MANAGEMENT CONSULTING

INTERIM MANAGEMENT

MARKET & BUSINESS INTELLIGENCE

STRATEGIC SOURCING

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SPECIALISED CONSULTANCY FOR SOUTHEAST ASIA

STRATEGIC SOURCING - APPAREL

MANAGEMENT CONSULTINGHelping organizations to improve their performance, primarily through the analysis of existing organizational problems and development of plans for improvement. Organizations may draw upon the services of JuliusHuett®Consultancy for a number of reasons, including gaining external (and presumably objective) advice and access to our specialized expertise in manufacturing industries in emerging markets. JuliusHuett®Consultancy provides organizational change management assistance, devel-opment of coaching skills, technology implementation, strategy development, or operational improvement services.

INTERIM MANAGEMENT (iCEO™)JuliusHuett®Consultancy provides temporary provision of management resources and skills, so called ‘Interim Manage-ment Services’ which can be seen as the short-term assignment to manage a period of transition, crisis or change within an organization.

MARKET & BUSINESS INTELLIGENCEMarket intelligence' is the information relevant to a company’s markets, gathered and analyzed speci�cally for the purpose of accurate and con�dent decision-making in determining market opportunity, market penetration strategy, and market develop-ment metrics.

Business Intelligence refers to skills, processes, technologies, applications and practices used to support decision-making. Business Intelligence often aims to support better business decision-making and as such can be de�ned as a decision support system.

STRATEGIC SOURCINGSince April 2013, we are also o�erring services in Strategic Sourc-ing, predominantely for Apparels. In this function we aim for the young designers, entrepreneurs around the globe who need a reliable partner to get their designs realised, quick, in perfect quality and at competitive costs.

We are looking forward to hearing from you.

Yours sincerely,

MATTHIAS W STROBELPRESIDENT & CEO

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JuliusHuett®Consultancy, established in February 2012, is a consultancy �rm providing Management & Business Consulting, Interim Management, Market & Business Intelligence Services as well as services for Strategic Sourcing to small and medium-sized enterprises (SMEs), but also large corporations such as US Fortune 500 companies wishing to enter, improve or turnaround their businesses in the emerging markets of Southeast Asia, in particular Indonesia.

Julius Huett | 1908 - 1990 Grandfather and Inventor

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FACTS OF INDONESIA

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INDONESIA’S GARMENT & APPAREL MANUFACTURINGThe global economic crisis hit Indonesia’s apparel industry hard as demand from traditional export markets signi�cantly declined. The course of 2010 and 2011 has seen a strong recovery from the sector with rising consumer purchasing power resulting in increased opportunities for premium and greater added value products. The crisis also provided Indonesia with a platform to reposition itself as an alternative import source for key apparel markets such as the USA and Europe as wages continue on an upward trend in China. In addition, the strengthening of the Indonesian Rupiah against the US Dollar has served to bolster the recovery and boosted industry performance.

Indonesia’s garment and apparel sector is highly concentrated on the island of Java, particularly that of West Java and the island of Batam which is a free trade zone. The sector employs 1.3 million people as of 2011 making it one of the most important elements of the country’s manufacturing industry. Some 61% of manufactured garments are exported to international markets as various leading international apparel brands use Indonesia as a manufacturing base for their global exports. Exports of textiles and garments rose by 19.7% yoy to $12.1 billion USD at the end of 2011 (Ministry of Trade) with $13.7 billion USD in 2013. Despite the crisis, the USA remains Indonesia’s largest market for garments and textiles accounting for 36% of total exports followed by the EU with 16% and Japan with 5%. The most popular export items from 2007-2011 were woven clothing, underwear and knitted or crocheted clothing which together made up nearly 60% of the total value of textile exports over the aforementioned period (Source: ASEAN Quality Textiles and Garments). An interesting trend to note within Indonesia’s garment production has been the distinctive step towards increased output in more value added items such as suits, jackets, dresses and trousers for both men and women while more basic items such as shirts and vests have only risen slightly or stagnated (Comtrade Statistics 2001-2008).

