A.S.I.A.

Orders and Production management

Financial and payment conditions

A.S.I.A.

1) Is ASIA Sourcing International Associates a supplier ?
ASIA is offering its clients 3 levels of services : ASIA Global, ASIA Purchasing Office or ASIA Consulting. When choosing “ASIA global”, ASIA is the direct supplier of the goods ordered by its client. ASIA delievers then the goods DDP to any location selected by its client. In the second case, ASIA acts as the advanced Purchasing Office of its Client. ASIA Manages the production follow up, the orders and – if needed the transportation. ASIA Consulting is the third offer : we act as a sourcing expert for our client, by helping him to build the right strategy and implement it during a limited period of time.

2) How shall I send my request to ASIA? How long does it take to get a quotation ?
Any request should be sent directly to one of our European offices, who manages each project in totality. ASIA will dedicate to you a project manager who will be your direct contact and who will be in charge of all connections – with yourself and the manufacturing plants. In order to help us to give you the most quick and accurate answer, please provide to us (in complete confidence): drawings, pictures, samples, technical specifications, annual quantity estimated: … Usually, we will come back to you with a firm proposal within 1 or 2 weeks.

3) Confidentiality, exclusiveness…what can I get from ASIA ?
ASIA commits to keep confidential all information transmitted by its Clients (drawings, products, prices etc.) The sources selected by ASIA are also confidential . If you wish to visit the manufacturing units (for example to audit), ASIA can organise this for you. We then sign with our Client an exclusivity agreement for a given period of time within these sources. Regarding “standard” products in the European market, we can make an exclusivity agreement contract with our clients dependent on annual quantities you can commit to.

4) You have a wide presence in China : what about other Asian countries ? What about India ?
ASIA has decided to focus its expertise and attention to China due to its resourcefullness and constantly evolving know-how. The management of ASIA has an excellent knowledge of the economics, geographics and culture of the country. We have reliable partners in other Asian countries and regions (South East Asia, India, …) who will be happy to cooperate on your projects if so desired.

5) Why did you decide not to mention your client’s name on your website ?
We are proud to work with prestigious clients throughout Europe. These clients are large groups as well as small companies, distributors and tier one subcontractors. Nevertheless, our clients often ask us to keep our strong relationship confidential. This is why our client names do not appear on this website.

6) We intend to set up our own factory in China : can you help us ?
Our clients sometimes decide to relocalise part of their production of which it becomes impossible to create any added value in Europe. They then have several possible options:
- Transfer their production into (finished) purchased goods
- Relocate their production into their known workshop in LLCC.
This choice is of course a strategic decision which belongs to the client and is dependent on commercial objectives in the Chinese domestic market, human and financial resources to dedicate, assessment on the differentiation of the client’s products compared to competitor’s etc. With these 2 options, ASIA can help in setting up the business plan and the operational implementation. Our local partners and offices can propose the localisation, help in the real estate purchasing, implement the legal part of the creation and follow the operational implementation.

7) What is your experience, especially in my own business ?
ASIA covers a wide range of products in many business fields. Do not hesitate to contact us for further information. If ASIA has no specific experience in your precise field, we might have strong expertise on similar technologies, or we will select factories who have the knowledge to develop your product. Our strength is to understand quickly the specific needs of our clients. Each project is managed specifically for our client. Our engineers, purchasers, project managers and manufacturing plants are at your disposal and will describe to you precisely our experience in your related field of business.

8) Are you contributing to the downsizing of European industry ?
The aim of international trading is to give to the clients the benefit from the competitive advantage of other countries. Taking advantage of cost reductions on products for which the added value in Europe is too low enables our client to focus on their core business and on innovations necessary to sustain future profits. Besides, our clients need to take steps on low cost sourcing in order to stay competitive.

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PRODUCTION

9) A quality problem or a delay in delivery can happen: how do you treat these issues ?
One of ASIA’s objectives is to prevent and solve quality issues before shipment from the country of production. Therefore, ASIA – in partnership and on the indications of its clients- puts in place adapted quality controls. For the transportation, we are selecting the best contractors in order to fulfil our commitments. The best way to prevent delivery delays is to give the production plants enough time and visibility, for the production organisation and to prevent the possible shipping delays. As an average, the production of one container takes about one month. The transportation to Europe takes another further month.

