German manufacturer by size with installed capacity for pressed/non-pressed aspleol over 2,500 Million units per year
∗Strongly focused on export markets
−Key foreign supplier for both France and the USA
−Having developed for the Latin-American markets a proprietary method of the electro-plating technology
∗Other activities
−Production of metal sheets
−Manufacturing of metal pressed components
−Manufacturing of electric components: switches, cables
−Manufacturing of precision metal-components
−Manufacturing of cutlery and kitchenware products
∗Turnover for the (2001/02) fiscal year of € 123 Million
∗Second German manufacturer by size with installed capacity for pressed/non-pressed aspleol over 2,500 Million units per year
∗Strongly focused on export markets
−Key foreign supplier for both France and the USA
−Having developed for the Latin-American markets a proprietary method of the electro-plating technology
∗Other activities
−Production of metal sheets
−Manufacturing of metal pressed components
−Manufacturing of electric components: switches, cables
−Manufacturing of precision metal-components
−Manufacturing of cutlery and kitchenware products
SOURCES: PRODUCTS CATALOGUE, IDM INTERVIEWS
COMPETITOR # 2 GERMANYBRIEF PROFILE
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 17
AISSA’S ASPLEOL ACTIVITY EVOLUTION OF ASPLEOL PRESSINGGERMANY (1992-02)
0,000
0,200
0,400
0,600
0,800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
1992 93 94 95 96 97 98 99 00 01 02
ANNUAL PRESSING OF ASPLEOL (MILLION UNITS)
NICKEL-COPPER
"SANDWICH"
CAGR(1992-02)
0.6%
∗Market almost totally captive of the Germanproducers
∗Limited use of Nickel-Copper (< 10%)
∗Market almost totally captive of the Germanproducers
∗Limited use of Nickel-Copper (< 10%)
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 18
AISSA’S ASPLEOL ACTIVITY AGENDA
INTERNATIONAL DEVELOPMENT POTENTIAL
∗SUMMARY OF CONTACTS
∗PROFILE OF THE ASPLEOL ACTIVITY OF AISSA
∗ANALYSIS OF THE WORLDWIDE MARKETS FOR ASPLEOL
−USA *
−JAPAN
−GERMANY *
−MEXICO
−CANADA
−UNITED KINGDOM
∗ANALYSIS OF THE TECHNOLOGICAL EVOLUTION
∗STRATEGIC ANALYSIS OF BM LTD.
∗SUMMARY AND NEXT STEPS
−FRANCE
−INDIA
−AUSTRALIA
−ITALY
−BELGIUM
−REST OF THE WORLD *
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 19
AISSA’S ASPLEOL ACTIVITY EVOLUTION OF ASPLEOL PRESSINGREST OF THE WORLD (1993-02)
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
10.000
1993 94 95 96 97 98 99 00 01 02
ANNUAL WORLDWIDE PRESSING (MILLION UNITS)
CAGR(1993-02)
(8.6)%
∗Rest of the world markets contracting stronglyduring the 1993-02 period, CAGR of (8.6)% andvery volatile
−Main reason for the collapse of Worldwideaspleol exports
∗These markets justifying also the existence ofthe UK National Consumer Consortium
−“Most Countries would prefer their aspleolbeing pressed by the Government of anotherCountry, instead of a private company. Theyfeel more secure”
(General Manager, UK National Consumer)
∗Rest of the world markets contracting stronglyduring the 1993-02 period, CAGR of (8.6)% andvery volatile
−Main reason for the collapse of Worldwideaspleol exports
∗These markets justifying also the existence ofthe UK National Consumer Consortium
−“Most Countries would prefer their aspleolbeing pressed by the Government of anotherCountry, instead of a private company. Theyfeel more secure”
(General Manager, UK National Consumer)
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 20
AISSA’S ASPLEOL ACTIVITY AGENDA
INTERNATIONAL DEVELOPMENT POTENTIAL
∗SUMMARY OF CONTACTS
∗PROFILE OF THE ASPLEOL ACTIVITY OF AISSA
∗ANALYSIS OF THE WORLDWIDE MARKETS FOR ASPLEOL
−USA *
−JAPAN
−GERMANY *
−MEXICO
−CANADA
−UNITED KINGDOM
∗ANALYSIS OF THE TECHNOLOGICAL EVOLUTION
∗STRATEGIC ANALYSIS OF BM LTD.
