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Balancing Risk & CostGlobal Supply Chain Shifts, New Supply Markets that Matter, Strategic Choices & Practical Considerations for the Resources Sector During Times of Uncertainty

21 Sep 2021

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• Global Procurement & Supply

• Market Expansion

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Global Markets. Connected

3Source: Axis Group Analysis

Balancing Risk & Cost - Global markets offer attractive procurement & supply options but where to start? Four key questions help us navigate – Why, Where, What and How to Source Globally?

Why? Where?

What?

How?

Global Procurement

• Several factors, such as developed

infrastructure and a low price/quality

ratio, enable certain markets to have a

competitive advantage with

regards to global sourcing

• Successful sourcing from global markets is

complex and requires a thorough and thought-

out process

• Certain markets have the capability to supply

a number of high value-added products

that meet international standards at a

competitive price

See 3 mind maps in appendix

Make vs buy Which global sourcing models? Which countries? Which suppliers? What engagement

models?

Offshore / re-shore / near

shore/ onshore?

4

Agenda

Global Risk Landscape Trade & Supply Chain Shifts Competitive Dynamics

Impact on Global Procurement & Supply in

Resources Clusters & Categories

Integration

5

Complexity in ‘Risk & Cost’ tradeoffs and supply market ‘Cluster & Category’ choices define the shifting global sourcing landscape

Clusters

Categories

Risk

Cost

6Source: Various; Axis Group Analysis

A multitude of risks converge – now what? Complexity & dynamism

Now

• Global trade war (led by US-China/US-EU/EU-China etc.)

• Upcoming US election in 2020

• Geopolitical tensions

• Technological shifts (adoption of AI / ML)

• Environmental Challenges

Amalgamation of Risks

New History

• Deep tectonic shifts• How we readjust?

• How we cope?• How we adjust?• How much worse?• Does it get better?• How we correct to the previous

state?

1 Jan 20RiskContext

Impact

Key Previous

Risks

Covid-19 Unfolds

1st & 2nd

Order Effects…

Economic Tremors

Geopolitical Quakes

• Temporary initial scare

• Health crisis• Unregulated

and irrational demand/supply of PPE

• Scramble for masks/PPE

• Initial and on-going disruption in operations

• Will it spread?

History Recent Past Next Further

Out

Stretching a piece of string?

• Ripples widen, intensify

• Lockdowns• Travel bans• Supply delays• Prolonged lead

times• Logistics

disruption• Supply Chains

in crisis

• Significant cyclical damage

• Structural adjustment

• Global decline in production & consumption

• Slow down in global trade

• Social impact

• Hairline cracks in geopolitics become discerning

• International relations order being challenged

• End of Globalisation

• De-globalisation• China’s Rise• Rise of the

digital economy• Growing

demand for low-carbon supply chains

Does the pendulum swing back?


• De-globalisation accelerated?

• Over-exposure to China

• Self-sufficiency?• Stress-testing• Inventory

buildup ‘just in case’



• Moving from ‘low cost only’ sourcing

• Drastic restructuring of the global supply chain



• Adapting to the “new normal”

• Fallout widens and organisations bunker down

• Historical proportions



• Leveraging technology

• Unprecedented ‘temporary’ societal change (At home and at work)

Way we think?

Risky World

Increased Risk

Rapid Risk Ramp Up

Deep Impact

Grave Unforeseen

Consequences

S/M Term L Term

Time

New Normal?

New Normal II?

“Dangerous tipping point or new soothing equilibrium?”

Way we live?

Way we work?

Way we do things?


Supply Chains are stressed…

8

... and key risks across the value chain create a complex environment

• Supply Risk• Raw Material Scarcity• Price Risk• Over Exposure• Sustainability• Labor Shortage• Modern Slavery T1,

T2…

• Visibility to Tier 2 Suppliers…• Container Availability• Supply Disruptions• Economic Instability• Environmental Risks

• Health & Safety of our People

• Cash Flow• Pivot vs Strategy• Digitalisation• BCP• Inventory Management

• Visibility to Tier 2 Customers…• Container Availability• Re-shoring• Data Integrity

Supply Logistics Complexity & Costs Logistics

Information Challenges Across the Risk Landscape

• Market Risk• Customer

Health• Delivery Delays• Sales Price

Demand

CustomersSuppliers

Strategy, Planning and Management

InboundSupply Chain

Core Operations and Business Processes

Outbound Supply Chain

HR Finance IT Infrastructure

• Geopolitics • Covid-19 • Attitudes, i.e.Nationalism

• Regulatory shift

• Cyclical & structural change

9Source: Australian Government Productivity Commission; Axis Group Analysis

Australian Government Productivity Commission’s Analytical Framework

Findings on Australian Imports

Australian supply chains are also stressed; however, not all vulnerable imported products are essential or critical goods

1. Vulnerable

2. Vulnerable

and essential

3. Vulnerable, essential

and critical

1 FEW IMPORTS ARE VULNERABLE TO CONCENTRATED SOURCES OF SUPPLY

2 MOST VULNERABLE IMPORTS ARE CONSUMPTION OR INTERMEDIATE GOODS

3 THE MAIN SUPPLIER OF VULNERABLE IMPORTED PRODUCTS IS CHINA

4 MANY IMPORTS CLASSIFIED AS VULNERABLE ARE NOT ESSENTIAL OR CRITICAL

5 VULNERABLE IMPORTS MAY NOT BE CRITICAL TO THE PRODUCTION OF ESSENTIAL GOODS AND SERVICES

6 ESSENTIAL INDUSTRIES USED 130 VULNERABLE IMPORTS IN PRODUCTION

7 THE INCLUSION OF FOOD DOES NOT QUALITATIVELY CHANGE RESULTS

8 THE SUPPLY OF ESSENTIAL GOODS AND SERVICES IS NOT HIGHLY SUSCEPTIBLE TO DISRUPTIONS TO IMPORTED GOODS

10Note: 1. The Australian Government Productivity Commission defines a 3 step filtering process for identifying Vulnerable Imports. Step 1 – The main supplier accounted for > 80% of Australia’s imports. Step 2 – Products are sourced from a concentrated market. Step 3 – Australia sources its supply from the main global supplier

Source: Australian Government Productivity Commission; Axis Group Analysis

Australia’s Imports of Vulnerable Products1 by Country of Origin (HS Subheading level, 8-digit)

Australia’s Imports of Vulnerable Products1 by Product Type and Origin (HS Subheading level, 8-digit)

Vulnerabilities do exist in the supply chain, with Australia’s most vulnerable imports coming from China

199

7

9

4

39

6

28

Italy

Switzerland

France

India

USA

Other

China

0 50 100 150 200 250Number of HTISC products (8-digit)

Eco

no

my

8

47

1412

1617

38

7

45

66

8

2126

3Mineral productsRaw hides, skins, leathers and furs

Stone and glassPlastics and rubbers

Animal and animal productsTransportation

Footwear and headgearFoodstuffs

Machinery and electricalMetals

Vegetable productsWood and wood products

MiscellaneousChemicals and allied industries

Textiles

0 20 40 60 80Number of HTISC products (8-digit)

Pro

duct

type

CHINUSAINIAFRANSWITITALOther

11

Important considerations for the resources sector as macro events such as the COVID pandemic and geo-political tensions amplify global supply chain risk

3 Increasing Supply Market Competitiveness• Supplier propensity to take short cuts to remain competitive

Lead

ersh

ip

Sup

ply

Focu

s Low propensity for change

Security of supply

Highest quality

Protect social licence to operate

Capability to meet requirements

Security of supply

Cost competitiveness

Maximise output On time, within budget

Them

e

Resources Value Chain

Greenfield/BrownfieldDevelopment

Operations

Reso

urce

Sta

ge

Resources Organisational Objectives Global Supply Risks for Resources

1 Capacity Constraints• Stimulus and investment soaking up capacity

2 Increased Logistics Costs• 6x increase, material impact of TCO

4 Single Source Reliance• Clusters of capability depend on the same infrastructure

5 ESG Risks• More complex, deeper supply chain – out of sight

6 Nationalism• Customer co-trade vs local development

7 Specialist Supply Skills • Sourcing and logistics capability to manage complex global

supply chains

12

International inbound supply chains: a maze – much detail, much risk

Client WarehousesDe-consolidation

BondedWarehouse

End User

Port/Airport

BondedWarehouse

International Freight

BondedWarehouse Port/AirportPort/Airport

Raw Materials

Packaging

Air & ocean;sourcing &

procurement

ComponentsSupplier /

Manufacturer ConsolidationQuality Management

Capital Equipment

Finished Product

Inbound Supply Chain Outbound Supply Chain

Supplier Mine Customer

Cost Reduction Diagnostics

Supply Country Selection

Market Studies

Spend Analysis

Price Benchmark

Supplier Shortlisting

Technical Evaluation

Negotiating &

Contracting

RFxPlant Audit

Sample Arrangement

Audits/CSR/ Modern Slavery

Buying Trips

Quality Management

3rd Party Mgmt.

Inspection Expediting

QA/QC Buy & SellExports / Imports

Consolidation / Deconsolidation

Inventory Mgmt.

