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FANTREE NEWS Our in-house magazine for employees and friends of DKSH

12/2008

Additional expertise for DKSH

Annual Management Meeting

What the two new members of our Board of Directors wish for DKSH’s future

DKSH’s management team meets in Bangkok for three days of important business updates and intense discussions

A priceless asset for our business partners

Developing a unique face for DKSH

Our Business Unit Performance Materials helps its business partners handle the economic crisis and even turn it into an opportunity

The latest update on the new trade fair design and an introduction to the Business Unit value propositions

DKSH’s new booth at the Health Ingredients trade fair in Paris.

Think Asia. Think DKSH.


Contents

3

WELCOME

3

Letter from the CEO

4

GROUP NEWS

4 7

16 17 18

Setting the course for uncharted waters DKSH celebrates 50 years of partnership with Lindt & Sprüngli in Hong Kong Meet the two new members of our Board of Directors Step by step, creating a unique face for DKSH Bringing value propositions to life GO! for continued success DKSH in person – Somboon Prasitjutrakul, our Executive Vice President, Business Unit Consumer Goods Moving the Corporate Finance function closer to our operations ICS – looking beyond a successful roll-out A bold decision pays off

20

CONSUMER GOODS

20 22

DKSH and Procter & Gamble: a long-standing partnership throughout the world Successful partnerships in Thailand: Nestlé, Wyeth and Kraft

24

HEALTHCARE

24 25 26 27 27

At the leading edge with our new IT tools Thousands of happy users Proof of DKSH’s customer centricity A strong team produces a good harvest Excellent teamwork enables Alcon implementation

28

PERFORMANCE MATERIALS

28

A dependable partner in turbulent times – Business Unit Performance Materials helps customers overcome all kinds of turmoil Sweet success for Performance Materials Business Line Food & Beverage Industry in Edward Keller Philippines

8 10 11 12 14

12 GROUP NEWS The second Brand Champion Workshop in Switzerland

20 CONSUMER GOODS DKSH and Procter & Gamble: a continuing success story

24 HEALTHCARE Powerful new IT tools for a competitive advantage

32 33

TECHNOLOGY

33 34 35 36

Taking off in the aerospace industry DKSH Australia – a forerunner in environmental technologies Joint venture with TRUMPF extended for another ten years Starting small and growing bigger

38

PRESS REVIEW

42

DKSH ON STAGE

42 43 44 46

DKSH Cambodia – continued rapid growth The largest Healthcare distribution center in Thailand Newsflash: stories from around the world A red carpet for a successful brand

47

INSIDE DKSH

47 47

A minute with… Captain Danny The DKSH puzzle

DKSH Fantree News Editorial Team Martina Ludescher, Anne-Catherine Rüegg, Sarah Elber, Lin Dou Contact DKSH Fantree News P.O. Box 888 Wiesenstrasse 8 CH-8034 Zurich Switzerland E-mail communications@dksh.com Layout, concept entertainment research, Berlin

42 DKSH ON STAGE New DKSH distribution centers

2

Print NZZ Fretz AG, Schlieren


WELCOME

Dear Colleagues and Friends of DKSH I have absolutely no doubt that, with DKSH as the clear market leader in our industry, we are in an excellent position to even further improve our market share. Dr. Joerg W. Wolle, President & CEO, DKSH Holding Ltd.

2008 is drawing to a close and it looks like becoming another very successful year for our company. However, even market leaders like us, well-positioned in their respective industries, might not be able to escape developments originating from the financial crisis, global developments of unpredictable dimensions. The world is a different place today than it was 12 or even six months ago. Generally, I do not believe that the business fundamentals will take on crisis proportions for DKSH, although some of our businesses may be more affected than others. While no company will be immune to the crisis, some will weather difficult times much better than others and come out of a downturn stronger. Today, nobody can safely predict how the economy will develop. The changes in the marketplace therefore require a proactive and decisive response. I am convinced that people like us, who are close to the pulse of the market, should be able to deal with the risks and opportunities in such a way that DKSH will benefit and emerge stronger – provided we keep a close eye on risks, take care to manage our balance sheets well, monitor and review receivables, keep risks and costs under control and capitalize on the many opportunities that will present themselves. As some of you will know, the Chinese word for crisis “wei ji“ combines two characters – risk and opportunity. I have absolutely no doubt that, with DKSH as the clear market leader in our industry, we are in an excellent position to even further improve our market share. Our business model is very well balanced and the company is financially in good shape. In our more than 140-year history, we have seen our fair share of troubled times and turbulence. Our seasoned senior management team successfully steered the ship through the Asian financial crisis in 1997/8 and the company came out of it stronger and more dynamic. Our majority shareholders not only have a deep commitment to our company, but are also emotionally rooted in its legacy.

The new shareholders who came on board this year made their investment with a view to the longer term. As far as ownership, management track record and stability are concerned, we are operating on a sound basis. What are the other factors that make me believe that DKSH will emerge as one of the winners from the present global challenges? In difficult times, customers and suppliers would rather deal with a financially sound international group than with small, local trading companies. Suppliers and customers are likely to increase the focus on core competencies and thus outsource more business to specialized providers such as DKSH. More and more companies will be looking for strong external partners to manage their Market Expansion Services in Asia. Interesting acquisition opportunities at better prices will arise, along with good prospects for talent recruitment. So let’s be ambitious and take the chance to strengthen our competitive position! This fiercely positive spirit dominated the Annual Management Meeting from November 19-21 in Bangkok. The get-together of top DKSH executives proved to be ideally timed to discuss the current challenges, raise awareness and prepare for the uncertain economic and financial developments. Together, we did our homework diligently and are now well-placed and prepared to take advantage of the opportunities. You can read a report on the Bangkok meeting and the topics discussed on pages 4-7. Other stories covered in this edition of Fantree News include the opening of the Finance Center in Singapore, the new members of the Board of Directors and the Brand Champion Workshop that was held in Switzerland’s famous Appenzell region. I would like to thank all DKSH staff all over the world for their outstanding contribution to our company’s continuing success story and wish you all a happy holiday season and a prosperous 2009!

3


GROUP NEWS

Setting the course for uncharted waters

The Annual Management Meeting 2008 was held from November 19-21 in Bangkok. Despite many companies currently cancelling management meetings, training seminars and travel due to the financial crisis, we at DKSH see it as extremely important to have face-to-face interactions and align ourselves in our strategic thinking and implementation in the challenging times ahead. We are ready for the future! Two years after the last meeting in Siem Reap, around 70 top DKSH executives came together in Bangkok under the motto “DKSH – setting the course for uncharted waters”. Clearly, the timing of the get-together could not have been better and the peaceful atmosphere of the Marriott Resort & Spa Hotel was the ideal place to plan the future of DKSH. There have been many new developments since the group last met, so the Executive Board decided to dedicate most of the time to briefing the top executives personally on the expansion plan for DKSH, the development of our key corporate projects and initiatives, the impli-

70 top DKSH executives came together in Bangkok.

4

cations for Business Units (BUs) and the company overall, as well as on new roles and responsibilities within Corporate Center. Our President & CEO Dr. Joerg Wolle opened the meeting, welcoming participants and presenting the aims and agenda of the three-day event. He first looked back on the development of DKSH from 2002 to today, a matchless success story since the merger, and one to which all those present have contributed. The numbers documenting our progress are impressive: at the end of 2007, our employment base has grown by 51% or 9,100 new jobs, our transaction value by 87%, our profits by 132% and the number of business locations – the “DKSH footprint” – has increased by 90% to 455 offices. Year after year, DKSH has continuously achieved double-digit growth in terms of revenues and profitability. This performance is based on the reinvention of our business model and gave rise to a distinctive new category or industry – Market Expansion Services. What else has made us successful? We command a strong network, both within and across countries. We are a well-man-

aged and financially stable company with Swiss roots. And we provide excellence in execution: good people, efficient, stateof-the-art processes and finest service quality. Other success factors are our unbureaucratic, hands-on approach when it comes to business and leadership, our long-established names and our diversity in people and businesses. The factors of future success Our CEO then moved to an important piece in the puzzle of our future success story: Project Rainbow, the search for new investors. The project was completed in early 2008, when we took on board three new investors who bought some or all shares of two minority shareholders and at the same time invested further funds to increase our share capital and significantly widen our equity base. The DKSH Group now has three new wellknown, committed investors to support our expansion and accelerated growth with financial resources, know-how and experience, as well as relationship networks – Anova Holding, Swiss financial entrepreneur Rainer-Marc Frey, and FFP,


Success factors are our unbureaucratic, hands-on approach when it comes to business and leadership, our long-established names and our diversity in people and businesses. the French holding company of the wellknown Peugeot family. Rainer-Marc Frey and Robert Peugeot have also joined the Board of Directors of DKSH (see article on pages 8/9). The successful conclusion of Project Rainbow shows that DKSH is a company which can attract top-class investors. We have an excellent track record and a unique story to tell, we are seen as a company one step ahead of the competition in terms of strategy, innovation and infrastructure. However, as our CEO likes to say: “We should never rest on our laurels”. Project Rainbow was a great opportunity to find areas for improvement and additional factors for the future success of DKSH, including further professionalization, improved risk management, completing the roll-out of Pegasus, the ICS project, intensifying top talent development, as well as branding and communication. The CEO continued by presenting the DKSH expansion plan, which defines the route for the next three years. As Dr. Wolle put it: “By end of 2011, I want to have completed the next growth phase, achieved the next level of professionalization. And I want DKSH to be known as the No. 1 in Market Expansion Services. Both our previous and our new investors want to see growth: “Think Asia. Think DKSH.” becoming reality. Our mid-range plan thus foresees further strong expansion.” Our CEO then touched on a topic close to everyone’s hearts, the financial crisis, expressing the opinion that a company like ours, so close to the pulse of the market, should be able to deal with the risks and opportunities in such a way that DKSH will benefit and emerge stronger – provided we keep a close eye on risks, manage our balance sheets well, monitor and review receivables, keep risks and costs under control and capitalize on the many opportunities that present themselves. In the current situation, DKSH as the clear industry leader is in an excellent position to improve its market share. In addition, our business model is very well balanced. Our two largest BUs – Healthcare and Consumer Goods – are likely to benefit from the crisis. However, Luxury &