∗SUMMARY AND NEXT STEPS
−FRANCE
−INDIA
−AUSTRALIA
−ITALY
−BELGIUM
−REST OF THE WORLD *
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 21
AISSA’S ASPLEOL ACTIVITY EVOLUTION OF WORLDWIDE ASPLEOL PRODUCTION BREAKDOWN BY ALLOY-TYPE (1993-02)
∗Limited presence of Nickel-Copper alloys(< 15%)
∗Strong emergence and development of theelectro-plating and to a lesser extent, ofthe “sandwich” techniques
∗Limited presence of Nickel-Copper alloys(< 15%)
∗Strong emergence and development of theelectro-plating and to a lesser extent, ofthe “sandwich” techniques
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1993 94 95 96 97 98 99 00 01 02
ANNUAL ASPLEOL PRODUCTION(PERCENTAGE)
NICKEL
STEEL-BASED
"SANDWICH"
ELECTRO-PLATING
COPPER-BASED ALLOYS
NICKEL-COPPER
ALUMINIUM-BASED
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 22
AISSA’S ASPLEOL ACTIVITY WORLDWIDE ASPLEOL PRODUCTIONBREAKDOWN BY SIZE (2002)
0%
20%
40%
60%
80%
100%
ANNUAL WORLDWIDE PRODUCTION (PERCENTAGE)
LARGE SIZES *
INTERMEDIATE SIZES
SMALLER SIZE
* SIZES EQUAL OR BIGGER THAN 100 TIMES THE SMALLER SIZE
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 23
AISSA’S ASPLEOL ACTIVITY WORLDWIDE ASPLEOL PRODUCTION OF SMALLER SIZEBREAKDOWN BY ALLOY-TYPE (2002)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
WORLDWIDE ASPLEOL PRODUCTION (PERCENTAGE)
"SANDWICH"
ALUMINIUM-BASED
CU-ZNCU-SN-ZNCU-AL-NICU-NI
ELECTRO-PLATING
COPPER-BASEDALLOYS
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 24
AISSA’S ASPLEOL ACTIVITY ASPLEOL PRODUCTION COSTS COMPARISONDIFFERENT TECHNOLOGIES
Aissa lacks the adequate technology forcompeting successfully in the smaller sizeaspleol market segment
Aissa lacks the adequate technology forcompeting successfully in the smaller sizeaspleol market segment
0
50
100
150
200
250
300
350
INDEX (NICKEL-PLATED STEEL = 100)
0.34¢0.37¢
0.41¢
0.67¢
Raw materials
AISSA
Manufacturing costs
1.03¢
USA'S ASPLEOL SIZE 1
NICKEL-PLATED STEEL
COPPER-PLATED ZINC
ALUMINIUMWITH SOMEMAGNESIUM
COPPER,ALUMINIUMAND NICKEL
COPPER"SANDWICH"OF STEEL
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 25
AISSA’S ASPLEOL ACTIVITY WORLDWIDE ASPLEOL PRODUCTION OF INTERMEDIATE SIZESBREAKDOWN BY ALLOY-TYPE (2002)
∗Market segment in which Aissa shouldconcentrate its efforts
−Copper-based alloys accounting forover 40% of the segment
∗Unfortunately a low margin segment
∗Market segment in which Aissa shouldconcentrate its efforts
−Copper-based alloys accounting forover 40% of the segment
∗Unfortunately a low margin segment
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
WORLDWIDE ASPLEOL PRODUCTION (PERCENTAGE)
NICKELOTHERCU-ZN
CU-SN-ZN
CU-AL-NI
CU-NI
ALUMINIUM-BASED
STEEL-BASED
"SANDWICH"
COPPER-BASEDALLOYS
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 26
AISSA’S ASPLEOL ACTIVITY WORLDWIDE ASPLEOL PRODUCTION OF BIGGER SIZES (*)BREAKDOWN BY ALLOY-TYPE (2002)
Area theoretically open to Aissa, but difficultto penetrate, given Aissa’s lack of final press-ing equipments and image
Area theoretically open to Aissa, but difficultto penetrate, given Aissa’s lack of final press-ing equipments and image
(*) SIZE EQUAL OR BIGGER THAN 100 TIMES THE SMALLER SIZE
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
WORLDWIDE ASPLEOL PRODUCTION (PERCENTAGE)
NICKEL
OTHER
CU-AL-NI
"SANDWICH"
COPPER-BASED
COPPER-NICKEL
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 27
AISSA’S ASPLEOL ACTIVITY
−FRANCE
−INDIA
−AUSTRALIA
−ITALY
−BELGIUM
−REST OF THE WORLD *
∗SUMMARY OF CONTACTS
∗PROFILE OF THE ASPLEOL ACTIVITY OF AISSA
∗ANALYSIS OF THE WORLDWIDE MARKETS FOR ASPLEOL
−USA *
−JAPAN
−GERMANY *
−MEXICO
−CANADA
−UNITED KINGDOM
∗ANALYSIS OF THE TECHNOLOGICAL EVOLUTION
∗STRATEGIC ANALYSIS OF BM LTD.