Delivery / Distribution

Professional Resourcing

What needs to be managed

What needs to be done

Processing

Global Supply Markets

• China & Northeast Asia• India & South Asia• Thailand & South East Asia• South Africa & Africa• Turkey, Poland & Eastern

Europe• Mexico & Latin America

13

Aug-21*Aug

Baltic Dry Index and China & Shanghai Containerized Freight Index (y-o-y growth %, Jan 2020 – Aug 2021)

Note: SCFI is the weighted average index from Shanghai to the main ports all over the world; CCFI is based on their freight rate and volume of 12 routes around the world, reflecting changes in freight rate; The Baltic Dry Index consider 23 different shipping routes carrying coal, iron ore, grains and many other commodities and the index provides a benchmark for moving the major raw materials by sea. The Drewry Compostite World Container Index is a weighted freight rate assessment of eight major east-west trades such as Shanghai to Los Angeles andRotterdamSource: Drewry; Shanghai Shipping Exchange (SSE); Global Maritime Hub; Axis Group Analysis

Logistics has never been a bigger challenge in global supply chains and soaring sea freight costs reflects constrained shipping / container capacity

%

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug

Drewry’s composite World Container index

Shanghai-Los Angeles

Shanghai-Rotterdam

Drewry’s Composite World Container, Shanghai-Los Angeles and Shanghai-Rotterdam Index (USD, August 2019 – August 2021)

Freight rate (USD 40ft Containers)

0

100

200

300

400

500

600

Jan Mar May Jul Sep Nov Jan Mar May Jul

Shanghai Containerized Freight Index

China Containerized Freight Index

Baltic Exchange Dry Index

14

20

30

40

50

60

70

80

90

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2018 2019 2020 2021

Share of Vessels arriving on time (%, Jan 2018- Apr 2021)

Source: Sea Intelligence; ING; Axis Group Analysis

The share of vessels arriving on time at major ports around the world declined towards the end of 2020, further hitting lows of below 40% in early 2021

%

15

Agenda

Global Risk Landscape• Increased risk• Increased complexity• Increased cost• Management task

Trade & Supply Chain Shifts Competitive Dynamics



Integration

16

China has become the major trading partner for most of the world; however, new (& old) markets may challenge that as Risk/Cost views shift

1998

ChinaUSEqual

Who is the larger trading partner?

2021 Next horizon…

Different Risk/Cost views?

Offshoring to i.e China vs. reshoring to i.e. India?

Nearshoring (i.e. Mexico for

US)

Onshoring viable?

Buy vs make?

17

Rank

1990 1995 2000 2005 2010 2015 2020

Country USD bn Country Rank USD bnGlobal Export

Share %

2010‐20 CAGR %

2019‐2020 Growth %

1 USA 552 USA 583 USA 782 Germany 977 China 1,578 China 2,273 China 1 2,591 14.7 5.1 3.72 Germany 405 Germany 524 Germany 550 USA 901 USA 1,278 USA 1,502 USA 2 1,430 8.1 1.1 ‐133 Japan 320 Japan 443 Japan 479 China 762 Germany 1,268 Germany 1,329 Germany 3 1,383 7.9 0.9 ‐7.44 France 266 France 284 France 295 Japan 595 Japan 770 Japan 625 Japan 4 641 3.6 ‐1.8 ‐9.25 UK 252 UK 234 UK 295 France 434 France 512 South Korea 527 Netherlands 5 552 3.1 1.1 ‐4.36 Italy 216 Italy 230 Canada 277 UK 393 Netherlands 493 HK SAR 511 HK SAR 6 552 3.1 3.2 37 Netherlands 173 Canada 191 China 249 Italy 373 South Korea 466 France 494 South Korea 7 513 2.9 1 ‐5.48 Canada 149 Netherlands 178 Italy 240 Canada 361 Italy 447 UK 466 Italy 8 496 2.8 1 ‐7.89 Belgium 127 HK SAR 174 Netherlands 213 Netherlands 350 UK 422 Netherlands 465 France 9 489 2.8 ‐0.5 ‐12.110 Switzerland 109 Belgium 168 HK SAR 203 Belgium 336 Belgium 408 Italy 457 Mexico 10 418 2.4 3.4 ‐9.311 Russia 94 China 149 Belgium 188 HK SAR 292 HK SAR 401 Canada 409 UK 11 396 2.3 ‐0.5 ‐14.612 HK SAR 90 South Korea 125 South Korea 172 South Korea 284 Russia 397 Belgium 398 Canada 12 390 2.3 0.1 ‐12.613 Spain 84 Singapore 118 Mexico 166 Russia 241 Canada 387 Mexico 381 Singapore 13 375 2.1 0.3 ‐7.114 Sweden 73 Spain 90 Taiwan, China 148 Singapore 230 Singapore 353 Singapore 358 Taiwan, China 14 347 2.0 2.4 5.315 South Korea 71 Switzerland 82 Singapore 138 Mexico 214 Mexico 298 Russia 344 Russia 15 347 2.0 ‐1.3 ‐18.616 Singapore 64 Mexico 80 Spain 113 Spain 193 Taiwan, China 274 UAE 300 Switzerland 16 318 1.8 5 1.417 Austria 59 Sweden 77 Russia 103 Taiwan, China 189 Saudi Arabia 251 Switzerland 292 Spain 17 312 1.8 2.3 ‐7.518 Denmark 50 Malaysia 74 Malaysia 98 Saudi Arabia 180 Spain 246 Taiwan, China 280 UAE 18 306 1.8 4.4 ‐21.319 China 49 Austria 58 Sweden 87 Malaysia 142 India 220 Spain 277 Belgium 19 298 1.7 0.8 ‐4.220 Mexico 49 Thailand 56 Switzerland 80 Switzerland 131 Australia 212 India 264 Vietnam 20 283 1.6 14.6 6.821 Saudi Arabia 47 Australia 53 Saudi Arabia 77 Sweden 130 Brazil 202 Thailand 214 India 21 275 1.6 2.2 ‐14.922 Norway 47 Saudi Arabia 49 Ireland 76 Brazil 119 Malaysia 199 Saudi Arabia 204 Poland 22 254 1.4 4.9 0.823 Australia 47 Denmark 49 Thailand 69 Austria 118 UAE 198 Malaysia 200 Australia 23 245 1.4 1.5 ‐824 Brazil 38 Brazil 47 Australia 64 UAE 115 Switzerland 196 Poland 194 Malaysia 24 234 1.3 1.6 ‐1.725 Malaysia 33 Indonesia 45 Austria 64 Thailand 110 Thailand 195 Brazil 191 Thailand 25 229 1.3 1.6 ‐1.926 Finland 31 Ireland 44 Indonesia 62 Ireland 110 Sweden 158 Australia 188 Brazil 26 209 1.2 0.4 ‐5.527 Thailand 29 Norway 42 Norway 60 Australia 106 Indonesia 158 Vietnam 162 Czechia 27 192 1.1 3.8 ‐3.728 Indonesia 29 Finland 40 Brazil 55 Norway 104 Poland 157 Czechia 157 Ireland 28 184 1.0 4.3 7.829 South Africa 27 India 32 Denmark 49 India 100 Austria 145 Indonesia 150 Saudi Arabia 29 177 1.0 ‐3.4 ‐29.930 Ireland 27 Portugal 23 Finland 45 Poland 89 Czechia 132 Austria 145 Turkey 30 170 1.0 4.1 ‐6

Top 30 14,597 85.6 1.9 ‐6.2Other Countries1 1,652 14.4 ‐5Global Total1 16,249 100 0.9

1 Calculated based on latest available dataSource: UN Comtrade; World’s Top Exports; Statista; World Bank; Axis Group Analysis

China, several high-income economies and new challengers from developing countries are the winners in global exports; there are also several losers

3 – 4.5%Above 4.5%

0 – 2.9%Below 0%

CAGR %Top 30 entry (after 1990) Last record in top 30Peak rank

Global top 30 exporters (1990-2020); 2010-20 CAGR; 2019 global share; 2019-2020 export growth

AsiaLatamEastern EuropeHigh Income

Positive growth

Negative growth

Countries that rank highest in 20202020 rank higher (or same) as in 1990 but not peakCountries with lower rank in 2020 than in 1990

Key Highlights: USA, Germany, Japan, Netherlands, France and Italy remained in the top 10. Canada, Belgium and Switzerland left top 10.

China, South Korea, HK SAR (China) and Mexico entered top 10. Vietnam, Poland, Czechia and Turkey entered as new top 30 challengers. Various EU countries and South Africa left top 30

18

World’s Major Exporters (2020)

Source: IMF; UN Comtrade; Axis Group Analysis

China was by far the largest global exporter in 2020, with total exports of USD 2.59tn, making up 18% of its GDP

0

500

1 000

1 500

2 000

2 500

3 000

3 500

0 20 40 60 80 100 120 140 160

Global Exports (USD bn)

2000 6,4522010 15,3022020 17,582CAGR (2010-2020) 1.4%

South Korea

SingaporeJapan

IndiaVietnam

Taiwan (China)

AustraliaThailand

Malaysia

HK SAR has a GDP of USD 52bn, whose exports are 158% of its GDP size

Singapore is a major shipping hub in SEA region. Its imports and exports are both very large relative to its GDP

China

Exports (USD bn)

Export/GDP (%)

Bubble Size: GDP = USD 2,000bn

Developed MarketsDeveloping MarketsEmerging MarketsChina

Hong Kong SAR

Germany

USA

UK

Brazil

FranceRussia

Italy

Canada

Spain

TurkeySaudi Arabia

MexicoSwitzerland

Poland Ireland

Netherlands

Czechia

UAE

19

China Mexico Vietnam India Poland Malaysia Thailand Brazil Czechia Turkey

2,590 418 283 275 254 234 234 209 192 170

5.1 3.4 14.6 2.3 4.9 1.6 1.6 -0.2 3.8 4.1

30.8 20.4 40.4 10.3 10.1 51.8 23.6 13.3 20.8 3

1 Telephones Cars Telephones Refined Petroleum Vehicle Parts Integrated Circuits Computers Soybeans Cars Cars

2 Computers Computers Integrated Circuits Packaged Medicaments Computers Refined Petroleum Cars Iron Ore Computers Vehicle Parts

3 Integrated Circuits Vehicle Parts Textiles Diamonds Seats Semiconductor Devices Vehicle Parts Crude Petroleum Vehicle Parts Vehicles for the

Transport of Goods

4 Textiles Vehicles for the Transport of Goods Leather Footwear Jewellery Furniture Palm Oil Gold Sugar Telephones Refined Petroleum

5 Light Fixtures Crude Petroleum Oil Furniture Cars Electric

AccumulatorsCrude Petroleum Oil Integrated Circuits Frozen Bovine

Carcasses Insulated Wires Jewellery

6 Semiconductor Device

Monitors & Projectors Insulated Wires Vehicle Parts Cars Computers Vehicles for the