The textile and garment sector o�ers both challenges and oppor-tunities as the Indonesian government looks to the sector to be a major engine of growth to 2030. One of the sector’s key strengths is the rare presence of both an upstream and downstream indus-try; both of which are well developed. The vertical integration as a result of this, from the raw materials to �nishing creates highly streamlined supply chains and a one stop solution for interna-tional buyers and sourcers. Many of Indonesia’s largest listed textile and garment manufacturers have also been active in raising funds through the capital markets during 2011-2012 for investment into new plants as well as for the acquisition of companies to complement their upstream or downstream activities even further. In addition, Indonesian textiles companies have been quick to align themselves with international industry standards by making the necessary investments to achieve certi�cations such as ISO 9001 as well as gain recognition for sustainable and environmentally friendly business practices. This has enabled the market to attract leading global fashion brands by assurances of quality, best practices and quick response times.

Investment in Indonesia’s textile and garment industry grew from 149.88 trillion RP in 2010 to 151.77 trillion RP (16.54 billion USD) in 2011; investments mainly came from local manufacturers as well as from the entrance of foreign players to the Indonesian market. The number of textile companies also rose from 2,880 to 2,980, a 3.5% increase (Indonesia Textile Association). The expan-sion of the sector and the growth in investment signi�es global con�dence in the industry as numerous textile manufacturers have come to select Indonesia as an alternative manufacturing and sourcing base to China. While still posing infrastructure and logistics related challenges, Indonesia has proved itself to be a serious player within the global textile and apparel industry. E�orts such as the government’s program to upgrade machinery coupled with the unique attributes that its labour force has to o�er being largely young, low cost and easily trained have not gone unnoticed by international investors. Collectively in 2011, new training centres such as the Indonesia German Textile Centre and the government’s restructuring program have created 61,000 new jobs, increased production capacity by 19%, boosted productivity by 9% and increased energy e�ciency by 22% (Indonesia Textiles Association).

Labour strikes in the �rst quarter of 2012 which took place at industrial areas in the Greater Jakarta area such as Tangerang and Bekasi as well as in Riau and Papua raised alarm among investors. Industrial workers took to the streets and blockaded toll road entrances causing lengthy tra�c jams to bring the issue of the minimum wage to the forefront of public attention. The matter was initially sparked by a challenge from the Indonesia Employ-ers Association (APINDO) to the decision to raise the minimum wage in the West Java area by 20-30%. This issue highlighted the need for restructuring of Indonesia’s manpower laws that were last reformed in 2004 and which are often regarded as being too

in favour of workers and unfriendly to businesses. Yet, at the same time, such regulations are also seen as being poorly enforced and thus o�ering little worker protection leading to ongoing disputes and friction between employers and workers. The textile and garment industry as a labour intensive industry was of course impacted by the labour unrest, however less so than other industries as salaries in the sector rose by 13% in 2010 and again by 1.7% in 2011 (IFT). In addition, the strikes were mainly concentrated in the Greater Jakarta area where living costs have risen considerably and manufacturing wages in general have not kept pace with in�ation. Many of the country’s largest textile and garment manufactures have already taken steps to hedge against the high operational costs of Jakarta and established additional production centres in areas such as Yogyakarta and the region of Central Java where workers unions are also less active.

Having sustained the volatility in market demand as a result of the Asian Crisis in 1998 and the global �nancial crisis in 2008; Indonesia’s garment and textile industry has emerged as a more robust industry. The drop o� in demand from traditional export markets such as Europe saw the demise of weaker players in the sector that had failed to reposition themselves in a changed economic landscape. Surviving industry players boast interna-tional certi�cations, up to date technology at their disposal and a highly competitive labour force in terms of cost and productivity. Key issues continue to plague the sector such as weak infrastruc-ture and unresolved labour disputes which impact the manufac-turing sector as a whole; yet the industry’s advantages of having both a developed upstream and downstream sector compensate for this and illustrate the potential that the sector holds once the government can fully tackle the infrastructure bottle necks and manpower legislation.

FACTS OF INDONESIA

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INDONESIA MANUFACTURING SNAPSHOTS

> Contribution to GDP: 24.2% (2011, Non Oil & Gas)

> Real Sector Growth: 6.6% (2010-2011)

> Number Employed in the Sector: 15 million

> Average Employee Salary: 1,369,000 RP/month

Main areas: Automotives, Electronics, Textiles, Footwear,

Food & Beverage, Palm Oils, Metal Products, Chemicals

Main Export Markets: China, Japan, USA, India, Singapore,

Malaysia, EU.

before having them shipped so that they are in good condition BEFORE they are put on the ship.