∗SUMMARY AND NEXT STEPS
AGENDAINTERNATIONAL DEVELOPMENT POTENTIAL
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 28
AISSA’S ASPLEOL ACTIVITY BM LTD.BRIEF PROFILE
∗Turnover for the 2001/02 period £ 26.9 Million (+14%)
∗Profit before taxes for the 2001/02 period £ 1.6 Million (+70%)
∗Installed aspleol capacity of 700 Million units/year, having discontinued the non-pressed aspleol activity in March 2001, due toits low profitability levels
−Accounting for 40 to 50% of the total turnover
∗Aspleol activity being only international
−Limitations for the final pressing activity in the United Kingdom
−Member of the consortium with the United Kingdom National Consumer
∗Other activities
−Manufacturing of uniforms for police forces and armies, ±20% of turnover
−Manufacturing of electrical precision components, ±20% of turnover
−Manufacturing of pressed components, ±10% of turnover
∗Quoted in the London Stock Exchange
∗Turnover for the 2001/02 period £ 26.9 Million (+14%)
∗Profit before taxes for the 2001/02 period £ 1.6 Million (+70%)
∗Installed aspleol capacity of 700 Million units/year, having discontinued the non-pressed aspleol activity in March 2001, due toits low profitability levels
−Accounting for 40 to 50% of the total turnover
∗Aspleol activity being only international
−Limitations for the final pressing activity in the United Kingdom
−Member of the consortium with the United Kingdom National Consumer
∗Other activities
−Manufacturing of uniforms for police forces and armies, ±20% of turnover
−Manufacturing of electrical precision components, ±20% of turnover
−Manufacturing of pressed components, ±10% of turnover
∗Quoted in the London Stock Exchange
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 29
AISSA’S ASPLEOL ACTIVITY BM LTD.TURNOVER AND PBIT EVOLUTION (1994-2002)
SOURCE: BM LTD. ANNUAL REPORT
100
1.000
10.000
100.000
1994/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02
THOUSAND OF CURRENT STERLING POUNDS
TURNOVER
PBIT
NEW CHAIRMAN
CAGR(95-00) (00-02)
0.2% 59%
(22)% 157%
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 30
AISSA’S ASPLEOL ACTIVITY BM LTD.TURNOVER AND PBIT BREAKDOWN (1997-98)
Aspleol accounting for
−80% of turnover
−68% of profits
Aspleol accounting for
−80% of turnover
−68% of profits
SOURCES: BM LTD. ANNUAL REPORT, PRESS-CLIPPINGS, IDM ESTIMATES
0%
20%
40%
60%
80%
100%£ 10.9 MILLION £ 576 MILLION
TURNOVER PBIT
PERCENTAGE
PRESSEDCOMPONENTS
MILITARYUNIFORMS
PRESSED ANDNON-PRESSEDASPLEOL
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 31
AISSA’S ASPLEOL ACTIVITY BM LTD.ANALYSIS OF THE ASPLEOL DIVISION
∗Cyclical activity, and for the non-pressed aspleol a commodity
−“The demand for aspleol seems to lag the economic cycle. It was only last year that recession hit demand from developed Countries, and wiped-outthat of the less-developed Countries...” (Investors Chronicle, 17-VIII-00)
−“BM Ltd. is manufacturing aspleol for third-party final pressing... Unfortunately, non-pressed aspleol manufacturing offers much lower profitabilitylevels than the ones of pressed-aspleol... Besides, there is currently a strong price competition”
(Birmingham Post, 6-XII-99; Investors Chronicle, 9-XII-99)
∗Volatile activity: focused in Third-World Countries and therefore strongly influenced by exchange rates
−“The determining factor for BM Ltd.’s profitability is aspleol demand from Third-World Countries. Knowing the volatility of this markets BM Ltd...”(Investors Chronicle, 9-XII-99)
−“We hope that the new Government will make its best to maintain the Pound exchange rates at low levels... It would be extremely beneficial for us,as 60% of our sales are export-led...” (BM Ltd. 1999 Annual Report)
∗Activity too dependent on the National Consumer: Over 50% of BM Ltd.’s exports in 1998 were made through the UK National Consumer
−“Most of BM Ltd.’s aspleol sales are obtained through the National Consumer, under a verbal agreement by which foreign contracts are subcon-tracted to BM Ltd. and another private producer. BM Ltd.’s president fears that the National Consumer may make-up any excuse to retain a biggershare of this business in its under-utilised factory” (Birmingham Post, 11-VII-00)
∗Cyclical activity, and for the non-pressed aspleol a commodity
−“The demand for aspleol seems to lag the economic cycle. It was only last year that recession hit demand from developed Countries, and wiped-outthat of the less-developed Countries...” (Investors Chronicle, 17-VIII-00)
−“BM Ltd. is manufacturing aspleol for third-party final pressing... Unfortunately, non-pressed aspleol manufacturing offers much lower profitabilitylevels than the ones of pressed-aspleol... Besides, there is currently a strong price competition”