Transport of Goods Soybean Meal Toys Gold

7 Toys Telephones Computers Telephones Cigars Blank Audio Media Refined Petroleum CornElectrical Protection Equipment

Raw Iron Bars

8 Vehicle Parts Insulated Wires Knit Sweaters Aluminium Vehicles for the Transport of Goods Rubber Apparel Pneumatic Tyres Sulfate Chemical

Wood Pulp Seats Non-Knit Women’s Suits

9 Monitors & Projectors

Medical Instruments

Semiconductor Devices Crustaceans Insulated Wires Telephones Air Conditioners Poultry Meat Packaged

Medicaments Knit T-shirts

10 Machine Parts Tractors Industrial Printers Iron Ore Iron/Steel Structures Oscilloscopes Rice Refined Petroleum Monitors &

Projectors Carpets

Note: 1. As defined by the World Bank. 2. Top 10 Products 2019 data used for Vietnam, Malaysia and ThailandSource: UN Comtrade; World Bank; Axis Group Analysis

Dynamic emerging markets are among the top 30 global exporters, with high-technology exports entrenched in their portfolios

Total Exports (USD bn, 2020)

Top 10 Export Products2

Global Export Rank (2020) 1 10 20 21 22 25 26 27 30

Product Category Key

High-technology Manufactured

Vehicles, Parts & Machines

Other Manufactured

Agriculture

Minerals & Resources

CAGR (%, 2010-2020)

24

High-technology Exports1 (% of Manufactured, 2019)

20

Agenda

Trade & Supply Chain Shifts• Change of the order• China leads• Strong high-cost incumbents• New challengers; Many losers

Competitive Dynamics



Integration


21

Simplified Framework of Assessment: Drivers of China’s Manufacturing Competitiveness

Note: It is important to recognize it is not just about absolute position of i.e. China but we rather need to assess relative global competitiveness of all potential supply marketsSource: Axis Group Analysis

Various drivers support or undermine China & other global supply markets’ competitiveness. Underlying these drivers are a myriad of factors to understand

Geopolitics & Geostrategy

China’sManufacturing

Competitiveness

Inputs Integrated Supply Base

Macro DriversEmerging

Alternatives

Rising Wages

Low Total Input Cost

Increased Productivity

Manufacturing Clusters

Strong Infrastructure

Policy Support

OvercapacityStronger RMB (1 year)

Aging Population

Emerging LCCs / BCCs

Reshoring, Nearshoring &

Onshoring

XX

Category Clusters that Win or Lose?

Supporting Factors XX Undermining Factors

Key Advantages Persist or Not?

Weaker RMB (2014-2020)

22

61

294 307

199

39

118

17

283

23

160

51 78 62106

39

9411

1618

21

11

11

7

15

9

10

7

1513

5

11

919

23

47

39

31

18

23

27

16

29

19

2323

21

14

169

10

16

29

10

3

3

26

6

16

10

1016

6

10

3

0

100

200

300

400

China USA Germany Japan Mexico Russia India Australia Vietnam Poland Malaysia Thailand Brazil Turkey Indonesia SouthAfrica

Direct Labour Costs Warehouse Space Electricity Natural Gas

*Note: To facilitate a cost input comparison across economies, China’s total cost (i.e.. sum of labour, warehouse space, electricity and natural gas) is assigned a value of 100 within the index, and the costs in other economies are scaled accordingly

Source: Various; BCG, Axis Group Analysis

China remains very competitive relative to developed economies but other developing countries present lower cost alternatives in global context

Consists of total salaries of Blue-collar workers = 100; Engineers =

10; Operations Managers = 5

China’s total input cost (labour, warehouse space, electricity and natural gas) in 2020 is assigned a value of 100

Area = 6000 sq. m

1022 kWh per sq. m annually

1690 kWh per sq. m annually

Mexico’s labourcost is now 20% lower than China’s

India and Vietnam have some of the lowest manufacturing input

costs in the world

Input Cost Comparison* Across Selected Major Global Manufacturers (2020)

23

Product Manufacturing Complexity Spectrum – High Tech, High Capital Complexity (E.g. – Robotics)

Source: Axis Group Analysis

For high-tech products, China has largely caught up with developed markets; few developing countries compete

Low High

Reflects the expected relative competitiveness of manufacturing the product during the time period

China Significant growth in capabilities expected in

the LTLimited but growing capabilities

Maintain position in high tech manufacturingGlobal leaders in high tech manufacturing

Emerging player in high techLimited capabilities

Limited potential upsideLimited/no capabilities

Very limited capabilities Potential to emerge as high-tech hubs

Limited potential upside

Low High Low HighLong-termMedium-termShort-term

Limited/no capabilities

India

Others (Mexico, Turkey,

Poland)

Other Asian Economies (Indonesia/Vietnam/

Bangladesh)

Africa

US/Germany/Japan


For medium-tech products, China, India and several developing countries are becoming manufacturing powerhouses; expect significant shift

Product Manufacturing Complexity Spectrum – Med. Tech, Med. Capital Complexity (E.g. – Machinery)

Low High


Emerges as a global manufacturing powerhouse

Significant machinery manufacturing capabilities

Still attractive but decline in tech. advantageHigh attractiveness due to technology

Major machinery manufacturer in the LTKey emerging machinery manufacturer

Key emerging machinery manufacturersLimited scope in the ST

Emerging machinery manufacturers Significant machinery manufacturers in the LT

Attractive for selective machinery categories


Very limited scope in the ST

China

India


Poland)


Bangladesh)

Africa

US/Germany/Japan


For low-tech products, developing and emerging economies are challenging previous leaders; significant shift underway

Product Manufacturing Complexity Spectrum – Low Tech, Low Capital Complexity (E.g. – Textiles)

Low High


Phasing out of low-value add Declining attractiveness but remain strong

High costs to persistLimited scope due to high costs

Gain in the MT but decline in the LTKey emerging low-cost destination

Global leaders in low-value manufacturing Key emerging low-cost destination

Declining attractiveness but remain strong Phasing out of low-value add

Key low-cost destination


Emerging low cost destination

China

India


Poland)


Bangladesh)

Africa

US/Germany/Japan


Other Asian LCCs such as ASEAN and India have emerged as tangible alternatives to China for some categories and products; new clusters are forming

China• Increasing R&D spending• Growing focus on investment to

consumption and manufacturing to services

• Supply of primary materials• Integrated supplier base• Strong physical infrastructure

• Rising labour costs: Increased costs of doing business

• Slowing economic growth• Industrial overcapacity• Regulatory inefficiencies• Complex reform agenda

India• Rich talent pool, lower cost unskilled labour• Rapid economic growth• Increasing infrastructure focus• Govt. support• Atmanirbhar Bharat – Self Reliant India• Sweeping reforms such as GST, DBT, etc showing

visible result in ease of doing business ranking (63rd)• Accelerated technology adaptation due to Covid 19• English language skill

• Demographic diversities – languages, culture ..• Poor infrastructure• Issues with bureaucracy and red tape• Need for labour reform, legal reform• Trade deficit• Very few Free Trade Agreements

Asia Facts 2050• 50% of world GDP• 54% of world population• GDP predominantly driven by services

sector• China is the world’s largest economy

ASEAN• Low manufacturing cost• Location (close to both India and

China)• Launch of AEC• Demographic dividend

• National vs. regional interests• Lack of supply chain integration• Regulatory/governance issues• Lack of infrastructure

Major manufacturers of certain product categories

Emerging player in global high-tech manufacturing

Losing competitive edge in low-end manufacturing

Governance and infrastructure need to be upgraded

The Indian govt. launched the ‘Make in India’ initiative in 2014 to develop India as a manufacturing hub by developing local manufacturing and attracting further FDI and technological investment. Start-up India, Digital India and Skilled India further underpin prospects

Poised to become a global manufacturing powerhouse

Fundamental economic issues still curtail growth


Offshoring, reshoring, nearshoring and onshoring are complex choices. China vs India (or i.e. Vietnam) or US/Mexico make interesting case studies

Onshoring (USA)

• Low labour cost• Access to other markets in the

Americas through FTAs• Low energy costs

• Largely unskilled workforce• Relative lack of supply chain

integration• Lack of supplier base

3) Nearshoring:• Factors such as more favourable logistics and

reduced supply chain complexity are driving US manufacturers across all industries to seek out alternative LCCs such as Mexico

4) Onshoring:• The American ‘Manufacturing Renaissance’ has been a

critical driver of the reshoring trend• As the labour cost gap has closed, quality considerations

have become more important• Reduction in global supply chain complexity and the need

for ‘speed to market’ favouring the local market• Relocation costs do remain a critical issue

• Regained competitiveness in recent years

• Sustained technological advantage/focus

• Strong innovation focus• High productivity• Strong policy support

• High labour costs• Smaller range of manufacturing

capabilities (buyers for high-end goods only)

• High corporate tax rates• Growing FDI in overseas R&D

Nearshoring (to Mexico)

• Unskilled labour• Poor Infrastructure• Red-tapism

Reshoring (India)• Low labour cost• Strong government support

towards foreign investment• Improved ease of doing

business

• Increasing R&D spending• Low cost of manufacturing• Supply of primary goods • High domestic consumption

• Increasing cost of labour• Slowing economic growth

Offshoring (China)

2) Reshoring:• Lower cost of production, labour and a rising cost of

labour in China, make India the next destination for American businesses to shift their bases to

• A strong push from the Government towards foreign businesses to manufacture in India as well as efforts to upskill the labour force are other factors making India an important business destination

1) Offshoring:• China has world-class ports and a continuously improving

infrastructure• High production capacity, highly trained labour force and better

opportunities to diversify and expand make it a favourable manufacturing destination

28

Best practice leaders across industries incorporate EMs, such as China, India, the rest of Asia, Eastern Europe, and potentially Latin America

Retail• China, Bangladesh, India,

Pakistan, Cambodia, Myanmar, Vietnam, Turkey, Morocco and Romania

• Mainly sourcing from China and SE Asia

• New markets matter

Upshot• China still the main sourcing destination, several companies have

procurement offices in China, most often in Shanghai• Companies are adopting a portfolio approach complementing their existing

