East European Working Group EEWG Round table discussion with Ukraine Government

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East European Working Group (EEWG)Round table
discussion withUkraine Government

• June 2005
• Nigel Godwin
• Intel Corporation UK Ltd.

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Intels role today

• Intel is one of the few Market Maker in the
  World.
• We like to create the environment for our
  customers to sell into.
• We spend vast amounts in developing Ecosystems to
  support our Architecture grow its markets.
• Hardware ingredients, Software, Manufacturing,
  RD.
• We work on Ecosystem development many years in
  advance of products coming to market.
• This presentation is a generic view of our
  Hardware Ecosystem today we are representing
  many elements of this Ecosystem.
• Specific EEWG company requirements for Foreign
  Direct Investment ( FDI ) would be conducted on a
  private 11 basis.

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Objective

• Our aim is to discuss with you how our Ecosystem
  is constructed, how it works today how we
  believe the Ukraine has an opportunity to play a
  central role in its future.
• Share with you our view on how we believe you can
  create and retain value wealth within your
  country.
• Discuss significant Employment Education
  opportunities.
• We recognise that you are a young Government and
  our ( EEWG ) aim is to work with you on the
  development of your region.

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Agenda

• East European Working Group introduction
• What is the EMEA Region?
• How is it serviced today?
• Elements of the hardware Ecosystem and how they
  interact with the IT Brands.
• The physical commercial needs of the hardware
  Ecosystem
• The opportunity for the Ukraine
• The assistance we can offer the Ukraine
• 3 key requests
• Open discussion / next steps

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East European Working Group (EEWG)

• Formed in 2004
• Made up of VP / Dir level members from the
  Operations departments of hardware Ecosystem
  companies with interests in East Europe.
• Members
• Arrow, Amcham, Asustek, BenQ, Celestica, Dell,
  DHL, Elcoteq, FIC, Flextronics, Foxconn, HP,
  Intel, Jabil, Luka Koper, NEC-CI, Rockwell,
  SanminaSCI, Solectron,
• New members continually being added.
• Combined annual global revenue gt 200Bn USD
• Focus
• Work together to address common Industry issues
  to build a competitive manufacturing base to
  service the EMEA market.

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Europe Middle East Africa
For most people in EEWG This is their business
zone. 1.8Bn people. 2005 PC TAM 70mu
Source Gartner Q-stats 05Q1
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How is the EMEA IT market serviced today?

• Most high volume manufacturing moved from Western
  Europe to East Europe or Asia (China) in 1999 /
  2000
• Czech Republic Hungary are now the main
  locations for high volume IT production
• Poland Hungary are strong in communications
  products.
• Turkey is strong on consumer electronics
• Where possible, ocean freight is preferred route
  in for bulky items or items that are not price
  volatile or perishable.
• Road rail infrastructure is efficient from the
  Northern European Ports to feed Western Europe
• BUT..

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Ocean Currents
China gt USA 5-10 days China gt North European
Ports 32 days!
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Intra-Europe Supply Chain
Air
OUTBOUND
Truck
X
X
Ocean
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Elements of the Hardware Ecosystem
Ship To IT Brands
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Elements of the Hardware Ecosystem
IBM HP DELL Cisco Nokia Ericsson Fujitsu
etc. etc.
Ship To IT Brands
EEWG Local Companies
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Physical Commercial Requirements of the
Hardware Ecosystem

• Land. Ideally with good access to Corridor 5
• Labour pool. Ideally technical
• Freight access
• Air handling, Port handling, Road Rail networks
• Raw materials
• Guaranteed supply of correct grade Steel for PC
  chassis
• Approx 500,000 Tonnes / year
• Alloy 6063 for Thermal cooling products ( heat
  sinks )
• Approx 17,000 Tonnes / year
• Water ( City grade )
• Soft water required for Printed Circuit Board
  manufacture.
• Electricity
• Chemicals ( for printed circuit board
  manufacturing )
• Government agency as go to department for
  assistance
• Example Czech Invest / Irish Development Agency.

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Corridor V
C3
Ukraine
Corridor V
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Opportunity for Ukraine

• Hardware is labour intensive
• Estimate 50,000 direct labour plus x indirect
• High interaction with other industries
• Domestic International
• Value add is retained in country
• Education system
• Manufacturing engine for Europe CIS
• Link with Central East European countries to
  create a strong manufacturing zone.
• Potential for World Bank, United Nations, EU
  funding.
• Transparent orderly taxation foundations
• EG Inward Processing Relief
• WTO EU standards
• Potential for ingredients to supply other regions
• Turkey, Russia CIS.

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Opportunity for EEWG

• Take 20-25 days out of the supply chain
• Quote Dell at EEWG meeting in April
• Faster time to market
• More flexible supply chain
• Long term benefits from self sufficiency
• Ingredients provided locally
• Lower labour material costs

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Assistance available from EEWG

• Workshops, Information, Best Known Method
  exchange with
• EU customs authorities
• Irish Development Agency
• Czech Invest.
• World Bank, United Nations, EU
• Education
• Technical college education schemes to provide
  pipeline of technicians.
• Management placements into EEWG facilities

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Requests from EEWG

• Introduction to Raw Materials suppliers
• Steel, Alloys
• Fast Import Exportation of goods
• Fast access across border
• Customs clearance close to plants
• Run a pilot?
• What is the roadmap for freight handling
  capacity?
• Air, Sea, Road Rail
• Government Agency to act as sponsor
• Clear hurdles
• Drive collaboration
• Establish clear understanding of objectives
• Minimise bureaucracy

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Thank You

• Open discussion