(Birmingham Post, 6-XII-99; Investors Chronicle, 9-XII-99)
∗Volatile activity: focused in Third-World Countries and therefore strongly influenced by exchange rates
−“The determining factor for BM Ltd.’s profitability is aspleol demand from Third-World Countries. Knowing the volatility of this markets BM Ltd...”(Investors Chronicle, 9-XII-99)
−“We hope that the new Government will make its best to maintain the Pound exchange rates at low levels... It would be extremely beneficial for us,as 60% of our sales are export-led...” (BM Ltd. 1999 Annual Report)
∗Activity too dependent on the National Consumer: Over 50% of BM Ltd.’s exports in 1998 were made through the UK National Consumer
−“Most of BM Ltd.’s aspleol sales are obtained through the National Consumer, under a verbal agreement by which foreign contracts are subcon-tracted to BM Ltd. and another private producer. BM Ltd.’s president fears that the National Consumer may make-up any excuse to retain a biggershare of this business in its under-utilised factory” (Birmingham Post, 11-VII-00)
∗BM Ltd. needs to diversify to non-cyclical and non-commodity activities preferably in its home market
∗BM Ltd. needs to become independent in the marketing of its aspleol products
∗BM Ltd. needs to diversify to non-cyclical and non-commodity activities preferably in its home market
∗BM Ltd. needs to become independent in the marketing of its aspleol products
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 32
AISSA’S ASPLEOL ACTIVITY BM LTD.TURNOVER AND PBT COMPARISON (1998/99 VS 1999/00)
SOURCE: BM LTD. ANNUAL REPORTS
TURNOVER
0%
20%
40%
60%
80%
100%
1998/99 1999/00
2nd SEMESTER
1st SEMESTER
£ 9.9 MILLION £ 10.7 MILLION
PERCENTAGE
PBT
0%
20%
40%
60%
80%
100%
1998/99 1999/00
2nd SEMESTER
1st SEMESTER
£ 660 MILLION £ 334 MILLION
PERCENTAGE
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 33
AISSA’S ASPLEOL ACTIVITY BM LTD.FINANCIAL RESULTS OF THE 1ST SEMESTER (1999/00)
∗First semester’s profits decreasing to £ 38,000 from £ 267,000 in 1998/99
−“The presses of the aspleol division were working at 25% of its capacity during the worst period, before Christmas of 1999...”(Investors Chronicle, 13-VII-00)
−“The problem lies in its key activity, the manufacturing of aspleol. The collapse in the demand for aspleol... makes BM Ltd. tobe producing non-pressed aspleol for third parties in great amounts, reducing slightly their sales levels”
(Birmingham Post, 6-XII-01)
−“BM Ltd.’s chairman admits that last year, orders, at prices that could not cover overhead costs, were accepted”
(Financial Weekly, 13-VII-01)
∗First semester’s profits decreasing to £ 38,000 from £ 267,000 in 1998/99
−“The presses of the aspleol division were working at 25% of its capacity during the worst period, before Christmas of 1999...”(Investors Chronicle, 13-VII-00)
−“The problem lies in its key activity, the manufacturing of aspleol. The collapse in the demand for aspleol... makes BM Ltd. tobe producing non-pressed aspleol for third parties in great amounts, reducing slightly their sales levels”
(Birmingham Post, 6-XII-01)
−“BM Ltd.’s chairman admits that last year, orders, at prices that could not cover overhead costs, were accepted”
(Financial Weekly, 13-VII-01)
*Need for aggressive diversification and cost control policies in order to remain independent*Need for aggressive diversification and cost control policies in order to remain independent
∗The poor results led to the replacement of BM Ltd.’s chairman∗The poor results led to the replacement of BM Ltd.’s chairman
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 34
AISSA’S ASPLEOL ACTIVITY BM LTD.STRATEGY OF THE ASPLEOL DIVISION (2000-2002)
∗Costs reduction
−In 2000 substantial capital investments in aspleol production equipments were made, in order to reduce the break-even point of the aspleol division
−In March 2001, 80 people were laid-off
−“BM Ltd. is probably at present the most efficient pressed-aspleol producer in the industry”(Roger Hardman, James Capel, 5-XII-01)
∗Divestment of assets not generating revenues
−In 2000 a collection of metal alloys used for the production of aspleol by BM Ltd. was valued at £ 200,000
−In June 2001 the collection was sold for an amount of £ 250,000
∗Commodity products such as non-pressed aspleol were eliminated: In March 2001 the manufacturing of non-pressed aspleol for third-party final press-ing was discontinued
−“Towards the end of last fiscal year we analysed the part of our activities involved in the manufacturing of non-pressed aspleol for third-party finalpressing, and we reached the conclusion that, given the low margins that could be currently earned in this business, the high capital levels and over-head costs required could not be justified...”