Chinese supplier base • China transitioning into a high-tech sourcing destination with increased

quality and supplier capabilities as well as high local demand but increased cost

• New markets matter – but not everyone can open multiple global sourcinghubs

• Local and regional proc. increasingly important; creates tension with EMspend objectives

Petrochemical

EPC/M

• China is the main sourcing destination

• Other important destinations include India, Mexico, Russia, Vietnam and South Korea


• China is the main sourcing destination

• Other important destinations include India, Russia, Vietnam, Thailand, Philippines, South Korea and Mexico

• WP sources from at least 32 countries: China, Europe, Mexico, Canada, India, Israel and Indonesia


Cement, Auto, Pharma, Manufacturing• China is the main sourcing

destination• Other major sourcing

destinations include India and South Korea among others


Mining• China is the main sourcing

destination• Other important destinations

include India and Southeast Asia


Rank & Location

1. China

2. Thailand

3. India

4. Other Asia

5. Eastern Europe

6. Latin America

Rank & Location

1. China

2. India

3. Thailand

4. Other Asia

Rank & Location

1. China (Pharma: India #1)

2. India (Pharma: China #2)

3. Thailand & Vietnam

4. Other Asia

5. Eastern Europe

6. Latin America

Rank & Location

1. China

2. India

3. Vietnam

4. Other Asia

5. Eastern Europe

6. Latin America

Rank & Location

1. China

2. India

3. Thailand

4. Other Asia

5. Eastern Europe

6. Latin America

Note: Selected industries consist of Cement, Auto, Pharma, Manufacturing, Retail & ApparelSource: Various; Axis Group Analysis

29

EU-27

Japan

China

US

India

Canada & Mexico

Central & South America

Asia-Pacific

Africa-Middle East

Developed countries are net exporters of mining equipment but developing countries are decreasing their deficit

-15 -10 -5 0 5 10 15 20

2011

2012

2013

2014

2015

2016

2017

Net Exports of Mining Equipment by Select Regions and Countries (USD bn, 2011-2017)

Source: European Commission; Axis Group Analysis

30

0 20 40 60 80 100 120Telephone

Data processing machinesIntegrated circuits

Other cloth articlesLight fixtures

Semiconductor DevicesModels and stuffed animals

Vehicle partsMonitors and projectors

Office machine partsFurniture

Electrical TransformersSeats

Other plastic productsRefined petroleum

UnspecifiedElectric heatersInsulated Wire

Liquid crystal devicesTrunks and casesElectric batteries

Microphones and headphonesAir pumps

Non-Knit women's suitsOther electrical machinery

Elec. Protection Equip.Rubber footwearAir conditioners

Knit sweatersValves

Sports equipmentPassenger and cargo ships

Circuits; printedBroadcasting accessories

Garments not knittedIndustrial printers

Pneumatic tyresStructures of iron or steel

Synthetic filament yarnRefrigerators

Video and card gamesMotor-working tools

Plastic ClosuresKnit women's suits

Flat-rolled IronPlastic housewareMetal mountings

Electric motorsCentrifugesComputers

FuelsTransportationAgriculture & ForestryChemicals & PlasticsMetals & MineralsTextiles, Hides & SkinsOthersMachinery & ElectronicsPercentage of total exports

0

500

1 000

1 500

2 000

2 500

4 6 8 10Articles of iron or steel

Textile footwearDomestic appliances

CarsIron houseware

Heterocyclic compoundsMattresses

Electrical control boardsElectric filament

Medical instrumentsPumps

Bathroom ceramicsMotorcycles

Machinery having individual functionsEntertainment articles

JewelleryOther knitted fabricsNon-Knit men's suits

Machinery partsHouse linens

Insecticides (retail)Raw plastic sheeting

VehiclesLeather footwear

ContainersMassage appliances

Floor coverings of plasticsTransmissionsIron fasteners

Vacuum cleanersKnit t-shirts

Electrical capacitorsWoven fabrics of cotton

KitchenwareAlloy steel flat-rolled products

Aluminium plates, sheets and stripPaper-based containers

CoatsOther heating machinery

Knit women's undergarmentsOther measuring instruments

Engine partsPolyacetals

Knit socks and hosieryNon-woven textiles

Rubberworking machineryLight-vessels

Building stoneElectric motor parts

Brooms

123456789

1011121314151617181920212223242526272829303132333435363738394041424344454647484950

51525354555657585960616263646566676869707172737475767778798081828384858687888990919293949596979899

100

Source: UN Comtrade; Axis Group Analysis

China’s exports are dominated by machinery & electronics products, which constituted 44% of its total exports in 2020

223170

X%

USD bn

44

12

1

10

14

1044

China’s top 100 global exports (USD bn, 2020)

Export Profile

China’s total export value for 2020:USD 2,591bn

Top 100 Shown:USD 1,815bn;

70% of total exports

Top 50 Shown: USD 1,458bn; 56%

of total exports

X%

31

Towards a ‘Risk vs Cost Scenario’…


How to measure Risk & Cost NOW? How about in the FUTURE?

0

0,2

0,4

0,6

0,8

1

1,2

1,4

1,6

1,8

2

0 0,2 0,4 0,6 0,8 1 1,2 1,4 1,6 1,8 2

Risk

Cos

t

China India

2019

2021 ‘Prediction is very difficult, especially if it is about the future’

- Niels Bohr

2030a2030b

Poland Vietnam Mexico

2010

2010

2010

2030

?

?

??

2010

2030

2010

2030

20302030

2010

2021

2019 2021

2019

2021

20192021

2019

32

Rank

1990 1995 2000 2005 2010 2015 2020

Country USD bn Country USD bn Country USD bn Country USD bn Country USD bn Country USD bn Country Rank USD bn2020 Aus

Import Share %

2010‐20 CAGR %

1 USA 9 USA 12 USA 14 USA 17 China 38 China 46 China 1 61.1 28.8 4.92 Japan 7.2 Japan 8.7 Japan 9.4 China 17 USA 23 USA 22 USA 2 25.1 11.9 1.13 UK 2.7 Germany 3.7 China 5.6 Japan 14 Japan 18 Japan 15 Japan 3 12.7 6 ‐3.14 Germany 2.5 UK 3.4 UK 4.2 Germany 6.9 Thailand 10 South Korea 11 Thailand 4 10.2 4.8 ‐0.35 New Zealand 1.7 China 2.8 Germany 3.6 Singapore 6.9 Singapore 10 Thailand 10 Germany 5 9.8 4.6 ‐0.26 Taiwan, China 1.4 New Zealand 2.6 South Korea 2.9 UK 4.9 Germany 10 Germany 9.2 Malaysia 6 6.9 3.3 ‐2.17 Italy 1.2 Taiwan, China 1.9 New Zealand 2.7 Malaysia 4.8 Malaysia 8.5 Malaysia 7.3 South Korea 7 6.5 3.1 ‐0.58 China 0.89 Singapore 1.8 Malaysia 2.6 New Zealand 4.3 South Korea 6.9 Singapore 6.9 Singapore 8 5.7 2.7 ‐5.69 France 0.87 South Korea 1.6 Singapore 2.2 South Korea 4.2 New Zealand 6.9 New Zealand 5.7 UK 9 5 2.4 ‐0.910 South Korea 0.87 Italy 1.6 Taiwan, China 2.1 France 3.9 UK 5.5 UK 5.4 New Zealand 10 5 2.4 ‐3.111 Singapore 0.75 France 1.4 Italy 1.9 Thailand 3.9 Indonesia 5 Italy 4.3 Italy 11 4.9 2.3 0.412 Canada 0.65 Sweden 1.1 Thailand 1.7 Italy 3.5 Italy 4.7 Indonesia 4.2 Vietnam 12 4.5 2.1 4.213 Sweden 0.61 Malaysia 1.1 Indonesia 1.7 Indonesia 2.9 France 3.6 India 3.6 France 13 4.2 2 1.414 HK SAR 0.5 Canada 1.1 France 1.4 Taiwan, China 2.9 Taiwan, China 3.5 Taiwan, China 3.6 India 14 3.9 1.8 7.415 Malaysia 0.49 Indonesia 1 Vietnam 1.3 Vietnam 2.7 Vietnam 2.9 Vietnam 3.4 Taiwan, China 15 3.6 1.7 0.116 Saudi Arabia 0.49 PNG 0.86 Canada 1.2 Sweden 1.6 PNG 2.8 France 3.3 Indonesia 16 3.4 1.6 ‐417 Switzerland 0.49 Switzerland 0.75 Sweden 0.98 PNG 1.5 Ireland 2.2 Switzerland 2.4 Switzerland 17 2.4 1.2 1.718 Netherlands 0.43 HK SAR 0.75 Saudi Arabia 0.94 Canada 1.5 UAE 2.1 PNG 2.2 PNG 18 2.4 1.1 ‐1.519 Indonesia 0.39 Thailand 0.72 PNG 0.85 Ireland 1.5 Sweden 2 UAE 1.9 Mexico 19 2.1 1 4.520 UAE 0.37 Saudi Arabia 0.58 HK SAR 0.78 South Africa 1.2 Switzerland 2 Mexico 1.8 Netherlands 20 2 0.9 4.621 Thailand 0.36 Belgium 0.56 Switzerland 0.75 Switzerland 1.2 India 2 Canada 1.7 Canada 21 1.8 0.8 0.222 Belgium 0.34 Finland 0.55 Ireland 0.6 Saudi Arabia 1.1 Canada 1.7 Netherlands 1.6 Spain 22 1.5 0.7 ‐0.523 PNG 0.29 Netherlands 0.5 UAE 0.59 Belgium 1.1 Spain 1.6 Ireland 1.6 UAE 23 1.5 0.7 ‐3.524 Finland 0.23 UAE 0.41 Netherlands 0.59 HK SAR 1.1 Belgium 1.5 Spain 1.5 Ireland 24 1.4 0.7 ‐4.225 Brazil 0.23 India 0.41 South Africa 0.53 Spain 1 Mexico 1.4 Sweden 1.5 Belgium 25 1.4 0.6 ‐0.926 India 0.22 Spain 0.37 Belgium 0.48 Netherlands 1 Netherlands 1.3 Belgium 1.2 Sweden 26 1.3 0.6 ‐4.427 Denmark 0.19 Brazil 0.35 Finland 0.48 India 1 HK SAR 1.1 HK SAR 0.9 Austria 27 1.2 0.5 2.828 Austria 0.16 Ireland 0.35 India 0.45 Austria 0.78 South Africa 1.1 South Africa 0.89 Poland 28 1.1 0.5 13.129 Spain 0.16 Denmark 0.25 Spain 0.41 Denmark 0.75 Brunei 1 Denmark 0.85 Finland 29 1 0.5 3.530 Ireland 0.13 Austria 0.22 Brazil 0.4 Finland 0.69 Denmark 1 Austria 0.84 Brunei 30 1 0.5 ‐0.1