Lifestyle will suffer from less demand for luxury goods and for Technology we expect certain investments in capital goods to be postponed. Performance Materials is very well-diversified across regions and industries served, but will still feel the effects of the negative market environment in certain areas. Dr. Wolle: “We have addressed the issues proactively; we have done our homework together in Bangkok and are now well-positioned and prepared to take advantage of the opportunities arising from the uncertain economic and financial situation. I am very glad that we as a group have agreed not to participate in the recession and to respond to the current challenges with our trademark fighting spirit, our ongoing appetite for growth and expansion and a concerted extra effort from everybody for the year end in order to continue our record of continuous double-digit growth in 2008.” To round off the first day, Chairman Adrian T. Keller gave a drinks reception on the Marriott’s picturesque Riverside Terrace and warmly welcomed all participants. He spoke of his strong belief that it is of utmost importance to meet personally and decide how to set the course for uncharted waters together. As Adrian Keller put it: “We can’t ignore the finan-

cial crisis, but we need to focus on opportunities, while proactively addressing costs. We have a seasoned, well-proven management team which can be counted on, but which can also count on the support of a strong majority shareholder. We have achieved a great deal of progress since the merger, with expansion at all levels. We want our success story to go on. We are now preparing for the next big step and we will continue to invest, even in difficult times. “ Moving finance closer to operations The second day began with a presentation from CFO Stuart Davy on the yearto-date performance in 2008, followed by the BU Managers with an overview of their year-end estimates for 2008 and targets for 2009, along with the updated mid-range plans to 2011. The BU presentations were followed by Stuart’s update on the new Finance Center in Singapore, which became operational on August 8. Key finance functions are now combined under one roof in Singapore in order to move activities of the Finance team closer to our operations and thus improve and speed up decision-making and management support processes for the BU Managers and facilitate more proactive interaction with country operations.

Special guest Andreas W. Keller, Chairman of Diethelm Keller Holding, in discussion with Claus Bressmer (left) and Adrian Eberle (right).

5


GROUP NEWS

Stuart also reported on the newly established functions of Group Treasury and Tax. Roger Schnueriger, our new Vice President Treasury, gave an overview of the Group Treasury function, which foresees a partial centralization and improved coordination of all treasury-related issues, including optimization of the funding structure for the operating units. You’ll find more on the new center on page 16. After lunch, Marcel W. Schmid, Executive Vice President Governance, Compliance and Resources, took the podium to talk about the planned Fantree Academy. Enhancing local and countryspecific training activities, the Academy is designed to be the new corporate training and development curriculum for DKSH’s senior and middle management and new talents. As a services company, DKSH’s major asset is people. The Academy aims to make this asset even more valuable by providing high-quality training, management and talent development, networking opportunities, sharing external and internal best practices and familiarizing people with our employer branding and corporate identity.

DKSH Corporate Wear – a proud statement to the world.

6

News about branding and communications projects Next came an update from Martina Ludescher, Vice President Strategy & Corporate Communications, on all aspects of the branding project. The basics are now established and what we have achieved so far is becoming visible, as the implementation of the new corporate design is progressing rapidly and will be completed by the end of 2009. The DKSH brand is today a lighthouse providing guidance and direction not just for marketing or design, but for all parts of DKSH. It concerns every unit of our organization, every BU and every country. The overall brand identity is now also filtering down to the BUs, where the managers have successfully worked out their value propositions. These are now being implemented with great diligence, as DKSH’s performance in the markets is the most important way of creating a real brand experience. An attractive new design for DKSH’s trade fair booths tying in closely with the interior design and signage concepts premiered at the CPhI Pharma trade fair in Frankfurt in October, as well as the Health Ingredients fair in Paris. The new look can be seen on the cover of this issue. In October, the second Brand Champion Workshop was held, this time in the beautiful Appenzell region of Switzerland, to prepare the Champions for their new tasks. When other companies head on a branding project, they usually begin by hiring a team of expensive brand managers. We consciously went for a different approach and decided to use existing resources and train them. That is how the position of Brand Champion was invented. Our experience so far confirms that we are on the right track. As of next year, the Champions will not only be responsible for Brand Design implementation, but will also deal with integrated communications. There’s more on the workshop on pages 12-13. Many newly developed communications materials were presented, such as the new Business Unit and Business Line folders,

brand identity posters, screensaver and image ads. Finally, the goals for 2009 for Corporate Communications were set out, which include renaming operations to DKSH in certain markets where legacy names are still in use, implementing the value propositions and communications strategy and developing communication measures. Claire Burgess and Preman Mahaldayvan then presented the various reconstruction and relief projects that were realized after the destruction by Cyclone Nargis in Myanmar, ranging from providing food and mobile clinics to school and hospital buildings, as well as setting up wind generators. These projects could only be carried out thanks to the impressive fund-raising efforts of both Diethelm Keller Holding and DKSH – a total of nearly USD 800,000 was collected for the Myanmar relief programme. In the evening, the assembled executives were invited to view a fashion show of the new DKSH Corporate Wear, including the very latest trend: DKSH swimwear! Refining our BU and corporate strategies Day three was opened by Gonpo Tsering, Senior Executive Vice President Operations & Business Support, who updated participants on CSSC and Project Pegasus. Gonpo outlined the most important milestones achieved so far and gave some reasons why he and his team are so successful. The main part of his presentation was about the vision and plans for the future: turning the whole IT operation into a competitive advantage for DKSH. You’ll find more on our successful CSSC on page 18. Jan Mueller then presented an overview of corporate logistics projects. The newly created Corporate Logistics team, the “functional home” of DKSH’s logistics, has already reviewed many logistics facilities in different markets and worked out improvements or synergies to both enable and strengthen the BUs in their efforts to provide Market Expansion


We have an excellent track record and a unique story to tell, we are seen as a company one step ahead of the competition in terms of strategy, innovation and infrastructure. Services. In the future, the focus lies on setting standards and guidelines, realizing new synergies, sharing information and transferring best practices from one country to others. After a short coffee break, Martina Ludescher and Luke Mitchell spoke on the strategy project with Roland Berger, one of the world’s leading strategy consultants. The project was launched with the aim of sharpening our existing corporate and BU strategies in order to get clearer direction on how we want to position ourselves in the markets and to put all strategies into a consistent framework for the whole Group. BU Technology was chosen as the first to go through the process. The pioneer Technology project has been completed in the meantime, with Performance Materials and Healthcare next in line and Consumer Goods to follow at the beginning of next year. The finalized corporate and BU strategies will be pre-

sented at the next Buergenstock Meeting in May 2009. The next speaker was Marcel W. Schmid on governance, compliance and resources. Marcel introduced the different steps of the Merger and Acquisition (M&A) process: from strategic planning to execution and final integration. He went on to tell his audience of the various ongoing M&A projects and then gave an update on the progress of the ICS project, as well as other key programs in the area of Corporate Affairs and Legal and Risk Management.

ties for networking with participants across all BUs. There was broad consensus that the meeting had been a great success and a very rewarding experience for all, with a lot of teambuilding and knowledge-sharing across BUs and countries. The overriding feeling at the end of three days’ hard work was of a team united with a single objective: an even more successful future for DKSH. A big thank you to Ursula Reiling and Vanida Pitaksongram and everyone else involved for their great efforts in organizing this very successful and productive meeting in Bangkok.

Ready for the future Martina Ludescher

The final evening held a special treat: After cocktails on the Marriott pier, participants boarded the “Wanfah” for a memorable dinner cruise on the Chao Phaya River, which rounded off the meeting and provided many more opportuni-

Vice President Strategy & Corporate Communications DKSH Management Ltd. Switzerland

DKSH celebrates 50 years of partnership with Lindt & Sprüngli in Hong Kong For half a century, DKSH and Lindt & Sprüngli have worked together in Hong Kong supplying consumers with Lindt Swiss premium quality chocolates. This long-standing relationship has enjoyed a significant record of achievements of which DKSH can be proud, the latest being a successful expansion into mainland China. Lindt is undisputedly a premium brand of Swiss chocolate and the clear market leader in the dark chocolate segment. On September 2, DKSH gave a gala dinner in Hong Kong to celebrate the 50th anniversary, attended by executives and the CEOs of both companies and the Swiss Deputy Consul General, Johann Müller. Dr. Joerg W. Wolle, President & CEO of DKSH Holding Ltd.: “The success of Lindt in Hong Kong is an outstanding case study of DKSH’s Market Expansion capabilities. Information from point-of-sale customer surveys, as well as attractive displays, enable us to be proactive in expanding the market for Lindt chocolates in Hong Kong

and beyond to mainland China, where excellent progress and exponential growth have been achieved in key cities such as Shanghai and Beijing.” Ernst Tanner, Chairman & CEO of Lindt & Sprüngli: “Our businesses are united by a long and fascinating history. There are many similarities and parallels that date

back well over half a century, and Lindt & Sprüngli and DKSH are two successful companies that share the same concepts of mutual respect and efficient cooperation. Combining our individual proficiencies, specific know-how and entrepreneurial strengths to achieve cooperation is both fruitful and beneficial.”