10) How can I be sure that your quotation is perfectly matching the products that I am looking for ?
As soon as we receive your request, our experts are looking for the best appropriate production plant (quality, competitiveness, workload…). We then send to you a complete offer, integrating all supply chain costs: price of products, transportation, custom fees, stocks and logistics (if needed), deliveries. The final price is DDP – all inclusive. If you find the offer interesting, we decide together to launch prototypes or initial samples. We send these samples to you by air or sea according to your needs and “transportability” of products. Once you have formally validated the conformity of samples to the initial requirements, we propose to launch mass production.

11) Can you develop new products ?
Most of our business is to supply specific products to our clients. Each project is a tailor made development. Our dedicated ressources (ASIA engineers, manufacturers…), in link with your own engineering department, work together in order to propose all technical and logistic optimisations (redesign to cost, optimisation of containerisation, evolution of product according to new European regulations etc.)

12) What are the Minimum Quantities of Order ?
There is no fixed MOQ, rather it is dependent on the value of the goods shipped. The usual production quantity is by the container :
- container 20 feet (24 tons of goods – 30 cubic meters)
- container 40 feet (24 tons of goods – 60 cubic meters)
Working on these basis has several advantages :
- the loading plan can be easily validated between ASIA an its client
- the goods can be delivered directly to your warehouse without any delay (it takes about 5 to 7 days extra if your products are loaded together with another client’s goods (consolidation shipment)
- Ultimately, the transportation costs can be optimised when ordering by full containers (consolidation shipment is about twice as expensive).
As a conclusion, ordering by full containers is guaranteeing security, shorter deliveries and optimised prices. Nevertheless, ASIA is studying each case in particular according to its client’s needs: ordering by full containers is not an irrefragable rule.

13) My products need European conformity marking (CE) : can you manage this ?
Depending on the type of products and on the volumes, we will suggest 2 options: we can propose to you a manufacturer who already applied to CE, or develop the production in a plant which is able to produce using the required technologies. We will then apply for certification on your behalf, through official certification laboratories. Certification can be dependent on product itself as well as on the process oif production. This solution enables our client to have his own production – even have exclusiveness – but requires that the client covers some certification fees.

14) I currently buy branded products from Europe…but the price is too expensive: can we have these products manufactured in China for a lower price ?
China is currently improving its technical knowledge greatly. China is still considered as a country where counterfeiting is widespread (luxury goods, automotive parts…). This is why our clients need to make sure they have all rights on the products they ask us to produce in China (patent, trademarks, licence). If the products are protected, we can try to change with you the specifications in order to fulfil your needs, but ASIA does clearly not accept to counterfeit or copy protected products.

15) How do you manage the quality of products ?
Quality is the first issue for ASIA. Many production sites could be in a position to “more or less“ supply the product, but our experience and commitment are a guarantee that we will choose the most suitable factory able to respond to our client’s quality requirements.
The final quality obtained is the result of:
- the right initial definition of the specifications (material, dimensions, tolerances, finishing, surface treatment, loading plan etc.). This correct definition is given by the client but can be optimised by discussion between ASIA and its client.
- the validation of the samples by the client. ASIA proposes to go through this step for any project – even if it has some costs (transportation…)
- the quality controls during production and before shipment.
The cost of a quality problem is much lower if it can be found before shipment. This is why ASIA – together with its client – will set up specific quality procedures adapted to each type of production as well as the format of the reports. Our clients are trusting us because they can see we are trying our best to answer to the quality requirements issues. Should any quality problem happen, ASIA and the manufacturing plants will take all possible actions to resolve as quickly as possible.

16) Are there any types of product that ASIA is unable to supply ?
Clients are constantly asking us to develop new products or technologies that we do not yet supply. ASIA has great experience in industrial products, processes and has reliable teams in China. On this basis, we are able to propose competitive and appropriate solutions. Therefore there are no products that we are unable to work on – except patent protected products.