Top 30 194.6 91.8 0.48Other Countries 17.4 8.2 0.68Global Total 212 100 0.5

Australia’s import composition reflects the dynamics between traditional export leaders and new challengersAustralia’s top 30 import partners (1990-2020); 2010-20 CAGR (%)

Countries that rank highest in 20202020 rank higher (or same) as in 1990 but not peakCountries with lower rank in 2020 than in 1990

3 – 4.5%Above 4.5%

0 – 2.9%Below 0%

CAGR %Top 30 entry (after 1990) Last record in top 30Peak rank

Asia & APACLatamEastern EuropeHigh Income

Key

Source: UN Comtrade; World Bank; Axis Group Analysis

Highlights: 6 of Australia’s top 10 import partners are in Asia, namely China, Japan, Thailand, Malaysia, South Korea & Singapore. Vietnam, Mexico & Poland have also increased their share of Australia’s imports

33

Composition of Australia’s Total Imports by Sector (USD bn, 2020)

Australia’s top sector for imports in 2020 was in Machinery & Electronics, with China being its top import partner in this category

0 50 100 150 200 250

0 10 20 30 40 50 60 70 80 90 100

China

USA

Japan

Thailand

Germany

Malaysia

South Korea

Singapore

UK

New Zealand

Machinery and Electronics Metals and Minerals Fuels Chemicals and PlasticsAgriculture and Forestry Transportation Textiles, Hides and Skins Others

OthersTextiles, Hides and SkinsTransportationAgriculture and ForestryChemicals and PlasticsFuelsMetals and MineralsMachinery and Electronics

USD bn

Sectorial Composition of Australia’s Total Imports from Top 10 Countries of Origin (%, 2020)


61.1

25.1

12.7

10.2

9.8

6.9

6.5

5.7

5.0

5.0

34

Australia’s top 100 global imports (USD bn, 2020)


Australia’s manufacturing imports i.e. machinery & electronics, transportation, textiles & chemicals will see further dynamic changes in ‘source countries’

0 3 6 9

Motor vehiclesRefined petroleum

Telephone setsData processing machines

GoldVehicles for transport of goods

Packaged medicamentsCrude petroleum oil

UnspecifiedHuman or animal blood

Medical instrumentsPneumatic tyres

Vehicle partsFurniture

Monitors and projectorsOther cloth articles

Planes/Helicopters/SpacecraftsEarthmoving machines

Machinery partsFood preparations

SeatsOrthopaedic appliancesTaps, cocks and valvesElectrical Transformers

CentrifugesSemiconductor DevicesOther plastic products

Models and stuffed animalsRefrigerators

Insulated WireInsecticides (retail)

Trunks and casesAir conditioners

Microphones and headphonesPlastic ClosuresElectric heaters

Non-Knit women's suitsGas turbines

Structures of iron or steelIndiv. Function machinery

Light fixturesTractors

JewelleryPumps

FertilizersElectric motors

Beauty productsAir pumps

Electric batteriesTransmission shafts

1312

0

50

100

150

200

250

0,0 0,2 0,4 0,6 0,8 1,0

Baked goodsSports equipment

Broadcasting accessoriesHarvesting machinery

Articles of iron or steelIndustrial printersLifting machinery

Motor-working toolsGarments not knitted or crocheted

Elec. Protection Equip.Aircraft parts

SilverVideo and card games

Leather footwearMachinery for processing minerals

Knit t-shirtsKnit sweaters

Raw plastic sheetingOther heating machinery

WineEthyl alcohol (volume less than 80%)

Electrical control boardsChemical analysis instruments

Trailers and semi-trailersHouse linens

Laboratory reagentsMixed mineral or chemical fertilisers

Petroleum cokeMetal mountings

Iron fastenersMattresses

Other enginesFork-lifts

Non-Knit men's suitsCheese and curd

Preparations for animal feedingOffice machine parts

Liquid dispensing machinesPlastic housewareBlank audio media

Respiration apparatusSwine meat

Textile footwearWashing and bottling machines

CoffeeHormones

CigarsAluminium plates, sheets and strip

MotorcyclesOther electrical machinery

123456789

1011121314151617181920212223242526272829303132333435363738394041424344454647484950

51525354555657585960616263646566676869707172737475767778798081828384858687888990919293949596979899

100

Australia’s total import value for 2020: USD 212bn

Top 100 Shown:USD 151bn; 71% of total imports

Textiles, Hides & SkinsMetals & MineralsAgriculture & ForestryOthersChemicals & PlasticsFuelsTransportationMachinery & ElectronicsPercentage of total imports

USD bn

27

14

8

14

11

6

10

10

X%

Top 50 Shown:USD 121bn; 57% of total exports

35Source: Western Australia Government; Axis Group Analysis

Western Australia import profile reflect same characteristics – machinery from China in the lead

$0b

$10b

$20b

$30b

$40b

$50b

2000-01 2005-06 2010-11 2015-16 2020-21

Total Machinery & transport equipment Other(a)

$1.0b

$1.0b

$1.0b

$1.6b

$1.6b

$1.6b

$2.0b

$2.4b

$4.4b

$6.4b

$0b $2b $4b $6b $8b

Spain

Indonesia

Germany

Malaysia

United Kingdom

Singapore

Thailand

Japan

United States

China (Mainland)

2019-202020-21

• Western Australia accounted for 11% of Australia’s goods imports in 2020-21.• The value of Western Australia’s goods imports rose 1.4% to $34.4 billion in

2020-21, with: o Machinery and transport equipment imports rising 23.1% to $12.3 billion.o Other imports falling 7.6% to $22.1 billion, due to decreases in gold,

mineral fuels and chemicals imports.• Western Australia’s real goods imports rose 1.3% in the 2019-20 financial year.

The 2020-21 WA Government Pre-Election Financial Projections Statement forecasted Western Australia’s real goods imports would grow 0.25% in 2020 21 and 1.0% in 2021-22.

• In 2020-21, Western Australia’s largest market for goods imports was China ($6.4 billion or 19%), followed by the United States ($4.4 billion or 13%) and Japan ($2.4 billion or 7%).

• The largest increases in Western Australia’s goods imports in 2020-21 were from Spain (up $786 million or 452%, mainly due to higher imports of ships, boats and floating structures), United Kingdom (up $744 million or 88.3%, mainly due to higher silver, platinum and gold imports) and China (up $563 million or 9.6%, mainly due to higher gold imports).

• The largest decreases in Western Australia’s goods imports in 2020-21 were from Papua New Guinea (down $1.5 billion or 94.9%, mainly due to lower gold imports), Thailand (down $1.2 billion or 38.8%, mainly due to lower gold imports) and United States (down $482 million or 9.9%, mainly due to lower petroleum imports).

Western Australia’s Total Imports (AUD, 2000 – Aug 2021)

Western Australia’s Major Import Markets (AUD, Jul 2019 – Aug 2021)

36

Agenda

Competitive Dynamics• Measure Risk & Cost real-time• New options, complex choices• Opportunities & threats are

intertwined; also for Australia



Integration

Trade & Supply Chain Shifts• Change of the order• China leads• Strong high-cost incumbents• New challengers & losers


37

Classification of the total spend of typical Mining Companies

Spend Tree of Typical Mining Companies (High Level)

Total Spend

Direct Spend

Construction

Site, Mine and Facilities

Construction Services

Mining Ops

Mining Equipment

MRO

Consumables

Others

Materials Handling

Material Handling

Equipment

Others

Other Material

Processing

Processing Equipment

Consumables

Bulk Chemicals

Others

Other Material

Electrical Instrumentation

Electrical Equipment

Consumables

Others

Mining Commodities

Explosives

Explosives Accessories

Others

Direct Services

Mining Services

Indirect Spend

Facilities

Office Facilities

Utilities

Facilities Management

IT

IT Material

Logistics

Transport

Travel

Indirect Services

Professional Services

Financial Services

HR Services

CAPEX

OPEX

Services

38

Elements of expenditure profile potentially addressable via BCC sourcing (1)


Direct Spend (1/2)

Construction

Site, Mine and Facilities

Modular house

Capex

Steel structure

Capex

Pipe

Capex

Construction materials

Capex

Scissor Lift

Capex

Construction Services

EPCM

Services

Specialist professional

Services

Quantity Surveyor Services

Services

Mining Ops

Mining Equipment

HME

Electric rope shovel

Capex

Drilling machine

Capex

Bulldozer

Capex

Grader

Capex

Wheel loader

Capex

Dragline

Capex

Proximity detect. system

(PDS)Capex

Truck

Capex

UME

Underground drilling

Capex

Load haul dump (LHD)

Capex

Cable passenger carrier

Capex

Shuttle car

Capex

Underground roof support

Capex

Armored face conveyor (AFC)

Capex

Shearer

Capex

Road header

Capex

Blower

Capex

MRO

Engine

Opex

Motor

Opex

Lubricant pump

Opex

Trail cable

Opex

Cylinder

Opex

Undercarriage

Opex

Base plate (dragline)

Opex

Handrail

Opex

Cabin

Opex

Mechanical components

Opex

Bearing / Bushing /

WheelOpex

Piping

Opex

Mil liner

Opex

Consumables

GET

Opex

Liner

Opex

Truck cylinder

Opex

Filter element

Opex

Hose (air, oil)