(BM Ltd.’s Chairman, 2001 Annual Report)
∗Development of an independent marketing strategy
−In June of 2001 BM Ltd. obtained a contract with the Government of India for the manufacturing of 500 Million units of pressed aspleol throughits own contacts
−In July of 2002 the roll-over clause of the contract with the Government of India was implemented
∗Costs reduction
−In 2000 substantial capital investments in aspleol production equipments were made, in order to reduce the break-even point of the aspleol division
−In March 2001, 80 people were laid-off
−“BM Ltd. is probably at present the most efficient pressed-aspleol producer in the industry”(Roger Hardman, James Capel, 5-XII-01)
∗Divestment of assets not generating revenues
−In 2000 a collection of metal alloys used for the production of aspleol by BM Ltd. was valued at £ 200,000
−In June 2001 the collection was sold for an amount of £ 250,000
∗Commodity products such as non-pressed aspleol were eliminated: In March 2001 the manufacturing of non-pressed aspleol for third-party final press-ing was discontinued
−“Towards the end of last fiscal year we analysed the part of our activities involved in the manufacturing of non-pressed aspleol for third-party finalpressing, and we reached the conclusion that, given the low margins that could be currently earned in this business, the high capital levels and over-head costs required could not be justified...”
(BM Ltd.’s Chairman, 2001 Annual Report)
∗Development of an independent marketing strategy
−In June of 2001 BM Ltd. obtained a contract with the Government of India for the manufacturing of 500 Million units of pressed aspleol throughits own contacts
−In July of 2002 the roll-over clause of the contract with the Government of India was implemented
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 35
AISSA’S ASPLEOL ACTIVITY BM LTD.PROGRAM OF ACQUISITIONS AND OTHER PROJECTS (2000-2002)
DATE ACTION VALUE ACTIVITY RATIONALE9-II-00 Acquisition ± £ 325,000 Manufacturing of
pressed components∗ Consolidation with existing pressed components
activity: economies in overheads and manufac-turing and assets divestment
∗ Widening of its pressed components productrange
∗ Reduction of foreign dependence27-III-00 Acquisition ± £ 2,500,000 Manufacturing of
metal and bi-metalswitches
∗ Related activity, facilitating the entry into theelectric and electronic sectors
∗ Reduction of foreign dependence7-VI-01 Acquisition ± £ 1,000,000
(35% stake)Jewellery distribu-tion company
∗ Activity that will allow for the marketing of lux-ury goods, including historical aspleols...