Ernst Tanner, Chairman & CEO of Lindt & Sprüngli, Hansjürg Klingler, Senior Vice President of Lindt & Sprüngli, and Dr. Joerg W. Wolle, President & CEO of DKSH Holding Ltd., at the Celebration Dinner.

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GROUP NEWS

Meet the two new members of our Board of Directors

At the beginning of this year, DKSH announced a capital increase and an opening up of its shareholder base. Two new investors, Robert Peugeot and Rainer-Marc Frey, also joined our Board of Directors. When two minority shareholders announced they intended to sell all or part of their shares in DKSH, it was decided to combine this with a capital market transaction to increase share capital. Both this

capitalization and the addition of new shareholders put us in a position to pursue an accelerated growth strategy. DKSH was looking for new investors who strongly support its current and future expansion plans, not only in terms of financial resources, but also by bringing in know-how, experience and contacts. Moreover, a long-term perspective as well as a real interest in and appreciation of our company were decisive in the choice of new shareholders in order to seize

market expansion opportunities. In FFP (Société Foncière, Financière et de Participations), Rainer-Marc Frey and Anova, DKSH was lucky to find shareholders who fulfill precisely these requirements. With a shareholding of more than 10% each, Robert Peugeot and RainerMarc Frey also joined our Board of Directors. For DKSH, the additional expertise that the new members bring to the Board is very valuable and will help us to continue our impressive success story.

Our Board of Directors. Front row, from left to right: Andreas W. Keller, Jean-Daniel de Schaller, Dr. Joerg W. Wolle, Robert Peugeot. Back row, from left to right: Dr. Theo Siegert, Rainer-Marc Frey, Adrian T. Keller, Dr. Rolf A. Meyer.

8


For DKSH, the additional expertise that the new members bring to the Board is very valuable and will help us to continue our impressive success story. Three questions to Robert Peugeot and Rainer-Marc Frey

Why did you become a member of the Board of Directors of DKSH? Robert Peugeot: Sitting on the Board of Directors of DKSH is part of our strategy as long-term shareholders of the company. I am convinced that it is the best way to take part in decision-making and it appeared quite natural after taking a 11% stake in DKSH. Rainer-Marc Frey: I am an entrepreneur in the financial services field and have been investing in Asian markets for more than 20 years. Hence I have a long-standing and strong interest in this region. When the opportunity arose to invest in DKSH as the market leader for expansion services in the region, it struck me as a very interesting opportunity. As an entrepreneur I invest my time where I invest my money and when I got offered the opportunity to also serve on the Board of Directors of DKSH, I happily accepted.

Which of your strengths and skills can you bring to bear in your new position? Rainer-Marc Frey: I can provide input from both an entrepreneurial as well as a financial perspective. Though the range of DKSH services are new to me, the general concept and challenges with growth organizations are very familiar. As a global investor I have a very detailed knowledge on the workings of the financial markets. With my expertise, I can assist management in realizing further synergies and optimizing the current successful strategy. Robert Peugeot: I believe I can bring in the industrial expertise gained at various positions within the PSA group. Another benefit is the solid French and international experience

Robert Peugeot, Chairman FFP Group.

Rainer-Marc Frey, Founder and Chairman of the Board of Directors of Horizon21.

Born in France in 1950, Robert Peugeot studied at the École Centrale in Paris before gaining an MBA at INSEAD (France). He is a member and/or Chairman of a number of Boards, including those of FCC, IMerys, Hermès International, Zodiac and Sanef. Since 2002, Peugeot has been President and CEO of FFP, and in February 2007 joined the Supervisory Board of PSA Peugeot Citroën.

Rainer-Marc Frey was born in Switzerland in 1963 and graduated in Business Studies at the University of St. Gallen. In 1992, he founded the RMF Investment Group, offering alternative investment products. Selling RMF to the Man Group in 2002 created the largest provider of hedge fund products in the world. Today, Frey is active as the founder and Chairman of Horizon21, a globally active investment company.

from our involvement in the companies we invest in, especially family-held companies.

Rainer-Marc Frey: I am very happy to be part of the DKSH family. My wish is that DKSH, as a market leader in a very strong position, can take advantage of the upcoming challenges in the global economy.

Make a wish for DKSH’s future. Robert Peugeot: I am very confident in DKSH’s future and my wish is that DKSH can help more and more companies to capitalize on the growth in the markets it covers. If I can make a specific wish concerning my own country, I would say that I am eager to see more French companies developing strongly thanks to DKSH!

Anne-Catherine Rüegg Communications Manager DKSH Management Ltd. Switzerland

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GROUP NEWS

Step by step, creating a unique face for DKSH

Our new trade fair design makes its professional debut in Frankfurt and Paris – and our new Corporate Wear will have its coming out next spring. Step by step, our new Corporate Design is creating a global and consistent look and feel, shaping the DKSH landscape around us wherever we are. Coming together like a global puzzle, connecting all communications activities and interlinking them thus adding to our identity and giving us that distinct DKSH face that sticks out from the crowd. In the last edition of Fantree News, we looked at what is currently in the making as regards to guidelines and what is to be expected next. One new achievement we mentioned and that we are proud to feature here is our new trade fair design. The new look was premiered at the world’s largest pharma ingredients and services exhibition, the CPhI in Frankfurt. Performance Materials Business Line Pharmaceutical Industry, headed by Hansjoerg Jakubetz, was the first to implement the new design, and very successfully too. But time did not stand still – four weeks later, at the beginning of November, the Business

Line Food & Beverage Industry, headed by John Römling, took part in the Health Ingredients trade fair in Paris. Another good way of creating a DKSH world for our business partners and our employees is the newly developed Interior Design. This brings a whole new experience to our clients and customers and everyone who visits DKSH locations around the globe or does business with us. Often enough, this is the first contact with our partners and it should take place in friendly and open-minded surroundings. We should be instantly recognized as DKSH, no matter where people walk through the door, mirroring our competence as a strong, professional and reliable partner with global resources. Our new Corporate Wear – another major piece of the puzzle – not only demonstrates unity and belonging to a large global company, but also makes a strong statement about being the number one Market Expansion Services provider worldwide. Naturally, this means that we should introduce Corporate Wear whenever possible, especially in situations where there is frequent business partner contact. In the first phase, Thailand will

New element for co-branding communication with business partners: the DKSH label.

New Corporate Wear.

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New booth at the CPhI in Frankfurt.

serve as a pilot and we will focus on the core pieces of the collection. Progress on the project has been good and we will be able to start implementing our Corporate Wear as of spring 2009. To ensure a strong brand whenever possible, while at the same time protecting it from being misrepresented and diluted, we have developed co-branding guidelines that will help our professionals and management when featuring client products or e.g. negotiating a new joint venture or acquisition. This is a new and confident approach in communicating at eye level with our business partners. We live in a fast-moving business-to-business world, where brands only have a chance of surviving if they cultivate clear and direct communications and use given channels in a responsible and strategic manner. Frank-Stephan Johne Brand Manager DKSH Management Ltd. Switzerland


Bringing value propositions to life

Our branding project goes one step further. Together with the management teams, value propositions (VPs) have been worked out for all Business Units (BUs) and are now being turned into tangible communication material. The purpose of developing VPs was to break down the corporate brand strategy at BU level, thereby creating positionings and message frameworks for all BUs that fit and reflect the DKSH brand strategy. The result is a communication concept for each BU, a valuable tool for better communication for our businesses. VPs are about the experiences a brand promises and the resulting benefits for customers and clients. Our BU VPs have been developed in collaboration with the respective management teams. They are based on interviews with many stakeholders and consist of four elements: a promise, benefits, key messages and reasons to believe. The promise describes the pledge that the BU makes to clients and customers. The benefits define what clients and customers gain from working with a BU if it delivers on its promise. The

key messages and reasons to believe link the benefits with the promise and prove that the BUs deliver what they pledge. To make the VPs tangible, they are now being translated into hands-on communication materials. To effectively brief communication agencies and internal brand users on our brand identity and the related BU VPs, Corporate Communications has developed so-called value proposition briefings for each BU. The implementation of the VPs will affect many areas, since we need to bring them alive at all different touch points, such as service offerings and staff behavior. Communication is just one way to implement the VPs on a day-to-day performance level, since only when performance and VPs are fully aligned will outside stakeholders recognize the promises our brand makes. Good examples of how VPs can be implemented into tangible communications materials have already been finalized: for Performance Materials, a Business Unit as well as two Business Line brochures and PowerPoint presentations for BU management to communicate our brand and the VPs internally. The BU brochures serve as both first and follow-up

medium and cater to new and potential clients and customers, presenting our brand, the concept of Market Expansion Services and an attractive overview of the respective BU, its Business Lines, industry clusters and services. The BU key messages and reasons to believe are carefully integrated in the brochures. However, it is important to know that they are not literally in there, but need to be translated into other expressions that reflect the key messages and reasons to believe. At the moment, other implementation tools are being developed, such as brand posters and VP booklets that provide short descriptions of the BUs and DKSH, as well as answers to frequently asked questions. At the end of the day, all employees should be familiar with the BU VPs to ensure we all speak with one voice, thereby strengthening our brand and making both DKSH and our category better known in our markets. Anne-Catherine R端egg Communications Manager DKSH Management Ltd. Switzerland

Elements of a BU value proposition Promise

Benefits Benefit 1

Benefit 2

Benefit 3

Key Messages Message Theme 1

Message Theme 2

Message Theme 3

Reasons to Believe Company

Process

People

Products

A value proposition consists of a promise (not to be literally communicated), benefits (not to be literally communicated), key messages (crucial elements to be emphasized in communications to link promise and benefits) as well as reasons to believe (proof points such as activities, success stories and capabilities).