Opex

Coal pick

Opex

Truck tray

Opex

Concrete sleeper

Opex

Roof bolt

Opex

Wire mesh

Opex

Jumbolter

Opex

Wire rope

Opex

OTR & general tyre

Opex

Drill bit

Opex

Steel rod

Opex

Others

Tyre management

Services

rental or leasing

Services

Equipment rental or leasing

Services

MRO services

Services

Technical support

Services

Climate control

Services

Materials Handling

Equipment

EquipmentSilo

Capex

Compressor / Turbine / Blowers

Capex

Stacker reclaimer

Capex

Feeder / Screens / Cyclone

Capex

Overhead crane

Capex

Mobile crane

Capex

Forklift

Capex

Loadout station

Capex

Wagon tippler

Capex

EquipmentBelt conveyor

Capex

Slurry pump

Capex

Bucket elevator

Capex

Hoist

Capex

Screw conveyor

Capex

Rolling stock -underground

Capex

Railway track

Capex

Rail

Capex

Others

Conveyor belt

Capex

Conveyor idler

Capex

Pulley

Capex

Pump parts

Opex

Fluid handling consumables

Opex

Maintenance services

Services

Conveyor installations

Services

Cost Saving Opportunity Identification

Low impact – Not a priority in global sourcing

Not appropriate for global sourcing

BCC sourcing opportunity

Spend was categorised into BCC sourcing opportunities, low impact or not appropriate for global sourcing

Capex Capex Capex

Capex Services

Capex Capex

Capex Opex Opex Services Capex Capex

Bulk Handling Infrastructure

Capex

Snatch block

Opex

Scissor Lift

Capex

39



Direct Spend (2/2)

Processing

Consumables

Grinding media -Forged

Grinding media -Casted

Opex

Grinding media - Rolled

Grinding media - Ceramic

Grinding rod

Smelting consumables

Graphite electrode

OpexOpex

Electro paste

Magnesium / Fesi

Oxygen lance

Additives

Opex

Aluminum powder

Refractory brick

Opex

PET coke

Opex

Anthracite

Collector bar

Bag filter

Opex

Lime

Opex

Bulk Chemicals

Glycine / Cyanide

Soda ash

Opex

Flocculants

Opex

Caustic soda

Opex

Flotation agent

Opex

Sodium hydro sulphate

Opex

Amberlite

Opex

Frothers

Opex

Sulfuric acid

Opex

Collector agent

Opex

Other chemicals

Opex

Others

Liners Steel / Non steel

Opex

Screen panel

Opex

Process water

Opex

Effluent treatment

Services

Sampling and testing

Services

Plant Technical & engineering

servicesServices

Material preparation

Services

Electrical Instrumentation

Electrical Equipment

Mine ventilation

Capex

Transformer H/L voltage

Capex

Switch gear

Capex

Diesel generator

Capex

Motor & gearbox

Capex

3D printer

Capex

Solar panel

Capex

Consumables and Others

Light bulbs

Opex

Electrical equip. parts

Opex

Electrical cable

Opex

Other control & instr. parts

Opex

Electrical, control instr.

Services

Mining Commodities

Explosives

ANFO

Opex

Packaged explosives

Opex

Bulk emulsion

Opex

Water / Dry gel explosives

Opex

Explosives Accessories

Electric / Non Elec. detonator

Opex

Electronic detonator

Opex

Seismic detonator

Opex

Initiating software

Opex

Shock tube

Opex

Booster

Opex

Others

Industrial gas

Opex

Lubricant

Opex

Fuel

Opex

Fuel management

Services

Explosives and blasting services

Services

Direct Services

Mining Services

Load and haul services

Services

Contractor equipment hire

Services

Discard management

Services

Drilling services

Services

Dust control

Services

Underground shaft and incline

development

Services

Miningcontracting

Services

Operational site services

Services

Staff

Services

Payroll

Services

Environmental services

Services

Opex

Opex

Opex

Opex

Opex

Opex

Opex

Opex

Opex

Opex Opex Opex

Opex

Opex

Opex





Capex Capex Capex Capex

Capex Opex Opex Capex Opex Opex Opex Opex Services

Opex

Crusher / Breaker

Capex

Screener

Capex

Grinding mill (SAG / Ball)

Capex

Thickener / Mixture

Capex

Flotation equipment

Capex

Filter press

Capex

Pipes, Valves & Fittings

Opex

Cyclone

Capex

Furnace

Capex

Slag pot / Ladle

Capex

Heat exchanger /

CoolerCapex

Pumps

Capex

Cooling tower

Capex

Coal washing machine

Capex

Processing Equipment

Capex

Pressure Vessels

Capex

Turbines & Compressors

Capex

Pipes, Valves & Fittings

Capex

Bearings

Opex

OpexOpex

Opex

Opex

Opex

Opex

Opex

Opex

Apron Feeder

Capex

40



Indirect Spend

Facilities

Facilities Management

Office supplies

Opex

Furniture

Opex

Climate control

Opex

Hand tools & workshop cons.

Opex

Security drones

Opex

Security

Services

Catering

Services

Cleaning services

Services

Courier services & parcels

Services

Building and real estate services

Services

PPE (personal protective

equip.)Services

Safety equipment

Services

Maintenance, repairs &

operations)Services

Integrated facilities mgmt.

Services

Storage

Services

Waste mgmt.(domestic)

Services

Waste mgmt.(industrial)

Services

Utilities

Gas

Opex

Electricity

Opex

Wastewater treatment

Opex

Water

Opex

Waste gas extraction

Opex

IT Material

IT hardware

Opex

IT software

Services

Specialty software

Service

Telecom

Services

IT services

Services

IT networks

Services

CCTV

Services

Logistics

Transport

Air transport

Services

Shipping

Services

Freight forwarding 3PL

Services

3rd Party warehousing

Services

Rail transport

Services

Road transport

Services

Inventory mgmt.

Services

Travel

Car hire

Services

Travel agency

Services

Passenger transport

Services

Aviation

Services

Air travel

Services

Hotels

Services

Services

Professional Services

Translation services

Services

Consulting

Services

Market intelligence -

SourcingServices

Marketing agency

Services

Memberships & subscriptions

Services

Audit / Tax

Services

Legal

Services

Public affairs service

Services

P2P

Services

Back officeoperations

Services

Quality mgmt. QA / QC

Services

Financial Services

Insurance & risk

Services

Banking services

Services

Credit cards

Services

HR Services

Employee benefits

Services

Medical services

Services

Training

Services

Recruitment

Services

Temporary & contract labour

Services





Capex Capex Capex

Services ServicesOpex Opex Services ServicesServicesServices

41

With improved production capability in BCCs, procurement decision drivers are becoming more multilayered with cost remaining an important element; but there are many complex considerations that stretch bandwidth in teams


Production Time

Short production time led by advanced technology in relevant industries

China,EE, SEA, Mexico

Transportation Time

Major shipping ports are more practical for export and offer faster services

China, India, Turkey, S.E.A.

Supplier Base

Large and diverse supplier base create competitivenessin the market and lower the price

China,India,S.E.A.

Raw Material Supply

An abundant supply of raw materials is conducive to BCC sourcing

China, India, S.E.A.

ExportRegulations

Favorable policies and incentives (Taxes, Free Trade Zone) facilitate BCC sourcing

China, S.E.A., India

After Sales Service

Improved after sales serviceencourages clients for more BCC sourcing

China, S.E.A., India

Technical Strength

The level of technical barriers existing in the industry influences the product quality


R&D Capability

Capability to upgrade the industry level and avoid I.P issues

China, Eastern Europe, India

Talent Pool

Sufficient HR support brings a big value to the product output

India, China

Labor Cost

Labor cost is still a fraction of advanced economies


Delivery /Manufacturing

Cost

The cost of manufacturing, including utility, domestic and international delivery

China, India, EE S.E.A.

ManagementCost

Project management including quality and progress

China,S.E.A.

TransportationInfrastructure

Developed infrastructure makes transportation more fluid and offers shorter lead time

China, EE, Mexico

Decision Drivers

Quality

OthersLead time

& Logistics

Cost

42

Agenda


Resources• Many potential choices• Not easy process

Clusters & Categories

Integration





43

Global Exports and CAGR of Select Axis Group Mining Product Categories (USD bn, 2020)


Axis Group selected 14 mining product categories for further interrogation. Global exports of these categories amounted to USD 540bn in 2020

0

20

40

60

80

100

120

140

160

Motors &Transformers

Pipes, Valves,Flanges,Fitting

Pumps SteelStructure

GrindingMedia,

Steel/CeramicBalls

ConveyorSystems,

Belt, Pulleys,Idlers, Gears

Bearings Drilling andBlasting

Equipment

Turbines &Compressors

Excavators HeatExchangers &

PressureVessels

Crushing,Grinding,

Pulverizing,Ball Mills

Refractories Screens &ScreeningMachinery

2.1%

-0.3%

1.7%

1.4% 3.7%

-0.5%2.7%

1.6% 0.3% 0.6% 5.1%

-4.4% -1.1% 0.1%

X.X% CAGR 2010-2020Motors & Transformers was the largest category

with global exports of USD 154bn in 2020

Heat Exchangers & Pressure Vessels had the highest CAGR

of 5.1% of all categories between 2010-2020

44

0,0 0,5 1,0

LithuaniaIsrael

CroatiaEstoniaBelarusGreeceLatvia

Bosnia HerzegovinaNew Zealand

ArgentinaColombia

EgyptNorth Macedonia

GuatemalaZambia

Rep. of MoldovaSri Lanka

KenyaJordan

UzbekistanNamibia

AzerbaijanEl Salvador

LebanonPakistan

CyprusSenegalGeorgia

BotswanaBoliviaIcelandGuyana

KyrgyzstanMauritius

UgandaArmenia

DRCUruguay

MontenegroZimbabweBarbadosGrenada

Belize


China leads, followed by high income economies (high cost) and trader economies. 6 developing countries are among the top 20 global exporters

