SPX-CQ PresentationSPX-CQ Presentation

April, 2006April, 2006

About SPX-CQAbout SPX-CQ

Subontracting and Partnership Exchange Subontracting and Partnership Exchange of Chongqing(SPX-CQ) is a non-for-profit of Chongqing(SPX-CQ) is a non-for-profit organization founded by China Chongqiorganization founded by China Chongqing Government in cooperation with UNIng Government in cooperation with UNIDO (United Nations Industrial DevelopmDO (United Nations Industrial Development Organization) in western China in 20ent Organization) in western China in 2004.04.

United Nations Industrial United Nations Industrial

Development Organization Development Organization UNIDO is the UN’s industrial specialistUNIDO is the UN’s industrial specialist

Responsible for the sustainable economiResponsible for the sustainable economic development of developing countries c development of developing countries and countries with economies in transitiand countries with economies in transitionon

The Aim of the SPXsThe Aim of the SPXs

SPXs are technical information, and matSPXs are technical information, and matchmaking centers for industrial subcontchmaking centers for industrial subcontracting and partnerships between buyerracting and partnerships between buyers and suppliers (often SMEs), aiming at os and suppliers (often SMEs), aiming at optimizing the manufacturing capacities ptimizing the manufacturing capacities of the affiliated industries.of the affiliated industries.

Objectives of the SPX-CQObjectives of the SPX-CQ

Establishing and developing the long-Establishing and developing the long-term and stable business cooperation term and stable business cooperation between between European and American SMEs European and American SMEs and Chinese SMEs from Western and Chinese SMEs from Western China.China.

Activities of SPX-CQActivities of SPX-CQ

SPX is an enabler of a better SPX is an enabler of a better performance of the purchasers performance of the purchasers

and suppliers through his various and suppliers through his various activities.activities.

Matchmaking: select, locate suppliers Training & Consultancy

:i.e. Improve quality,

technology & productivity Oraganisation of fairs :Raising images and

brands of local enterprises

Target Groups of the SPX-CQTarget Groups of the SPX-CQ

European European enterprisesenterprises-- having strong desire of developing-- having strong desire of developing

Chinese suppliers in metal and plasticChinese suppliers in metal and plastic

processing and be willing to provideprocessing and be willing to provide

support for the supplierssupport for the suppliers

-- specializing in R & D, production and/or-- specializing in R & D, production and/or

sales of automotive, motorcycle partssales of automotive, motorcycle parts

system or machinery equipmentsystem or machinery equipment

Target Groups of the SPX-CQTarget Groups of the SPX-CQ

The SMEs in Western ChinaThe SMEs in Western China-- -- strong desire of entering into international market strong desire of entering into international market

and be willing to invest for improvementand be willing to invest for improvement-- having strong metal and plastic processing -- having strong metal and plastic processing

capability, good plant, equipment and other capability, good plant, equipment and other infrastructuresinfrastructures

-- -- having idle production capacity or capability to enlhaving idle production capacity or capability to enlarge productionarge production

-- having ISO9000 certificate, adequate-- having ISO9000 certificate, adequate management level and skilled techniciansmanagement level and skilled technicians-- -- having annual production value within 1 million having annual production value within 1 million

to 30 million EUROto 30 million EURO

Expected impact on target Expected impact on target groupsgroups

Cost Control Cost Control Technological improvementsTechnological improvements Total quality (zero defects) managementTotal quality (zero defects) management Better organization of work within the Better organization of work within the

enterpriseenterprise Logistics (just-in-time practices)Logistics (just-in-time practices) Environment protectionEnvironment protection

Benefits for Target GroupsBenefits for Target Groups

For European For European enterprisesenterprises::

-- build up their own supply chain in -- build up their own supply chain in

ChinaChina

-- reduce the purchase cost-- reduce the purchase cost

-- gain the new trading and investment-- gain the new trading and investment

opportunities and promote theiropportunities and promote their

competitiveness in the market.competitiveness in the market.

Benefits for Target GroupsBenefits for Target Groups

For the SMEs in Western China:For the SMEs in Western China:-- creating and sharing the new trading-- creating and sharing the new trading opportunities and expanding theiropportunities and expanding their exportexport-- improving in cost control, technology -- improving in cost control, technology upgrading, quality management, upgrading, quality management, internal organization, logistics andinternal organization, logistics and environmentenvironment

Collecting data about

enterprisesin the country

Constantlyupdated

local (SPX level)database

Entering collecteddata intoDatabase

The SPX staffenters criteria'sgiven by caller

into the software

SPX-CQ receives your enquiry

Databasefinds the results

of the search

And the enterprise,after finding what it islooking for, is reroutedto the SPX-CQ,for more information.