The first BU brochure completed on the basis of the VPs.

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GROUP NEWS

GO! for continued success

A Brand Champion is not only a brand ambassador, but more importantly a brand guardian as well. In the kickoff workshop in Zurich last year, the Brand Champions acquainted themselves with the brand strategy and various tools for the implementation of the new corporate design. This was their main task in the last 12 months. One year on, the Brand Champions met again to spend four days learning and training to gain more knowledge and confidence for future tasks. The second Brand Champion Workshop took place in Walzenhausen, a beautiful Swiss village in the Appenzell region, with a fantastic view of the mountains, Lake Constance and the Rhine valley with its magnificent autumn colors. The workshop started with a review of the most important milestones during

the last year. To share their experiences over the last twelve months, five Brand Champions, Darrell Tseng, Stephanie Pan, Rahel Kaegi, Kultida Leenbanchong and Bee Ping Lim presented their best practices. They showed some exceptional and successful events or accomplishments in their country or region, such as the Brand Book kick-off event in Taiwan, the enewsletter in China, the various brand training workshops in Japan, the Thai version of the electronic Brand Book and the new interior design for the Finance Center in Singapore. Since last October, the Brand Champions have been making great efforts to implement the new Corporate Design Guidelines. For the future, the role of Brand Champions will be extended. Not only pure Brand Design implementation, but also integrated communications should be carried out by Brand Champions. Martina Ludescher, Vice President

The Brand Champions and the Brand Team in the beautiful Swiss landscape.

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Strategy & Corporate Communications, introduced the first written communication strategy to the Brand Champions. To familiarize themselves with the new tool for daily communication tasks, the Communication Strategy Handbook, they worked in groups on different topics. Furthermore, our Brand Manager, FrankStephan Johne, presented the new concepts of Corporate Wear, Interior Design and Trade Fair, as well as the guidelines for Co-branding. The Brand Team had developed a fun element for getting to know the DKSH Brand, the Brand Quiz. All Brand Champions took up the challenge. After answering all 30 questions correctly, they received a certificate and an attractive prize of Swiss chocolate! The quiz is accessible for every DKSH employee on the Brand Portal: http://brandportal.dksh.com. One evening, our President & CEO, Dr. Joerg Wolle, and our Chairman, Adrian T.


For the future, the role of Brand Champions will be extended. Not only pure Brand Design implementation, but also integrated communications should be carried out by Brand Champions. Keller, invited all participants for a delicious dinner and thanked them for their strong support in implementing the branding projects over the last 12 months. In order to better appreciate DKSH’s Swiss roots, after the seminar the Brand Champions had the opportunity to enjoy the beautiful scenery in the region and taste the famous Appenzell cheese. The four-day workshop equipped the Brand Champions with greater knowledge and a clearer vision of the tasks ahead, inspiring the whole group to look forward to the challenges of the future.

Cheers! Dr. Joerg Wolle, President & CEO, and Adrian T. Keller, Chairman of DKSH, greet the Brand Champions.

Lin Dou Junior Communications Specialist DKSH Management Ltd. Switzerland

Test your Brand IQ! The Brand Champions concentrate on the Brand Quiz.

Rahel Kaegi Corporate Communications Officer Nihon SiberHegner K.K., Japan

Darrell Tseng Corporate Communications Specialist DKSH Taiwan Ltd.

Kultida Leenabanchong Corporate Communications Manager Diethelm Limited, Thailand

What was the most challenging moment in the last twelve months as a Brand Champion?

Giving the presentation about the DKSH Brand Identity in front of 70 Business Unit Consumer Goods staff – all in polite Japanese. I really trained hard for that.

What was the most challenging moment in the last twelve months as a Brand Champion?

Going through the persuasion process with the local management team. For the whole organization and local Business Units, it is a new experience to switch from the old brand to the new identity and concept. I always prefer having a good discussion and two-way communication before I deliver the branding message and tasks.

What was the most challenging moment in the last twelve months as a Brand Champion?

I had to conduct six separate training sessions with four Business Units. Each session required a new approach in sending out our branding messages, since the audience consisted of people from different Business Units with different needs.

Which message(s) will you take home from this workshop?

The branding project is sweeping across the DKSH countries. There is new signage, new interior design, new booths already in other countries and Japan is on track too. I will endeavor to keep it that way.

Which message(s) will you take home from this workshop?

Which message(s) will you take home from this workshop?

Branding is directly linked with driving the business. With our good brand name and support, our business momentum will continue to increase and we will be able to generate more profit.

What will be your first operation as a Brand Champion when you return to your office after this workshop?

I will inform all parties concerned of coming changes, e.g. Human Resources about the new marketing materials or BU Technology and Performance Materials about how their new exhibition booths should look.

The main message from the workshop is that the role of BC now includes the communication strategy. Since the Brand Team and ourselves have prepared the ground for implementing the brand project, we have to start integrating the external communication for 2009 in terms of delivering Business Units’ and Business Lines’ value propositions.

What will be your first operation as a Brand Champion when you return to your office after this workshop?

The first thing is to report to the Head of Country Management Team on what we’ve learned in this workshop and then discuss with them the budget, customization into local culture, time frame and branding goal for the coming year.

What will be your first operation as a Brand Champion when you return to your office after this workshop?

Reporting to the management team. It is crucial for me to ensure that the local management team gets the same message and understands sufficiently the current status of the project, as well as the future plan.

13


GROUP NEWS

DKSH in Person – Somboon Prasitjutrakul, our Executive Vice President, Business Unit Consumer Goods “Together, we are strong.” “The primary target is to make sure our people work happily” – the Fantree News interview reveals the person who stands behind this philosophy of life. How would you describe DKSH’s business in three sentences? Our company creates value for our suppliers and customers. We help our business partners to grow their businesses with our expertise, knowledge and competencies. Their growth is also our growth. And this can only be achieved through a real partnership: “Together, we grow”.

Somboon Prasitjutrakul: “I am like the captain of a big ship.”

Describe the position you hold in the company. I am like the captain of a big ship. The ship cannot just wait for wind to carry it to its destination. It is everyone’s effort to get the ship moving forward no matter what turbulence we face: “Together, we get there”. I also wear three hats: I am President of our Thailand operation (HCMT), Local Business Unit Head of Consumer Goods Thailand, Fast Moving Consumer Good (FMCG) and Levi’s, and Global Business Unit Head of FMCG.

14

Basically, my role is to drive my team members’ capacity to the maximum. I work with people and they need the right environment, tools, motivation, direction and support. I also make sure each individual performance contributes to the overall company objectives. How did you join DKSH and why? I worked for Ciba-Geigy (today Novartis) for whom DKSH served as distributor. My performance there was noticed by Renato Petruzzi, DKSH’s Healthcare and Country Head at the time. He felt that I was a “consumer man”, because I had worked in the consumer industry before moving into healthcare and I wanted eventually to go back to the consumer field. He asked me to let him know if I ever decided to leave CibaGeigy, which I then did. He convinced me to come to DKSH. I decided to take up the offer because I felt the job was interesting and challenging, managing the sales team and suppliers. Although I found it difficult to switch roles from the supplier to the distributor side, I have never regretted my decision. I have learnt a lot from this organization in all aspects of its business, something that other companies cannot offer. I think the most valuable asset I have acquired is dealing with people. It is great fun to meet many kinds of people, be involved in different industries and be faced with a never-ending variety of colorful challenges. What targets have you set yourself for the next months? My primary target is always to make sure our people work happily at DKSH. Once they enjoy what they do, we will as a result achieve our financial and suppliers’ sales targets: “Together, we make money”. What can your staff expect from you? They expect clear guidance and direction to be able to deliver their performance. They expect fair treatment. They want their work to be recognized, they want to be proud of their achievement and to be part of a successful company.