0 10 20 30 40 50 60 70 80

ChinaGermany

USAJapanItaly

South KoreaFranceMexico

NetherlandsUK

Hong Kong SARCzechiaPolandSpain

AustriaIndia

Taiwan, ChinaThailand

SwitzerlandCanada

SingaporeBelgiumTurkey

HungaryDenmarkSwedenVietnamRomaniaSlovakiaFinland

MalaysiaPhilippines

BrazilIndonesiaSloveniaPortugalNorway

South AfricaUkraine

LuxembourgSerbia

AustraliaIreland

111.7123456789

10111213141516171819202122232425262728293031323334353637383940414243

44454647484950515253545556575859606162636465666768697071727374757677787980818283848586

Developing CountryDeveloped CountryTrader

Global Exporters of Axis Group Selected Categories (USD bn, 2020)

Others

45

111,7

72,4

41,5

34,628,1

17,215,4

14,9

14,711,9

11,8

11,3

11,0

9,8

9,2

9,1

8,0

7,6

7,6

7,2

0

1

2

3

4

5

6

7

0 5 10 15 20 25

Developing Country


While China has the highest country share for our selected products, Poland is growing fast with a CAGR of 6.4% between 2010 and 2020

154,3

83,5

60,244,7

43,9

35,8

27,5

20,3

19,919,2

18,5

6,8

3,4

1,9

-6

-4

-2

0

2

4

6

8

0 5 10 15 20 25 30 35

X.x USD bnHeat Exchangers, Pressure Vessels

Screens & Screening Machinery

Pipes, Valves, Flanges & Fittings

Crushing, Grinding, Pulverizing, Ball Mills

Motors & Transformers

Pumps

Turbines & Compressors

Excavators

Bearings

Refractories

Drilling & Blasting

Equipment

Steel Structures

Conveyor Systems, Belts, Pulleys, Idlers,

Gears

Grinding Media, Steel/Ceramic Balls

Export CAGR for the period 2010-2020 (%)

Product Share of Category Global Total (%)

Selected Axis Group Categories’ Exports (2020)

Category Share of Country’s Total Global Exports (%)

Country Share of Category Global Total (%)

Top 20 Exporters of Selected Axis Group Categories (2020)

China, 5.1%

Germany

USA

Japan

Poland, 6.4%

Czechia, 3.7%

Canada

Mexico, 3.5%

South KoreaFrance

UK

Spain

Netherlands

Italy

Austria

Taiwan, China

Switzerland

Hong Kong SAR

Thailand, 1.7%

India, 2.6%

CAGR 2010-2020

These 14 categories total USD 540bn of

exports in 2020

Developed Country

Trader

USD bnX.x

46Source: UN Comtrade; Axis Group Analysis

China’s exports of Axis-selected mining products grew at a faster rate between 2001 and 2010 when compared to growth between 2010 and 2020

16

8

18

1618

16

10

2221

11

14

11

23

17

0

5

10

15

20

25

0 5 10 15 20 25 30 35 40

China’s Global Exports of Selected Axis Group Categories (2020)

Export CAGR for the period 2001-2020 (%)

Heat Exchangers, Pressure Vessel

Screens & Screening Machinery

Pipes, Valves, Flanges, Fitting

Crushing, Grinding, Pulverizing, Ball Mills

Motors & Transformers

Pumps

Turbines & CompressorsExcavators

BearingsRefractories

Drilling & Blasting Equipment

Steel Structures

Conveyor Systems, Belt, Pulleys, Idlers, Gears

Grinding Media, Steel/Ceramic Balls

Global Market Share (%)

A bubble of this size represents total export value of USD 1 bn


Even as we open the list up, China stands out with the largest number of mining procurement supply packages in the region

JapanPrimary Secondary• Transformers• Switchgear• Stackers and

reclaimers• Steel pipes• Variable speed drives

• Grinding mills and crushers• Conveyors• Flotation cells and magnetic

separators

South KoreaPrimary Secondary• Transformers• Switchgear• Steel pipes

• Conveyors• Stackers and reclaimers• Structural steel and plate work• Variable speed drives

MalaysiaPrimary Secondary

• Switchgear• Conveyors

IndonesiaPrimary Secondary

• Transformers• Switchgear• Structural steel and

plate work

ChinaPrimary* Secondary• Transformers• Switchgear• Grinding mills and crushers• Conveyors• Structural steel and plate work• Pre-fabricated housing• Steel pipes• Flotation cells and magnetic

separators• Variable speed drives• Grinding media

• Stackers and reclaimers

IndiaPrimary Secondary• Grinding media • Switchgear

• Steel pipes• Flotation cells and

magnetic separators• Variable speed drives

ThailandPrimary Secondary• Structural steel and

plate work• Grinding media

• Transformers• Pre-fabricated housing

Selected Categories – General

48

What about capex project procurement - for project owners’ teams, PMC’s and EPC/M’s?


Operation & Maintenance

Design & Engineering

Construction

ProcurementCos

t In

fluen

ce

Time (Project Lifecycle)

EPC Model for Projects: Do Procurement Early for Strategic Suppliers

100%

0%

Planning & Feasibility

Construction Cost

Ability to influence 100%

0%

Startup

Tendering or Sourcing

Contract Award

Contract Management

StrategicProcurement

Planning

What about Projects?

ProcurementRequirement

Definition

BidEvaluation &

Selection


AreasProject Identification Prefeasibility Studies Detailed Design Mine Operations

Resource Estimation Feasibility Studies Project Management Operations Optimisation / Enhancements

Mine Planning FEED Construction Management Tailings Management

Metallurgical Studies /Mineral Economics

Permits & Other LegalCompliance Arrangements

Building Material Procurement Reclamation Engineering

Bid Proposal Financing: LT & ST Machinery Procurement Decommissioning

Risk Assessment & Corporate Governance Construction

Water Management Work Force Employment & Deployment

Geotechnical Commissioning

Tailings and Waste Rock Studies

Project Sourcing & Consulting1 Feasibility Engineering &

Construction Preparation2

Project Construction3 Operations, Asset Management,

Decommissioning, Reclamation4

Low HighCapabilities: Enhanced capability as a result of foreign cooperation

Blue highlights represent China’s “core” capabilities

Orange highlights represent potential areas for Chinese participation if working alongside a foreign company

Grey highlights represent China’s “non-core” capabilities where opportunities exist but require further evaluation

Assessment of China’s Capabilities Across the Mining Value Chain for Overseas Projects

In addition to China’s core capabilities across the mining value chain, China’s non-core capabilities can also be leveraged with the help of non-Chinese partners with relevant expertise

50

Agenda

Clusters & Categories• China will still lead• Explore alternatives• Opex, Capex and Services• Much internal resistance

Integration








History and recent past should be instructive to organisational thought processes

Black Swans exist

Basics exactly right

Interconnectedness

Key Lessons… …Must Shape New Thinking

Holistic view

Rethink habits

Think Global

VisibilityMitigation cost

Org Culture“Human

ingenuity as antidote”

Dictum: Pre-empt & anticipate


Conversations in boardrooms on Global Procurement & Supply must adapt

Technology & People Global Partners

Technology & people to compete• Magic combination• Digital solutions for agility &

resilience in global SC• Innovation

Partnerships for global reach• Strategic and capable on-the-

ground partners• Calibrate 3PL, 4PL models…• Outsourcing vs in-house

Supply Portfolio

Supply-base portfolio• Single source?• Over-exposure?• New markets that matter?

Information & Strategic Intelligence

Information quality & speed• Risk radar• Process, decide, communicate• Internal & external

Top Table

Elevate Global Procurement & Supply to the top table

• Executive-level attention• Risk matrix• Mitigation strategies & BCP

53

Upshot

Cost & RiskGlobal

Clusters & Categories

Ignorance vs Strategic

Intelligence

Challenge Choice Enable

54

Key practical considerations and actions

Every procurement professional can help minimise any potential adverse global supply chain disruptions by…

Supplier Engagement• Re-evaluate contract structures• Communicate limitations and expectations• Assess current supplier health and

capabilities

Inventory Management

• Increasing / decreasing inventory for specific categories

• Relooking at what are essential vs. non-essential goods

• Review stockpiling quantities

Logistics Partnership• Treat logistics providers as strategic

partners• Re-assess the trade-off between lead-time

vs. transport cost• Integrate supply chain control tower

Supply Chain Visibility• Remain aware of evolving supplier risks• Understanding of primary supplier

operations essential (sub contractors, logistics service providers etc.)

Operational Requirements

• Know what supplies are critical to the operations

• Understand current performance challenges

• Establish future requirements and potential risk concerns

Sustainability• Investigate regulations that protect natural

resources• Understand long-term impact on different industries• Need for CSR audits to ensure ethical production• Inclusive of local businesses

Practical Activities


Get ‘Right things Right’ for Global Procurement & Supply success; find YOUR focus

Supplier Process

Management

Supplier Analysis

Global Supply Market Assessment

Multi-Country/ Cluster Focus

Select Country/ Cluster

Selection

Phase 1: Country Analysis Phase 2: Procurement Methodology

Supplier Engagement

Prac

tical

Poi

nter

s

Analytics Complexity Negotiation Contract M Quality M

Strategy Partner Supplier RMSupplier

PerformanceM

People Portfolio TCOInternational

Freight MSupplier

DevelopmentM

Analytics Complexity Negotiation Contract Management

Quality Management

Strategy PartnerSupplier

RelationshipManagement

SupplierPerformanceManagement

People PortfolioTotal Cost

Of Ownership

LogisticsManagement

SupplierDevelopmentManagement

56

A number of internal constraints across strategic, operational, organisationaland informational spheres need to be acknowledged

Strategic

Operational Organisational

Informational

Spheres of Influence

Strategic• A lack of top or senior management

support causes a range of problems across the organization, including a discrepancy between the group strategy and procurement strategy

• Top management to focus everyone’s direction on all spheres of influence

Operational• Large number of different and

fragmented specifications and lack of technical clarification to BCC suppliers

• Weak coordination between procurement team and mine site end users

• Difficulty in finding the right BEE/BCC sourcing mix

Organisational• Buy-in is not happening across the

organisation• End-users do not show interest in

testing models provided by procurement teams, and end-users do not tolerate any deviation/change in specifications

Informational• Language difference and

unfamiliarity with BCCs’ business cultures, practices and legal systems lead to ineffective negotiations

• Tendency to choose suppliers with local service support in South Africa over other suppliers

• Small product range for global sourcing leads to limited success

• A hurdle rate above realistic target leads to unachievable goals

• A short lead time limits capabilities of procurement team to fully identify cost saving opportunities

Champion at the top

Unrealistic savings target (hurdle rate)

Communication Barriers

Local Support

End-user resistance

Standards/Technical Specifications

Knowledge of BCC

Coordination Process –> End-user, Engineering, Procurement, China/India

Organisation-wide buy in

Limited Spend Bucket

Unrealistic savings target (hurdle rate)

Knowledge of BCC

CulturalBarriers

Leadership space in the past

Goals / KPIs not aligned with GEMP

‘Local OR Global’ Mindset

BEE Scorecard Impact?