How does a SPX work?How does a SPX work?

Standardized Tools Standardized Tools

Standard QuestionnaireStandard Questionnaire

General Information on the EnterpriseGeneral Information on the Enterprise• Headquarters and plant address Headquarters and plant address • Client references Client references • Partnership information Partnership information

Enterprise ActivityEnterprise Activity• Sectors and subgroups of activity Sectors and subgroups of activity • Products (catalogued items) Products (catalogued items) • Subcontracting demand (main contractor) Subcontracting demand (main contractor) • Quality certificate, patents and licensesQuality certificate, patents and licenses

Production Related DataProduction Related Data• Subcontracted products Subcontracted products • Raw materials and components Raw materials and components • Specialized subcontracting supply (sub-contractor) Specialized subcontracting supply (sub-contractor) • Machines and operations Machines and operations

Standardize ToolsStandardize Tools

DatabaseDatabase

The database is established with UNIDO methodology, The database is established with UNIDO methodology, nomenclatures and “Outsourcing” software. At present 300 nomenclatures and “Outsourcing” software. At present 300 enterprises’ data have been entered into the database after enterprises’ data have been entered into the database after the assessment of SPX-CQ. Most of these enterprises the assessment of SPX-CQ. Most of these enterprises specialize in manufacturing of the mechanical equipment specialize in manufacturing of the mechanical equipment and components of automobiles and motorcycles. It is and components of automobiles and motorcycles. It is planned that by the end of 2006 there will be 500 planned that by the end of 2006 there will be 500 enterprises’ data in the database, including the enterprises enterprises’ data in the database, including the enterprises in the electronic, chemical, and house electric appliance in the electronic, chemical, and house electric appliance industries.industries.

Standardize ToolsStandardize Tools

DatabaseDatabase

SPX Sector DistributionSPX Sector Distribution

Mechani calPar t s14%

Automobile48%

Motorcycl e23%

Machi nery9%

I nst rument4%

Others2%

Standardize ToolsStandardize Tools

DatabaseDatabase

Output Value of SPX Members (EURO)Output Value of SPX Members (EURO)

0.1-1 mil10%

1-3 mil25%

above 30 mil10%

3-30 mil55%

0

Achievements of SPX-CQAchievements of SPX-CQ

Matchmaking ActivityMatchmaking Activity

312 purchasing orders received from international buyers312 purchasing orders received from international buyers

203 local enterprises selected from database received the 203 local enterprises selected from database received the purchasing orderpurchasing order

115 local enterprises put up their quotation for the 115 local enterprises put up their quotation for the purchasing productspurchasing products

36 quotations have been accepted and in further 36 quotations have been accepted and in further negotiation.negotiation.

Achievements of SPX-CQAchievements of SPX-CQ

Organization of fairsOrganization of fairs

Abroad:Abroad: Subcon in Birmingham in May 2005, Chongqing delegSubcon in Birmingham in May 2005, Chongqing deleg

ation:11 persons, exhibiting and visiting ation:11 persons, exhibiting and visiting

MIDEST in Paris in December 2004, Chongqing delegatMIDEST in Paris in December 2004, Chongqing delegation: 16 persons, exhibiting and visitingion: 16 persons, exhibiting and visiting

MIDEST in Paris in November 2005, Chongqing delegatMIDEST in Paris in November 2005, Chongqing delegation: 12 persons, exhibiting and visiting ion: 12 persons, exhibiting and visiting

Achievements of SPX-CQAchievements of SPX-CQ

Organization of fairsOrganization of fairs

Home:Home: Auto Chongqing 2004: Exhibitors: 500, Visitors: 86,000;Auto Chongqing 2004: Exhibitors: 500, Visitors: 86,000; Business match-making meeting: 102 suppliers meeting with 22 pBusiness match-making meeting: 102 suppliers meeting with 22 p

urchasersurchasers

Auto Chongqing 2005:Exhibitors: 500, Visitors: 119,000;Auto Chongqing 2005:Exhibitors: 500, Visitors: 119,000;Business match-making meeting: 111 suppliers meeting with 20 Business match-making meeting: 111 suppliers meeting with 20 purchaserspurchasers

Subcon China 2005Subcon China 2005: Exhibitors: 525, Visitors: 8,236;: Exhibitors: 525, Visitors: 8,236; Business match-making meeting: 130 suppliers meeting with 30 Business match-making meeting: 130 suppliers meeting with 30

purchaserspurchasers

Achievements of SPX-CQAchievements of SPX-CQ

Asia-Interprise ProgrammeAsia-Interprise Programme

Successful preparation of Asia-Interprise program application as tSuccessful preparation of Asia-Interprise program application as the main applicant in March 2006.he main applicant in March 2006.