They would like to hear about the company direction and how they can contribute to the roadmap. What do you value about your staff? I see my staff as colleagues and friends. I have never looked at them as my subordinates. I listen to them and value and respect their opinions. I don’t like to have a “boss relationship”. That would distance me from my team members. We work as a team. Their performance is my performance. No matter whether in good times or in bad, we share the same feeling: “Together, we succeed”. A word from the wise: How would you describe your style of management? I manage my team on an open, sincere and fair basis. I don’t believe in yearly appraisals. I prefer to provide my team members with immediate feedback, then they know where they stand and can learn right away. I don’t believe in correcting people’s weaknesses, but rather in reinforcing their strengths. Like a golfer, I can hit the ball straight but short, and I’m not very good in bunkers. I will practice my swing to hit the ball straight rather than to get the ball out of bunkers. This reduces the chance of hitting the ball into a bunker. Believe me, we are too old to change: “Together, we are strong”. What drives you? When I started my career, I worked on my own. There were either no or just a few assistants. New assignments, new product launches and other new challenges drove me. It was fun to learn and beat new targets. Today, however, I have many team members. What drives me is their success. I would like to see the trees that I cultivated grow, blossom and bear fruit. That would make me very happy. Name one book that has especially impressed you. I like a book called “Horse Sense” by marketing gurus Jack Trout and Al Ries. It talks about the fact that, in life, we are influenced and shaped by the friends,


What drives me is my team members’ success. I like to see trees that I cultivated grow, expand, blossom and produce. Then I am very happy. spouses, job, company, mentor etc. that we choose. These are the factors that dictate your success or failure in life. The key to success is finding the right horse to ride. We have to learn to make the right choices. We have to have “horse sense”. What do you really dislike? I don’t like people who take advantage of others or who are dishonest. When I recruit my team members, I look for honest people. Honesty comes first. No matter how good the candidate is, I will not bring the person in if he or she is not straightforward. And I hate cats. I was bitten by a cat on the school bus when a boy behind me stepped on its tail. I have never forgotten this incident. However, I have no problems with people named “Maew”, which means “cat” in Thai. What advice would you give a young colleague just starting his career? When you’re starting out, you have to be patient, work hard and diligently. It is the beginning of a journey to reap knowledge and gain experience. As the saying goes: no pain, no gain. Nothing comes for free, you have to work for it. The important thing is patience. Imagine yourself as a small tree in a small pot. You have to put down roots, settle and expand. Later on, the tree will need a larger pot to grow bigger. The trick is to choose the right pot to be in.

Nothing is impossible for Somboon Prasitjutrakul. He even played a role in the Ray-Ban promotion.

Anne-Catherine Rüegg Communications Manager DKSH Management Ltd. Switzerland

Internal Trainer (BU?)

Introducing the DKSH Brand Identity to the Thailand executives.

Somboon patiently answering questions at the opening of the Makro-Diethelm Fair at the Siam Makro store.

Somboon Prasitjutrakul at the Ray-Ban event with an optician.

15


GROUP NEWS

Moving the Corporate Finance function closer to our operations Due to the relocation of certain Finance functions to Singapore, it was decided to set up the Singapore Finance Center, which was officially inaugurated in August by DKSH’s Chairman, CEO and CFO. In this article, we will focus on the branding aspect of the Singapore Finance Center, while in the next issue we will look at the reasons why certain Finance functions were relocated and how staff have settled down in their new surroundings. The construction of the Singapore Finance Center attracted a lot of attention from Corporate Head Office. As more DKSH offices around the globe start making similar plans, learning from the Singapore Center may act as a reference for the “look and feel” of the DKSH brand. A Singapore-based interior design company, DesignHub, was tasked with the makeover. Cooperating closely with the local DKSH Brand Champion, Bee Ping Lim, and using the guidelines for interior design set out by the Brand Team in Zurich, the team worked to a tight

deadline to meet the opening date in August 2008. The guidelines provided by the Brand Team were comprehensive and included approved color schemes, carpets, office table and chair designs, signage and lighting. At every step of the work, the Brand Team was consulted to ensure compliance with the guidelines or get exceptions approved. The end result is an office that projects the corporate DKSH image. Staff reacted positively as they settled into their new surroundings. The Finance Center is situated in United Square, in the heart of the central district of Singapore, and it houses the DKSH Chief Financial Officer (CFO), the Business Unit Controlling, Treasury and Tax functions and the Internal Audit department. The relocation has been decided in order to further reinforce the Business Unit approach to management, to move activities of the Corporate team closer to our operations and to Country finance teams and to speed up the decision support process. On August 20, 2008, the Center was officially inaugurated by Stuart Davy, CFO, Dr. Joerg Wolle, President & CEO, and

Adrian T. Keller, Chairman of DKSH Group. In line with the local Chinese custom, a lion dance troupe was engaged to endow the event with good luck. It is believed that having the lion dance performed at office openings brings good fortune and wealth. The dance was a feast for the eyes and everyone enjoyed it. The executives of DKSH Holding Ltd. did the honors of cutting the red ribbon and the celebration was attended by many guests from Diethelm Singapore, like Leonard Tan, HCMT Singapore, Andreas Wuest, Country Finance Manager, Pauline Teo, Country Human Resources Manager, and Bee Ping Lim, Business Manager, Projects and local Brand Champion, as well as the Country Finance Managers from Asia who were at the office to attend a controllers’ meeting. Katherine Chia Executive Assistant to CFO DKSH Management Pte. Ltd., Singapore

The reception of the Singapore Finance Center.

Cutting the ribbon at the official opening of the Singapore Finance Center. From left: Adrian T. Keller, Chairman, Stuart Davy, CFO, and Dr. Joerg Wolle, President & CEO of DKSH Holding Ltd.

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Daniel Lustenberger, Head Group Internal Audit, Stuart Davy, CFO, and Roger Schnueriger, Vice President Group Treasurer, with the lions’ "blessing".


ICS – looking beyond a successful roll-out

Over the past one and a half years, DKSH has prepared Internal Control documentation for a significant portion of its main country and Business Unit organizations. In the last few months, we have also gone through parts of the first year Internal Control Systems (ICS) audits by the external auditors PricewaterhouseCoopers. But what lies ahead and what longterm value can be derived from this legally required project? In previous Fantree News articles, we have highlighted the legal requirements of the ICS project, the progress made, the operations covered and the preparations undertaken in order to ensure a successful first year ICS certification. By the time this article is published, you may yourself have been part of this process, most recently maybe in the ICS audit. Having prepared well and having gradually towards the end of 2008 also coordinated an Internal Audit follow-up on the Internal Control documentation established during the ICS projects, we are confident that we will look back on the first year of the ICS project as a success. However, much of this success will also depend on the ability to maintain a current and well-documented Internal

Control System for the longer term and extract business value beyond the legal and audit requirements. Deploying a sustainable, effective and value-adding compliance process remains our overall goal. Ensuring that these objectives are constantly reached, management at all levels will frequently emphasize and demonstrate the “tone-at-the-top”, the importance of keeping Internal Controls up-todate by continuously optimizing and aligning them when changes in the business occur. 2009 will bring additionally strengthened interfaces between the Group Risk Management processes and Internal Controls. A roll-out of a risk management process throughout the Group, starting top-down, with monitored and measured mitigation of key risk areas will drive this process (see Box 1). Other focus areas will be on further control improvements, control self-assessments, benchmarking of controls amongst DKSH organizations, and last but not least a focus on Internal Controls embedded in our IT systems. The latter will mean better utilization of IT controls, rather than relying on less efficient manual controls which are prone to exceptions.

Leveraging on ICS ICS optimization and alignment efforts

Enterprise Risk Management New legal standards require the Board to conduct a formal risk assessment. The value of regular proactive risk management processes, which in some cases also allow us to turn risks into opportunities, is not new to DKSH and has existed for some time. In 2008, we have fostered this process and established some best practices in risk management together with our consultants at Ernst & Young. The focus will be on providing top management with real life risk cockpits on a regular basis, so that risks can be proactively managed and strategies effectively executed. John Clare Director Operational Risk and Control DKSH Hong Kong Ltd.

Internal Audit – ensuring the maintenance of a strong Internal Control System Internal Audit will also be integrating ICS reviews into the audit plan for 2009 and beyond. The main focus will be on ensuring that documentation is current, employees have complied with the respective controls and identified control weaknesses are addressed accurately and in time. A continuous focus on ICS by management, process owners, and Internal Audit will also allow DKSH to capitalize on ICS and SAP. Daniel Lustenberger Head Group Internal Audit DKSH Management Pte. Ltd., Singapore

Continuous improvement John Clare

Management and process owner

Director Operational Risk and Control DKSH Hong Kong Ltd.

Risk assessment

Up-to-date ICS documentation

Evidence of key control execution

Remediation

ICS reporting

Alignment

and

and

and

and

and

and

Scoping

Evaluation control design (walkthroughs)

Testing operating effectiveness

Up-to-date ICS dashboard

ICS communication

Sustainability

Daniel Lustenberger Head Group Internal Audit DKSH Management Pte. Ltd., Singapore

Internal audit – selective procedures to foster quality and progress A sustainable ICS requires a transition from a “one-time-project” into a mode in which compliance is well-integrated into DKSH’s daily operations. Success will require a focused, up-to-date approach designed to operate year after year as a natural part of the business.

17


GROUP NEWS

A bold decision pays off

In almost five years, DKSH’s Corporate Shared Services Center (CSSC) has achieved notable goals. Our IT costs are so low that we now serve as a benchmark and are visited by leading multinational companies. Less than five years ago, I bounced the idea of setting up a Corporate Shared Services Center around with our CEO, Dr. Joerg Wolle and our Chairman, Adrian T. Keller. Both agreed with my reasoning and embraced the project immediately. We decided to standardize all our business processes leveraging on SAP for the enterprise resource planning (ERP) and centralize all IT solutions such as email and network. In addition, we planned to set up a central Corporate Shared Services Center (CSSC) to start on a green field in Malaysia and build up a completely new central IT team. By far the toughest part of setting up CSSC was the initial two years: A core team of highly ambitious and eager IT managers had to be formed, IT specialists recruited and a location found. Numerous purchases needed to be professionally managed with strategic vendors such as SAP, IBM and Infonet. Moreover, numerous permits and tax rulings had to be obtained.