Terms and conditions of international trade sometimes sounds like 'crazy-talk' so we sift through the clutter and de�ne the policies and agreement that will become e�ective once you establish a business relationship with the overseas manufacturer. Payment terms, duties, and other pre-requisite will be vital in determining what is expected so having us as sourcing agent to handle these aspects is an asset to your business.

Our duties as your sourcing agent are basically 4-fold:

> To guarantee you a trustworthy supply partner> To outline the agreements with your best interest at heart> To make sure the ensuing manufacturing runs like clock-work> To make you, the small business owner more comfortable and con�dent in your supply line so you can focus your attention on building your businesss.

HOW WE WORK AS YOUR SOURCING AGENTSearching for a recognized and reliable overseas factory to manufacture your products is a lot easier and more e�ective when using a good sourcing agent (as opposed to searching for yourself).

This allows you to get more proactive in marketing your products and opening up new retail outlets (considering you now have someone managing your back-end). As your sourcing agent we will aid in locating factories that are a perfect match to your needs. They can also help to better identify which suppliers will be punctual, provide e�cient service and are trustworthy.

From there, you can be given an outline of the prices and how best they can be negotiated, a break down to how orders are placed, payments are taken and suppliers paid. Another impor-tant function of us as your sourcing agent is to do proper inspec-tion of factories to check that they have high standards and conditions. It is also important that you inspect your goods

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THE SUPPLY CHAIN AND HOW WE WORK

Consumer Needs

Product Design

Product Development

Raw Material

Factory Sourcing

Manufacturing Control

Shipping Control

Forwarder Consolidation

Customs Clearance

Local Forwarding Consolidation

Wholesaler

Consumer

1Concept phase; an idea becomes inspiration

2Sketch created

3Market niche is determined -- (along with business plan

and �nancial plan for startups)

4Fabrication and trims chosen

5Design translated into speci�cations (�ats, measument

etc.)

6Fabrics, trims, and other components approved

and sample quantities ordered

7Pattern made

8Sample garment sewn

9Sample garment tested for �t, and alterations made to pattern. (note: steps 6-8 may need to be repeated but should not be more than twice or there is a problem)

10Final sample produced

11Production costed

12Sales samples and color options sent to sales reps.

(research and planning for next season begins)

13Design sold to retailers. Resulting orders are then used

to determine production material quantities as well as to procure funding (factoring)

14Production quantities of fabrics, trims,

and components ordered.

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28 STEPS TO PRODUCING APPAREL

15Final production pattern made

16Production samples produced (Sew by)

17Patterns graded

18Marker made for each size,

and keyed to pattern repeat

19Fabric unrolled and inspected for �aws

20Cutting tickets made

21Fabric layered and cut

22Garment pieces bundled with sewing tickets

23Bundles given to sewers

24Constructed garments sewn and �nished

25Final pressing

26Final quality control inspection

27Garments tagged and hung

28Packing slip and invoice created

CONTROL AT ALL TIMEWe are making sure, that at each of those 28 steps you are being represented at its best, with the best result. Our fees are relatively �exible to the amount of goods and services being purchased over a particular time.

Please �nd more details about our fee packages at the next page.

Percentage fee, calculated on the overall sourcing volume. Please speak with us to get a personalised quote.

Flat fee which can be paid on monthly basis, calculated from start of services until delivering of the ready made goods.

OUR SOURCING SERVICE FEES

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PACKAGEONE

PACKAGE TWO1 2

(In some cases we can also o�er a combination of the two).

J A V AWe have access

to over 900 Garment Factories

across Java.

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CONTACT

JULIUS HUETT CONSULTANCY LIMITED6 LANGDALE COURT | WITNEY | OXFORDSHIRE | UK | OX28 6FGT: +44 (0)7506 722163 E: INFO@JULIUSHUETT.COM W: JULIUSHUETT.COMREGISTERED IN ENGLAND AND WALES NO. 7970666 | VAT. REG. NO.: 131 7903 27

JULIUS HUETT CONSULTANCY INDONESIAOFFICE 8 | LEVEL 18-A | JL. JEND SUDIRMAN KAV. 51-53SUDIRMAN CENTRAL BUSINESS DISTRICT (SCBD)JAKARTA | SELATAN | 10310 | INDONESIA | T: +62 (0812) 12 556861