17) Which products are most commonly sourced from China ?
The competitive advantage of China is linked to the labour cost as well as the effort made by the country to develop in specific sectors. Therefore, the products on which the cost savings will be the greatest will be those where the cost of labour in the total cost structure is highest. In fact, most of the material costs are similar. Labour costs can be found in the manufacturing of the product itself, as well as in quality control (100% of quality control costs), in the packaging, in the assembly etc. From a technical point of view, the number of products that Chinese factories are able to produce with a European requested level of quality is increasing quickly. In terms of logistics, the products must be adapted to international transportation by containers. Finally, due to production and transportation time needed, mass produced goods are most commonly sourced.

18) Can you help us to select which of our purchasing categories would be best sourced from China ?
Through the experience of ASIA in the different business fields covered, our teams can give our clients the best advice on the type of products that are best suited to be purchased / manufactured in China. We therefore usually offer to our clients an audit of their purchasing databases, restructure the categories and propose implementation action plans.

19) Can you stock our products ? Can you manage distribution to different locations in Europe ?
ASIA offers logistics and integrated supply chain solutions. We are working with secured and efficient logistic platforms. This service can be integrated in our financial offer – as soon as our client can provide necessary data: volume, weight, quantity to be stocked, periodicity, numbers of in/out movements from the platform, security stock, etc. We can also manage your deliveries to final points of sale. ASIA can often provide its clients with stocking capacity in China. This has 2 important advantages: your products are at your disposal in Europe within one month, as well as that the stocking cost is lower than in Europe.

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FINANCES

20) How is ASIA rewarded ?
When ASIA acts as a consulting expert in sourcing, we base our fees on the time spent by the consultants to fulfil the mission.
Many of our clients wish that ASIA manages for them the globality of the project (sourcing, samples, tuning, manufacturing, following, transportation and logistics…). In this case, ASIA integrates within its offer a competitive margin paying for its services. The client will receive invoices from only one company (ASIA), who is in charge of managing all issues. Except for possible tooling fees, the client has nothing to pay for before ordering the first mass production run.

21) What are ASIA’s payment terms and conditions ?
The payment conditions of factories in China are different from their European competitors. ASIA is a company specialized in Asian Sourcing, but has no orientation in banking. Therefore, the payment conditions negotiated with our clients reflect those as used in China: deposit at the order stage, balance paid when the goods are leaving China. Nevertheless, in order to take into account the cash issues from our clients, we consider the possibility of using any appropriate financial instruments available (LC…)

22) How do you manage the foreign exchange and raw material risk ?
Foreign exchange risk :
The chinese currency (RMB) was until summer 2005 linked to a fixed parity with the USD. Since, under pressure of European and American negotiators, the Chinese Authorities have proceeded to revalue the RMB by enlarging the fluctuation band. This of course affects the competitivity of Chinese products. To this day, the RMB is not freely convertible (which is protecting it against speculation), and remains fully managed by Chinese Government. RMB is therefore still linked to USD, even if the rate is changing everyday. ASIA has of course no influence on these fluctuations and developments. Our offers are always valid for a given period of time, and subject to change according to fluctuations of currencies RMB/USD/Euro. We propose to our clients to fix prices within a fluctuation tolerance in order to give visibility. In case of important change of the parameters, we do inform our clients of consequences on any new order.
Raw material risk :
Raw material prices can change very quickly. For example, Zinc prices have doubled between summer 2005 and winter 2006. Copper has increased 3 times in same period, Nickel has increased sharply during the beginning of 2007… For these materials, the world prices are given by LME (London Metal Exchange : www.lme.com). Our offers are valid also for a given raw material price and are increasing or decreasing accordingly. Since labour cost is lower in China than in Europe, the proportion of raw material in a total price is more important. An important evolution of raw materials will have a percentage influence more important on Chinese prices than on European prices (in contrast, European labour cost will absorb these evolutions on total manufacturing cost).

23) How can I be sure to get the ordered products once I have paid the deposit ?
ASIA is a company registered under French law (RCS Paris). We can put you in contact with current clients who will share with you their satisfaction in working with us.
ASIA informs you on a regular basis of the production and transportation status in a clear and secured environment.

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