To sum up our progress so far, CSSC has become a global reference site for SAP and IBM and of course for our other vendors. We have been profiled in numerous magazines and newspapers. Multinational companies and leading audit and IT consultants have been visiting CSSC to learn from us. In terms of having the lowest cost per user of SAP, we are among the top 5% and have become a benchmark. I even had the honor to present our case to the Chairman and Executive Board of SAP and their top global 50 customers, represented by their CIOs, at the exclusive annual SAP event MaxAttention Summit in August 2008. In addition, CSSC is now officially one of the few lighthouse customers for SAP in Asia. Our business model has become scalable and our IT completely transparent. We have developed our own business solutions, which are not only used internally, but also by several other Fortune 500 companies. Finally, thanks to CSSC’s centralized infrastructure and Pegasus, we can embark efficiently on important projects such as ICS (Internal Control System). When you read the contributions of some of the key managers of CSSC, you will readily appreciate the numerous challenges and sleepless nights we faced be-

fore optimal solutions were found and deadlines met. We are on track to meet the objectives which triggered the creation of CSSC, but a huge amount of work still lies ahead. As my colleagues state overleaf, we need to maximize the benefits of our SAP, capitalize still further on Lotus Notes as a collaboration tool and turn our self-developed business solutions into “Power Tools”. Pegasus Wave 2, namely introducing additional global solutions based on or around SAP, such as Global Web Ordering, will result in additional tools, but also means that existing solutions need to be simplified and standardized even further. Service levels need to be refined and monitored and CSSC should become more customercentric. Resolutions of tickets and issues need to be speeded up and simplified and communication with the countries and Business Units strengthened. In short, we have to ensure that IT truly becomes a competitive advantage for us.

Gonpo Tsering, Senior Executive Vice President, Operations and Business Support, was invited to speak at the SAP MaxAttention Summit 2008.

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Gonpo Tsering Senior Executive Vice President Operations and Business Support DKSH Holding Ltd. Switzerland


Made for business by business Global Business Solutions (GBS) combines IT technical skills, knowledge and strong business-oriented specialists in a team of enthusiastic and fully motivated, experienced young graduates. With the creative and innovative steps of Research and Development (R&D), the GBS team provides extensive end-to-end business solutions and core services. They develop and deliver web and desktop applications, homegrown Mobile Customer Relationship Management and EchoPlus. The team is also actively involved in the global Pegasus rollout to deliver complementary sub-systems to fulfill local country needs and enhancing local sub-systems to meet Pegasus compliance standards. In addition, GBS will continue utilizing state-of-the-art technology to evolve, test, deploy and prove its ability to adapt to the changing business environment and ensure delivery by highly skilled consultants.

Into a new era The two SAP applications used by DKSH, the Enterprise Resource Planning (ERP) and the Business Warehouse (BW), are not the latest releases. However, ERP is the largest global template in the supply chain industry run by one client, and the way DKSH uses BW is unique worldwide. Now that the processes have largely been harmonized, it is time to utilize the system to the maximum in order to achieve real gains in efficiency. At the same time, continuous business improvement together with system maintenance and support is in place. This enables new and supports changed business requirements to be reflected in adequate SAP solutions, embedded and based on the existing global template. Our roadmap to upgrade SAP ERP and BW is planned for 2010 to 2012. It will offer the opportunity to not only further finetune existing business processes, but will also enable the DKSH business to enter a new era of systems and solutions.

More than 5,000 users The IT Infrastructure (ITI) division comprises the following teams: SAP basis and authorization, technical systems and data center operations, network, desktop management and IT security. The teams consist of dedicated professionals working on the right IT infrastructures to host DKSH corporate-wide IT applications and providing demanding service levels, as well as covering standardized IT infrastructure deployment throughout DKSH offices. Since the start of CSSC, ITI has accomplished milestones such as hosting more than 5,000 users and connecting all core countries via Infonet. The roadmap for the next two years will be to continue with the high standards already set. The following projects are planned: scaling the CSSC IT hosting infrastructure to support an aggressive growth strategy and improving the current standardized desktop environment for better ease of use, as well as strengthening the CSSC country IT working model.

Lau Kah Chin Head Global Business Solutions DKSH Corporate Shared Services Center

Donabet Donikian Global SAP Project Manager DKSH Corporate Shared Services Center

Tony Woo General Manager Global IT Infrastructure DKSH Corporate Shared Services Center

Final roll-out in Australia The Team Program Management Office was initiated to focus on the roll-outs of Pegasus, the DKSH global template, covering 18 DKSH countries in two and a half years. Malaysia volunteered to be the pilot country and started in August 2005. The subsequent Pegasus roll-out road map was created based on this pilot. While Malaysia was busy piloting, selected countries started preparations or initialized their own Pegasus project. During the last few months, we have been preparing four more countries to go live: Norway, the Netherlands, Korea and Australia in 2009, and we are now concentrating on the remaining countries. In summary, the roll-outs have been challenging, at times like riding a roller coaster, but, when we look back, they have been fruitful journeys during which we gained insights into many different country business environments.

International data quality DKSH DataCare Technologies (DataCare) is a subsidiary of DKSH CSSC. It has been set up as an internal arm to manage its data quality measures by means of internal and externally sourced applications. DataCare provides its customers with solutions in the form of services and software implementation. This department is building up a good reputation as it strives to fulfill its mission to be “the provider of the best international data quality solutions, tuned to local needs, supported by comprehensive knowledge”. DataCare has so far been involved in more than eight projects. This is a remarkable feat when you consider that it is a “start-up” business with less than one year of operation. From the beginning, DataCare has acquired customers from a variety of industries, including media, postal, financial services and telecommunications which will help cement and secure future partnerships.

New look for Lotus Notes The Lotus Notes (LN) team specializes in helping improve productivity by providing the right tools for business. For those always on the go, we also provide push mail solutions on Blackberry devices. For advanced communication and collaboration, we provide Sametime for instant messaging and e-meetings. DKSH employees can also work in virtual teams by utilizing team rooms for project planning and discussion forums. To streamline business processes, we have developed various workflow applications to improve business operations to ensure compliance, consistency and transparency throughout the business flow. Our focus for 2009 is on upgrading existing LN Domino to version eight, the development of more applications tightly integrated in SAP and Blackberry and redesigning the global address book.

Chow Yoke Chee Global Roll-out Manager DKSH Corporate Shared Services Center

Simon Chin Director Sales DKSH DataCare Technologies

Evelyn SM Ooi Head Lotus Notes and e-Collaboration DKSH Corporate Shared Services Center

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CONSUMER GOODS

DKSH and Procter & Gamble: a long-standing partnership throughout the world DKSH has supported Procter & Gamble with Market Expansion Services for many years. Now, the partnership has been taken to a new level with regard to pet food in Taiwan and the Netherlands, and Vicks in Singapore. Taiwan is one of the leading markets for pet food in Asia. DKSH sets a good example by bringing the new product line of Eukanuba into the local market and helps pet lovers to treat their dogs better. Pet food has always been one of the hottest products in Taiwan, where there are many pet owners eager to find healthy food or nutrients on the shelves of the numerous fancy pet shops. Eukanuba, one of the brands of Procter & Gamble Pet Care, has monitored the maturity and development of the Taiwan market for

years. On the basis of these observations, Eukanuba decided to enter the Taiwan market with its new dog food product at the beginning of this year and worked with DKSH Taiwan to manage the task. The new products are not only normal dog foods, but also contain customized formulas to meet the needs of different breeds. Although these are new products and have few competitors in the Taiwan market, it is still a challenge to introduce them to discriminating customers who want to give their pets the best products. As DKSH Taiwan has provided full service for Eukanuba & IAMS products since 2003, it was chosen by Procter & Gamble Pet Care to pioneer the Taiwan market this year with Breeds Specific. DKSH first decided to launch Breeds Specific for lab-

rador retrievers, German shepherds, Yorkshire terriers, boxers and dachshunds. These five products not only cover the needs for most sizes and physiques, but also the most popular breeds with Taiwan pet owners. The official launch was in February 2008. In the meantime, Internet activities were accompanied by special discounts in the first three months. DKSH Taiwan started by supporting the top 100 stores with tailor-made displays and other sales incentives. The result of the launch campaign was very positive: within five months, points of sales were rapidly expanded from 100 to 400 stores. Rebecca Liu, Marketing Executive of FMCG Taiwan, said: “The pet food market has reached a new level. Owners treat their pets as family members, as human beings. They care about their food just like their own; they are interested in information on how to give their pets the best. Pet shops nowadays must have a wide enough range of products to fulfill end-users’ needs and create pleasant shopping areas and atmospheres for pet lovers.”

Darrell Tseng Corporate Communications Specialist DKSH Taiwan Ltd.

The FMCG Taiwan sales team responsible for Eukanuba products.

One of the large pet food stores in Taiwan with a wide variety of products.

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A tailor-made display for Eukanuba Breeds Specific products in a pet food store.