Project Title: Project Title: Fostering the industrial subcontracting and partnership exchange Fostering the industrial subcontracting and partnership exchange

between European and American SMEs and Western China SMEsbetween European and American SMEs and Western China SMEs

Location Location ChinaChina ， ， West part of ChinaWest part of China ， ， ChongqingChongqing

Asia-Interprise Programme(Cont’d)Asia-Interprise Programme(Cont’d)The aim of the actionThe aim of the action: : Establishing and developing the long-term and stable business coEstablishing and developing the long-term and stable business co

operation between European SMEs and Chinese SMEs from West operation between European SMEs and Chinese SMEs from West China, helping them develop subcontracting business; reducing China, helping them develop subcontracting business; reducing European SMEs’ purchase cost; enhancing the management leEuropean SMEs’ purchase cost; enhancing the management level and export capabilities of Chinese SMEs.vel and export capabilities of Chinese SMEs.

The main activitiesThe main activities: : Face-to-face matchmaking meeting between Face-to-face matchmaking meeting between European European SMEs SMEs

and Chinese companies in Chongqingand Chinese companies in Chongqing The duration of the projectThe duration of the project: : From 2006, 18 months From 2006, 18 months

Achievements of SPX-CQAchievements of SPX-CQ

Why Should You Come to ChinaWhy Should You Come to China

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Cost Advantages Higher Flexibility Risk Reduction Environmental

Policies

Raising Quality Outsourcing Non-

Core Activities

Entry to New

Technology

Reasons for Companies OutsourcingReasons for Companies Outsourcing

Why Should You Come to ChinaWhy Should You Come to China

Annual Cost of Labour (USD)Annual Cost of Labour (USD)

1500

5000060000

45000

Chi na USA J apan Europe

ABOUT CHONGQINGABOUT CHONGQING

Chengdu

Upgrade is a key word for Chongqing. While still lagging behind its coastal counterparts, the city, inaugurated into a municipality directly under the central government eight years ago, is striving hard to upgrade its infrastructure facilities, shore up its core competitiveness in pillar industries and transform into a real economic hub in Southwest China.

“Chongqing City Upgrade”, China International Business, May 2005

About ChongqingAbout Chongqing

Set in the middle reaches of the Yangtze, this former trading centre and treaty port has long been the economic hub of western China. But after its government was given municipal control of surrounding territory the size of many countries, it has grown and grown, becoming what is now the world's biggest municipality with 31 million residents (more people than Iraq, Peru or Malaysia). The population in its metropolitan areas will double from 10 million to 20 million in the next 13 years.

“Invisible City”, Guardian Unlimited © Guardian Newspapers Limited 2006

Chongqing’s IndustryChongqing’s Industry

Chongqing is one of the most important Chongqing is one of the most important Manufacturing bases in China. It is very Manufacturing bases in China. It is very strong in automobile and motorcycle, strong in automobile and motorcycle, machinery, mechanical/ electronics and machinery, mechanical/ electronics and Chemical industries.Chemical industries.

Automobile IndustryAutomobile Industry

Share of the automotive sector of the whole industry Share of the automotive sector of the whole industry

in Chongqing and of the whole automotive industry in China (2003)in Chongqing and of the whole automotive industry in China (2003)

Source: Market Study Automobile Manufacturers and Suppliers in Chongqing by DIHKSource: Market Study Automobile Manufacturers and Suppliers in Chongqing by DIHK

Branch Branch in Chongqingin Chongqing （（ %% ）） in Chinain China （（ %)%)

AutomobileAutomobile 16.816.8 4.74.7

MotorcycleMotorcycle 7.57.5 25.525.5

Automobile Part & ComponentAutomobile Part & Component 4.94.9 3.03.0

Motorcycle Part & ComponentMotorcycle Part & Component 11.811.8 35.835.8

Total AutomotiveTotal Automotive 39.539.5 6.86.8

Welcome to contact us to do business in Welcome to contact us to do business in Middle and Western China.Middle and Western China.

http://www.spx-chongqing.orghttp://www.spx-chongqing.org

Thank youThank you Muchas GraciasMuchas Gracias Muito ObrigadoMuito Obrigado Merci BeaucoupMerci Beaucoup DankeDanke