BEE Scorecard Impact?

Various Constraints

Knowledge

Leadership

Goals

• Vision from top• Clear direction• Catalising buy-

in?

• Roles• Capabilities• Relationship between

departments

• Data, market intelligence• Decision-support• Processes, systems, behaviours

Organisationstructure

• KPIs• Benefit communication• Alignment with overall strategy;

overall category strategy

57

Skills, Capabilities & Partners for Success

Skills Capabilities Partners

People Organisations Ecosystems

58

Looking forward to the future Global Supply Market opportunities

Increased global capability- more choice, speed and reduced cost

New technologies- increased visibility, innovative products

Improved Supply team capability- opportunity identification, risks

mitigation, partnerships

taking advantage of… being prepared for…

Driving more resilient supply chains without weakening competitiveness

Significant disruptions- leveraging alternative markets

Potential brand damage - higher degree of validation

59

Spend Analysis

Global Sourcing Strategy & Execution Framework

Success with global sourcing is supported by a clear strategic intent, and a well developed, executed plan

Cat. Strategy&

Execution Plan

Endorsement of Business Case

Risk Assessment

Opportunity Identification

Global Market Assessment

Supplier Qualification

Product Qualification

Process – Logistics, QA

Partnerships

Change Management

Supplier Agreement

Performance Tracking

Supplier Relationship Management

Exec

utio

n

Analysis Validation Implementation

Corporate Strategy Objectives & Risks

Leadership Governance Structure

Representative execution team Partnerships

Str

ateg

ic I

nten

t

Operations Procurement

Supply Chain Legal

LogisticsSourcing

Warehousing Quality

Global Supply Strategy

Risks & Opportunities• Products• Markets • Partners

Governance Structure

Expected Benefits

60

Agenda

Clusters & Categories• China will still lead• Explore alternatives• Opex, Capex and Services• Much internal resistance

Integration• Strategy• Implementation, people• Complexity management• Leadership & change mgt







61

Final word

Global supply chains are realigning

Better risk management

necessary

Leadership is crucial

‘Right things Right’

Be bold in the pursuit of a

balance in risk & cost

Pursue new supply

markets & clusters

Get China sourcing right

Partnerships matter

Develop capabilities &

skills

62

Imagine the entire globe was your supply marketplace?

Do we know what supplies will stop our business?

Are we looking far and wide enough?

Who can we leverage to be better?

Have we validated the opportunity?

63

Multi-disciplinary

Consulting

Implementation

Outsourcing

ServiceProvider

Supplier

Logistics & Supply

Chain

Technical & Quality

Management

Managing Quality

Excellence

Methodology-based

Cost Reduction

Supplier Database

Managing Standards

Managing IP

Negotiation Industry & Category Coverage

Capex, Opex& MRO

Organisation

8000+Supplier database

Experience

5000+Sourcing & procurement projects completed

1800+Pre-qualified suppliers

10-30%Average savings (range of 5-70%)

800-2000%Typical ROI

USD 21bnSpend analysed

One of the world’s largest integrated market access & logistics companies operating within

26 countries with 25,000 employees

An Imperial Company

Global Procurement & Supply Sourcing Hubs

Global Reach

Johannesburg

Singapore

ShanghaiMumbai

DubaiBangkok

BeijingDelhi

Perth

Denver

Integrated Solutions

Analyse Source Quality Manage

LogisticsManagement Supply

Our solutions are truly integrated and span the entire end-to-end international value chain

from source to final supply

3500+Clients served

Logistics Capability

Comprehensive Global Procurement & Supply

Solutions

Comprehensive global procurement & supply solutions that drive down cost,

assure quality, expedite schedules, mitigate risk and ensure ESG

compliance

Integrated Sourcing & Supply

Global Procurement

Services

Capital Project Procurement

Solutions

1

2

3


4

• Local Knowledgeo Incorporate Local Knowledge

and Supply Market Intelligence into your low-cost country sourcing strategy to reduce Risk

• Speed to Value o Rebalance your overseas

sourcing risk profile with New Savings bringing genuine Speed to Value from harnessing Local Knowledge

• Remote Managemento Allows you hands-off Remote

Management of supplier appraisal, engagement and selection – and complex execution in remote low-cost country sourcing destinations

Global Procurement & Supply. Solved

Comprehensive global procurement & supply solutions that drive down cost,

assure quality, expedite schedules, mitigate risk and ensure ESG

compliance

Cost-downESG

Compliance

Risks Managed

Quality Managed

ScheduleExpedited

64Dubai | Perth | Beijing | Shanghai | Singapore | Bangkok | Mumbai | Johannesburg | Denver

For clients that compete in complex international markets our experience, global reach, integrated solutions, multi-disciplinary capabilities and ethos of excellence translate into business performance and profitability


Global Procurement & Supply. SolvedAxis Group International delivers comprehensive end to end global procurement and supply solutions

Best value

Quality assurance

Schedule adherence

Risk mitigation

ESG compliance

Our value proposition includes

Our offering spans the entire international value chain and includes

Analytics & Assessment

Source toContract

QualityManagement

InboundLogistics

End to end service

65

Dubai | Perth | Beijing | Shanghai | Singapore | Bangkok | Mumbai | Johannesburg | Denver


Complex end to end Global Supply ChainsAxis Group simplifies the supply chain for our clients

Global Supply Markets

Client WarehousesDe-consolidation

BondedWarehouse

End User

Port/Airport

BondedWarehouse

International Freight

BondedWarehouse Port/AirportPort/Airport

Raw Materials

Packaging

Air & ocean;sourcing & procurement

ComponentsSupplier /

Manufacturer ConsolidationQuality

Management

Capital Equipment Finished Product

Axis Group End-to-End Integrated SolutionsAxis Group Customer

• China & Northeast Asia• India & South Asia• Thailand & South East

Asia• South Africa & Africa• Turkey, Poland & Eastern

Europe• Mexico & Latin AmericaTy

pic

al G

lob

al S

up

ply

Ch

ain

Ou

r so

luti

on

incl

ud

e

Cost Reduction Diagnostics

Supply Country Selection

Market Studies

Spend Analysis

Price Benchmark

Analytics & Assessment Source to Contract Quality Management Inbound Logistics Supplier

Shortlisting

Technical Evaluation

Negotiating &

Contracting

RFx Plant Audit

Sample Arrangement

Buying Trips

Quality Management

Inspection Expediting

QA/QC Buy & Sell Exports / Imports

Inventory Mgmt.

Delivery / Distribution


3rd Party Mgmt.

Consolidation / Deconsolidation

Audits/CSR/ Modern Slavery

66

• Founded in 2002 to enable best-cost country alternative supply• Acquired by Imperial in 2019 – a USD 3bn conglomerate • Addressed over USD 8bn spend globally• Achieved on average 10-30% cost reduction (within a 5%-70% range)• Multiple industries and categories covered• Over 70 staff in 8 best-cost country sourcing hubs• Significant presence on-the-ground in Asia, Middle East and Africa• An Axis Group database of 8,000+ suppliers across markets & industries

5000+Sourcing &

procurement projects

completed

8,000+Supplier database

1800+Pre-qualified

suppliers

10-30%Average

savings (range of 5-70%)

800-2000%Typical ROI

USD 21bnSpend

analysed

3500+Clients served



About usA truly global capability positioned to be a direct supply partner or procurement Service provider

Facts and figures

67

• Integrated freight management & contract logistics provider with significant scale, offering end-to-end solutions in key industries using technology as a differentiator

• Reduce time-to-market, improve customer service & mitigate risk

Logistics AfricaMarket Access

• Take ownership of inventory & responsibilityfor the full order to cash function

• Build complex route-to-market solutions that provide our clients & principals’ access to consumers across Southern, East & West Africa -mainly in healthcare & consumer industries

Logistics International

• Partner with clients to integrate logistics functionsinto their end-to-end supply chain

• Leading capabilities in chemical & automotive industries

• Specialised express distribution capabilities

Imperial at a glance

www.imperiallogistics.com

USD3 billion in revenue in 2020

Leading provider of market access & logistics solutions

Key industries -healthcare, consumer, automotive, chemicals

and industrial

25,000+ employees in 26 countries

Ranked amongtop 30 global

logistics providers

Axis Group, an Imperial company Bringing more solutions to our clients



Level 11, Brookfield Place125 St George TerracePerth, Australia

Kobus van der Wath, CEOT +61 (0)483 386 118 / +86 138 0111 2112E [email protected]



Global Procurement & Supply. Solved

Rachel Wu, MD: Global Procurement & Supply

T +61 (0)408 859 125 / +86 135 0111 2984

E [email protected]

Axis Group International in Australia

69

1. Axis Group Selected List of Mining Categories

2. 3 Mind maps: Where/why, what & how to source globally?

3. Export clusters that matter

4. Selected ‘Export-Champion’ Profiles• China • Mexico• India• Vietnam

Appendix

• Poland• Malaysia

• Thailand

• Brazil

• Czechia• Turkey• Indonesia• South Africa

Documents

Global Markets. Connected Axis Group provides market