The peak of strategic partnership The affiliation between Procter & Gamble and Diethelm Singapore has risen to a new level, with Diethelm becoming exclusive distributor for many global brands. With Procter & Gamble (P&G) business, namely Vicks Vapour Drops, DKSH in Singapore has taken the market by storm. We brought the “unseeded” business to the eighth position in merely ten months in the functional confectionery category in Singapore. In 2007, in an annex to the business alliance, we gained a second product category, Vicks Rub & Inhaler, and took the Vicks business to a new high. Both business partners recognized that this astonishing result was due to their good collaboration. Inspired by this success, the two companies kicked off a strategic extension plan for some of their

Fine-tuning dog and cat food in Europe The nearly ten year-old partnership with Procter & Gamble successfully continues in the Netherlands. Thanks to DKSH, Eukanuba has become the number one dog food brand. For many years, DKSH Netherlands has had a successful partnership with Procter & Gamble, providing the local marketing, sales and distribution of the premium cat and dog food brands Iams and Eukanuba. It all started in 1987. Iams, at that time a private-owned company, was expanding their business from the USA and looking for local distributors. DKSH Netherlands was chosen because of their knowledge of the local market, excellent logistics and good reputation. Nine years ago, Iams was bought by Procter & Gamble and the relationship with DKSH became a long-term contract. After several years of strong growth, DKSH and Procter & Gamble decided to form a separate Iams division within the DKSH sales organization with a clear fo-

brand portfolios early this year. Six months ago, the finalization of our collaboration with P&G heralded a new partnership. We were appointed exclusive distributor for globally acclaimed brands such as Pampers, Tampax, Tide, Vidal Sassoon, Camy, Joy, Dawn and Ivory. Building on this renewed partnership, P&G invited 30 members of our staff to their office for a day of product training conducted by Ramon Gloria, P&G Business Development Manager, and his team. The partnership between DKSH in Singapore and P&G has been a great success for both companies: a relationship that is a true testament to Market Expansion Services and one positively influenced by participation, communication, information sharing and top management support. This alliance between DKSH in Singapore and P&G does not

just represent a pledge to the continuity of their business relationship, but a promise to help take businesses from strength to strength in the years to come.

cus on the Iams and Eukanuba brands. The reason behind this strategic decision was to capitalize on the success and make further growth possible. Currently, DKSH Netherlands is fifth in terms of volume in Europe, while in the Netherlands Eukanuba is the number one premium dog food brand. The Procter & Gamble Geneva headquarters is responsible for European brand marketing. In close cooperation with the business development team of Procter & Gamble, the Iams and Eukanuba team at DKSH Netherlands develops all local plans based on the annual master plan. All consumer questions for Europe are handled centrally at the Eukanuba customer care center in Newcastle, UK. The DKSH Iams division has 21 people working in marketing and sales. The Dutch market contains 1,200 pet shops and garden centers, 4,000 active breeders and 1,200 veterinary clinics. Over recent years, growth has been driven by innovation. Since 2005, Iams and Eukanuba have expanded their product portfolio with new product lines such as Eukanuba Daily Care for healthy dogs al-

lergic to certain ingredients, and Eukanuba Breed, with products like Eukanuba Wild Nature, Iams Cat pouch, Iams Multi Cat for multi-cat households, Iams Special Care and Iams Nature Wellness.

The P&G product range that Diethelm Singapore will be representing.

Jane Lee Senior Business Manager Business Unit Consumer Goods Diethelm Singapore Pte. Ltd.

“Make a good dog great”: Eukanuba’s specific product line Wild Nature at a trade fair.

Rik Boelee Director Iams & Eukanuba Business Unit Consumer Goods DKSH Netherlands B.V.

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CONSUMER GOODS

Successful partnerships in Thailand: Nestlé, Wyeth and Kraft New commitments signed with DKSH will continue prosperous partnerships for brands like KITKAT, MILO, Wyeth and Kraft biscuits and chocolate. The partnership between DKSH and Nestlé Confectionery is now in its third year and the achievements in that time have been impressive. Sales have risen by 150% and both sides are confident of continued growth opportunities in the years to come. DKSH and Nestlé Confectionery have been cooperating in Thailand based on a business model whereby Nestlé’s focus is on manufacturing and marketing, whilst DKSH is responsible for all trade, sales, logistics and back office activities. The chocolate market in Thailand is still fairly undeveloped with relatively low per capita consumption compared to other countries in the region. We have, however, seen a positive development over the years, as industry players have started to invest in above-the-line activities. Nestlé Confectionery, with its flag-

Andrew Cooper of Nestlé Confectionery reviewing samples of checkout counter merchandising in the Thai market.

ship brands KITKAT and MILO, has been a very dominant and successful participant in the category and the growth rate speaks for the success which has been achieved in recent years.

Kwanchai Assanee Senior Department Manager Business Unit Consumer Goods Diethelm Ltd., Thailand

A KITKAT floor display.

Our partnership with Diethelm/DKSH is a great example of win-win of thinking from both management teams. Both parties see the benefits that come from working together. Therefore, when we invariably strike issues in business, it is always how we can move on to driving the business to another level. We look forward to seeing our mutual business value double again just as quickly as possible. Andrew Cooper Business Executive Manager Confectionery Division Nestlé Malaysia, Thailand, Vietnam, Singapore

MILO WAFERS, the new product launched in June 2008.

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A KITKAT display in a local supermarket.

Our partnership and close cooperation with Nestlé Confectionery has been an ongoing success story. Hand in hand with Andrew Cooper and his team, we have achieved high double-digit annual growth figures. Bo Nielsen General Manager FMCG Business Unit Consumer Goods Diethelm Ltd., Thailand


Wyeth’s Nutrition Division under the DKSH flag Wyeth, one of the largest researchbased pharmaceutical and healthcare companies in the world, provides quality formulas and nutritional products for infants and children up to seven years of age. DKSH has been providing Wyeth’s Nutrition Division with Market Expansion Services since 2001 as sole distributor in Thailand.

DKSH provides a full service business model for Wyeth S-26 products in Thailand. This includes sales, distribution, logistics, invoicing, etc., while Wyeth covers manufacturing and advertising. In other Asian countries, Wyeth uses service providers only for logistics, but in Thailand Wyeth made an exception and chose DKSH as the full service partner. Impressive results were achieved by DKSH in 2007, not only in terms of market share but also sales records. We managed to pass the

mark of CHF 75 million in in-market sales. Com-pared to the figure of CHF 20 million five years earlier, it is clear that the partnership between Wyeth and DKSH is a highly successful one. The Regional Wyeth Management Team awarded the 2007 highest performance achievement to Thailand. The two companies’ teamwork and dedication to improving all aspects of business have been the key elements in this success. In 2008, a new and extended agreement for the Thai market was signed which will see DKSH and Wyeth continue as partners for the foreseeable future. Thitirat Yongsawasdigul Department Manager Food/Special Products Division Business Unit Consumer Goods Diethelm Ltd., Thailand

Signing the new agreement. From left: Viriya Chongphaisal, Managing Director of Wyeth, and Somboon Prasitjutrakul, Executive Vice President, Business Unit Consumer Goods, Diethelm Ltd.

The grand opening of the Wyeth activities and display.

More Kraft brands for the DKSH portfolio

have more than 100,000 employees worldwide. Six months ago, Kraft signed a new commitment with DKSH to continue the very successful partnership started nearly ten years ago. The collaboration with DKSH started with the distribution of Kraft products. Two years later, DKSH was already providing Market Expansion Services, including sales, distribution and logistics, for Kraft in the categories biscuits, chocolate, cheese and dressing in the Thai market. In line with the profitable sales records achieved in 2007, continued high doubledigit growth rates in all categories have

Kraft, one of the world’s largest food and beverage companies, owns many well-known brands, such as Oreo, Ritz and Toblerone. Their annual revenue amounts to over USD 37 billion and they

been attained for the first six months of 2008, along with exciting new product developments and above-average growth for existing brands and products. The new agreement ensures that the partnership between DKSH and Kraft will continue for another three years. In consequence, more brands such as Jacobs and LU will be added to the DKSH portfolio as Kraft acquired Danone in 2007. As Bo Nielsen, General Manager, Business Unit Consumer Goods, said: “We have a strong belief in this collaboration and expect to see continued remarkable development in the future for Kraft and DKSH in Thailand”.

Thuntharee Theeravorathunn Department Manager Business Unit Consumer Goods Diethelm Ltd., Thailand

Oreo World Display in March 2008.

Signing the new agreement. From left: Jiri Hejl, General Manager of Kraft Foods, and Somboon Prasitjutrakul. Standing: Bo Nielsen.

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H E A LT H C A R E

At the leading edge with our new IT tools

Powerful new IT tools put the Business Unit Healthcare a big step ahead. Inventory, tracking and delivery proofing become much easier and more competitive. Together with the Corporate Shared Services Center (CSSC), DKSH’s Business Unit Healthcare (HEC) has started developing a line-up of powerful IT tools which will give our internal teams, suppliers and customers a competitive advantage. Encouraged by the successful implementation of earlier tools such as EchoPlus for customer relationship management and sales force effectiveness to over 3,000 field-based staff and management, DKSH is creating new systems, including Consignment Inventory Management (CIM), Merchandising Management (MM), Order Fulfillment Tracking (OFT) and Proof of Delivery (POD). CIM meets the challenges of the medical device industry in monitoring the in-

ventory and invoicing hundreds of products on consignment in hospitals and clinics. During the CIM pilot in Taiwan, consignment inventory specialists were able to improve field force productivity and cover several times more hospitals than when the work was done manually. MM addresses the critical requirement of our customers to monitor the performance of their products in retail outlets. As Joanna Jia, Head of HEC Business Solutions in China, remarked: “Accurate and timely information on stock off-take, pricing, planogram, promotions and competitive activities in the pharmacies and other outlets is of the utmost importance.” Kah Chin Lau, Head of CSSC Global Business Solutions, added: “Our Merchandising Management solution utilizes the latest Business Intelligence tools to provide visibility to the users of the information provided on the report’s tailored dashboard, charts and other functions.”

We live in fast-changing times, and no company can afford to stand still and rely on the IT tools from yesterday. Charles Toomey Executive Vice President Business Unit Healthcare DKSH Hongkong Ltd.

