PFLEIDERER AG

1
PFLEIDERER AG

• Divisions Engineered Wood and Infrastructure
  Technology
• Staff 5,200
• Locations 8 in 6 countries
• Annual turnover 1.0 billion (40 export share)
  
• 0.7
  billion Engineered Wood
• 0.3
  billion Infrastructure Technology
  

2
Activities in the Czech and Slovak Republic

• 1975 - 1989 Sale of raw particleboards of Czech
  production in Germany
• 1985 - 1993 Purchase of particular raw wood
  assortments for the production
• of telephone poles
• since 1993 Purchase of various wooden poles
• 1992 - 2003 Sale of engineered wood for
  construction and decoration in trade
• and furniture industry
• since 2003 Market prospecting and segmentation
• Two brand strategy in trade
• Development DIY
• Key Account Management in the furniture industry

3
Foundation period Pioneer phase

• since 1985 local presence with own staff
  (purchase of wood)
• since 1993 local presence by representatives
  working on a commision commission for the sale
  with excellent knowledge of market structures
  and competitive situation as well as
  extraordinary contacts
• Strong presence of the export manager
• jointly calling on customers
• trade exhibitions

2003 Revision of the representative situation
concerning segmented market appearance
4
Our Customers Activities

• Trade
• Supplier for the furniture industry and
  assortments for carpenters
• Building materials industry
• DIY
• Industry
• Office furniture industry
• Kitchen and bathroom furniture
• Supplier for furniture industry
• Others
• Container production

5
Turnover / Market Share

• Turnover development
• 1994 pioneer phase 1.5 million
• 2001 market maturation 7.0 million
• 2003 decline in the market 5.5 million
• Market share
• At a total sales volume of around 600.000 m3
  Pfleiderer has a share of 7 . Related to the
  import market of around 200.000 m3 Pfleiderers
  share is 19 .

6
Payment Behaviour
Initial period no risk only advance
payment 1993 - 2000 relatively good payment
behaviour most of the obligations were met
few losses since 2000 - good payment behaviour
in trade - office furniture industry
deterioration of the payment behaviour (long
credit periods are used) -
kitchen furniture industry with good payment
behaviour
7
Credit Assessment of Customers
1) Collection of information by local
representative 2) Calling on customers together
with export manager 3) Credit assessment by
requesting limit at AKV/Coface 4) Exchange of
information with other suppliers about
credit standing, payment behaviour and economic
situation of the customers
8
Debt Collection in the Czech Republic

• Our experience
• Time-consuming process
• Little chances for success
• better minimize risk by good preparation

9
Bad Debt Losses since 1996
A total of seven debt collection procedures had
to be initiated. The average loss was only 0.01
of the turnover. Details Ø Principal debt
11,000 Ø Indemnification 8.000 Ø Loss
3.000