∗ Reduction of foreign dependence9-I-02 Acquisition ± £ 250,000 Manufacturing of
cable-based compo-nents
∗ Widening of its electric components productrange
∗ Gain access to the markets of Southern England∗ Reduction of foreign dependence
July2002
New project inprogress
Marketing of cutler-ies followed by pro-duction plans
∗ Reduction of foreign dependence
July2002
New acquisitionannounced
Substantial Manufacturing ofelectric components
∗ Widening of its pressed components productrange
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 36
AISSA’S ASPLEOL ACTIVITY DESCRIPTION OF GROUP ACTIVITIES: COMPETITOR # 2 OF GERMANY
∗Production of metal sheets
∗Manufacturing of metal pressed components (BM Ltd. in 1998 and 2000)
∗Manufacturing of electric components: switches, cables (BM Ltd. in 2000 and 2002)
∗Production of pressed and non-pressed aspleol (Core common business)
∗Manufacturing of cutlery and kitchenware products (BM Ltd. in 2002)
∗Production of metal sheets
∗Manufacturing of metal pressed components (BM Ltd. in 1998 and 2000)
∗Manufacturing of electric components: switches, cables (BM Ltd. in 2000 and 2002)
∗Production of pressed and non-pressed aspleol (Core common business)
∗Manufacturing of cutlery and kitchenware products (BM Ltd. in 2002)
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 37
AISSA’S ASPLEOL ACTIVITY BM LTD.TURNOVER COMPARISON (2000/01 VS 2001/02)
TURNOVER
0%
20%
40%
60%
80%
100%
2000/01 2001/02
UNITED KINGDOM
EXPORTS
£ 10.7 MILLION £ 23.5 MILLION
71%
62%
15% reduction of BM Ltd.’s foreign dependenceduring the (2001/02) fiscal year vs the previousyear
15% reduction of BM Ltd.’s foreign dependenceduring the (2001/02) fiscal year vs the previousyear
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 38
AISSA’S ASPLEOL ACTIVITY BM LTD.TURNOVER AND PBIT BREAKDOWN (2001/02)
∗Pressed aspleol accounting for
−48% of turnover
−42% of profits
∗Equivalent share value on the 6-XII-99 of 174 p.vs 380 p. on the 11-VII-02
−Increase of BM Ltd.’s market value of 118%
∗Pressed aspleol accounting for
−48% of turnover
−42% of profits
∗Equivalent share value on the 6-XII-99 of 174 p.vs 380 p. on the 11-VII-02
−Increase of BM Ltd.’s market value of 118%
SOURCES: BM LTD ANNUAL REPORTS, PRESS-CLIPPINGS, IDM ESTIMATES
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
TURNOVER PBIT
£ 26.9 MILLION £ 1.6 MILLIONPRESSEDCOMPONENTS
MILITARYUNIFORMS
ELECTRICCOMPONENTS
PRESSEDASPLEOL
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 39
AISSA’S ASPLEOL ACTIVITY AGENDA
INTERNATIONAL DEVELOPMENT POTENTIAL
∗SUMMARY OF CONTACTS
∗PROFILE OF THE ASPLEOL ACTIVITY OF AISSA
∗ANALYSIS OF THE WORLDWIDE MARKETS FOR ASPLEOL
−USA *
−JAPAN
−GERMANY *
−MEXICO
−CANADA
−UNITED KINGDOM
∗ANALYSIS OF THE TECHNOLOGICAL EVOLUTION
∗STRATEGIC ANALYSIS OF BM LTD.
∗SUMMARY AND NEXT STEPS
−FRANCE
−INDIA
−AUSTRALIA
−ITALY
−BELGIUM
−REST OF THE WORLD *
IDM ESPAÑOLA, S.A. AZ1004AAA051/ 40
AISSA’S ASPLEOL ACTIVITY INTERNATIONAL DEVELOPMENT POTENTIALSUMMARY AND NEXT STEPS
∗The aspleol activity is tremendously volatile and cyclical, and in particular the non-pressed aspleol is currently non-profitable at an internationallevel
∗Accordingly, the export opportunities for Aissa are extremely limited due to technological reasons and the current demand collapse
∗The aspleol activity is tremendously volatile and cyclical, and in particular the non-pressed aspleol is currently non-profitable at an internationallevel
∗Accordingly, the export opportunities for Aissa are extremely limited due to technological reasons and the current demand collapse
*Need to develop “opportunistic” exporting operations
*Need to develop final pressing capabilities
*Need for flexibility of the production systems
*Need to diversify activities
*Need to reduce costs and to optimise the utilisation of assets
*Need to develop “opportunistic” exporting operations
*Need to develop final pressing capabilities
*Need for flexibility of the production systems
*Need to diversify activities
*Need to reduce costs and to optimise the utilisation of assets
*Variable-costing pricing policies
*Consortium with the National Consumer under Aissa’s control, ifpossible
*Potential horizontal integration options
*Potential vertical integration options
*Cost analysis and asset profitability evaluation
*Variable-costing pricing policies
*Consortium with the National Consumer under Aissa’s control, ifpossible
*Potential horizontal integration options
*Potential vertical integration options
*Cost analysis and asset profitability evaluation