Consignment inventory write-offs are often at double-digit percentage levels if no system-based item tracking such as CIM is applied. Bernd Louis Global Head of Supply Chain Business Unit Healthcare Diethelm Ltd., Thailand

A consignment inventory specialist checks the stock inventory at a hospital in Taiwan.

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OFT and POD enable our DKSH team and suppliers to track orders through the whole supply chain process: from the time the order is received, picked and packed by DKSH to the time the order is delivered and acknowledged by the customers. This order tracking system provides critical information, especially when handling life-saving and cold chain products. Charles Toomey, Executive Vice President BU HEC, emphasized: “At DKSH, we have realized that we cannot afford to stand still or rely on IT tools from yesterday. That’s why we’ve got the vision as well as the practical IT and business know-how to ensure that we are at the leading edge in developing and implementing IT-based tools. And we deliver a competitive advantage for our business partners and for ourselves”. Anyone interested in finding out more about these tools for HEC suppliers and non-suppliers, please contact Joey Ortega, Regional Director, Healthcare Business Solutions at josemari.ortega@ dksh.com.

Josemari Ortega Regional Director Business Solutions Business Unit Healthcare DKSH Hong Kong Ltd.

A merchandiser in China uses the EchoPlus merchandising management solution to collect information at a pharmacy.


Thousands of happy users

Representatives from multinational and local pharmaceutical, health and medical device companies recently met in Thailand when the new version of the EchoPlus Customer Relationship Management and Sales Force Effectiveness business solution for the healthcare industry was launched. In his speech, Bernd Lepper, General Manager Healthcare of Diethelm Limited, Thailand, pointed out the advantages of business solutions such as EchoPlus: “It is easier to cope with multiple business challenges, efficiency improves and the limited resources available in each day’s work can be optimized.” In addition, he said: “After a

short time using EchoPlus, we experienced an increase in productivity and effective calls. The investment in EchoPlus has really paid off.” Charles Toomey, Executive Vice President BU HEC, explained how mobile business solutions are a key technology for helping to make sales strategies more productive through the specific activities of supporting Customer Relationship Management and Sales Force Effectiveness. Kah Chin Lau, Head of Global Business Solutions, CSSC, emphasized that EchoPlus is not just an IT tool, but rather a business solution that has matured and is being utilized by thousands of users across continents. Kah Chin Lau said: “Compared to other IT applications in the market, EchoPlus is unique because it is a tailor-made solution by the business, for the business.”

Nitiwadee Liamwattanakul, Sales Force Effectiveness Manager of Novartis Pharmaceuticals Thailand, stated that since they started using EchoPlus, his staff had been able to better monitor key performance indicators, analyze sales and marketing more comprehensively and, most importantly, to increase sales.

Nanthasak Intharasorn Business Solutions Manager Business Unit Healthcare Diethelm Ltd., Thailand

The launch of the new EchoPlus version in Thailand attracted many representatives from multinational and local companies.

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H E A LT H C A R E

Proof of DKSH’s customer centricity

The government guidelines for Good Pharmacy Practices are absolutely essential in Vietnam. An IT team of DKSH provides support with standardized software programs. For more than ten years, the Ministry of Health in Vietnam has been working step by step to implement Total Quality Management through five Good Practices: Good Manufacturing Practices (GMP), Good License Practices (GLP), Good Storage Practices (GSP), Good Distribution Practices (GDP) and Good Pharmacy Practices (GPP). GPP is the final step, completing all the above-mentioned practices. It includes securing suitable premises and properly training personnel to follow standard operational procedures so that the effective and safe use of drugs can be ensured. Since the beginning of 2008, BU HEC of DKSH Vietnam has initiated a series of customer-oriented programs to help key

retail pharmacies fulfill government requirements on GPP. First, a series of GPP symposia and workshops combined with training courses were held in the key cities of Vietnam. In coordination with the Ministry of Health, these workshops enabled customers to understand the procedures and legal documents required to attain GPP standards. DKSH HEC Vietnam also helped customers to showcase a real GPP pharmacy model. A passionate team of GPP experts has been put together from DKSH sales representatives who have had special training on GPP. This team is now providing free value-added consultancy services to retail pharmacy

customers. All issues relating to GPP can be addressed directly in the pharmacy locations. In addition, the DKSH Vietnam IT team has developed software so the owners of selected pharmacies can standardize and track their work processes in compliance with GPP standards. Six months ago, in order to better understand pharmacies’ needs for software support, the DKSH HEC Trade Marketing and IT team met with two key companies in Ho Chi Minh City (HCMC). A trial program for these pharmacies is now under development which will be extended to ten other key stores in HCMC first.

Cuong Kim Nguyen

Tram Thi Anh Hoang

Business Unit Manager Business Unit Healthcare Diethelm Vietnam Co. Ltd.

Account Manager Business Unit Healthcare Diethelm Vietnam Co. Ltd.

IT team member Dao recommends software design on GPP guidelines to pharmacist Hoang Chinh, owner of the Hoang Chinh pharmacy.

A letter of thanks to DKSH HEC Vietnam from the Hoang Chinh pharmacy.

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The DKSH HEC Vietnam Trade Marketing and IT team advising pharmacist Dung from the Au Duoc pharmacy on software support.


A strong team produces a good harvest

DKSH Hong Kong enlarges its portfolio with two more well-known brands from Merck, Sharp & Dohme. DKSH and Merck, Sharp & Dohme (MSD), one of the world’s leading pharmaceutical companies, enjoy a dynamic, flourishing partnership. A major contributory factor to this successful symbiosis is DKSH’s expertise in logistics and distribution, marketing and promotion, as well as trade management. The partnership also serves as an informative study of how leading healthcare organizations such as MSD can successfully outsource specific activities to gain a strategic competitive advantage. A further example is the recent decision by MSD to delegate responsibility for managing two more of their well-known brands, namely Cozaar and Hyzaar, to DKSH. According to Steven Hardacre, Managing Director of MSD Hong Kong,

MSD chose DKSH’s Healthcare Alliance team because of the close working relationship between the two companies and its strong track record of success with other products (including ZOCOR) which DKSH promotes on MSD’s behalf in Hong Kong. Raphael Wong, General Manager of DKSH’s Healthcare Alliance team in Hong Kong, said: “We at DKSH have a unique service offering with our teams armed with the excellent handheld support system EchoPlus. And we are confident of being able to grow these brands strongly for our client MSD. Both companies will benefit from this extended partnership.” Indeed, DKSH’s Healthcare Alliance team in Hong Kong is the leading market expansion services provider to the healthcare industry, supplying a range of partnership contract sales and marketing solutions to more than ten multinational clients.

Products of MSD distributed by DKSH.

Raphael Wong General Manager Healthcare Alliance Business Unit Healthcare DKSH Hong Kong Ltd.

Excellent teamwork enables Alcon implementation High-quality eye care is booming in Asia. The Taiwan Healthcare team introduces the intraocular lens business. Alcon, a USA-based company owned by both Nestlé and Novartis, is the world’s leading provider of ophthalmic products and provides surgical, lens care, pharmaceuticals and medical devices to the global market. The key growth segments for Alcon’s business are the surgical and intraocular lens (IOL) businesses. The IOL market is booming in Asia because highquality eye care has become more accessible. Alcon has invested heavily in the training of surgeons to implant IOLs which are used for cataract surgery but now increasingly to correct other vision problems. DKSH and Alcon first joined forces in Hong Kong and the Philippines, and later in China and Cambodia. DKSH Taiwan got involved with Alcon at the end of 2006 and is since then responsible for the sales and distribution of IOL’s. DKSH Taiwan has had no previous ex-

perience in the ophthalmic segment. It was a steep learning curve to adapt processes and systems to the needs of Alcon. Our Taiwan Healthcare (HEC) team was able to take place on board by learning from countries who had implemented Alcon business or similar clients. The implementation was driven by a committed team of local managers who quickly gained an understanding of the needs of the business partner. HEC sales team visited every single hospital and clinic during the first months. Moreover, they

needed to pick up the inexperienced consignment inventory management in time. It included equipping and learning the necessary hardware such as scanners and database systems, especially recreating the working process to deliver quality services. The involvement from the start of experienced HEC experts from China and Thailand as well as IT specialists from CSSC was a relevant success factor. Darrell Tseng Corporate Communications Specialist DKSH Taiwan Ltd.

The Chunli distribution center in Taiwan, the backbone of our Healthcare logistics infrastructure.

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P E R F O R M A N C E M AT E R I A L S

A dependable partner in turbulent times – Business Unit Performance Materials helps customers overcome all kinds of turmoil The world is a different place today than it was in July, when DKSH introduced Business Unit Performance Materials’ strong commitment to high performance. Now, more than ever, our customers are depending on this pledge to persevere in the unfolding economic crisis. According to economic and industry forecasts, the outlook is bleak: Europe is flirting with a recession that has already brought US factory activity to its lowest level in 26 years and is causing a downward spiral of flagging consumer confidence, falling demand and lower output. And Asia is not immune to the effects of this slowdown. Thailand’s GDP could grow by as little as 3% in 2009 and China, at 7%, anticipates single digit growth for the first time since its miraculous economic boom began in the 1980s.

All industry segments are affected by the downturn: Growth in the Japanese pharmaceutical market has slowed to 4-5%, with the European market down to 3-4% in 2009. Manufacturers are scrambling to reduce costs, aiming at overall reductions of 10-20%. Production levels of leading Japanese and Korean flat panel manufacturers are being reduced by 15-20%. Most dramatic is the decline in the automotive industry, where the Automobile Association Europe estimates that production output will fall by 30% and that 20% of suppliers to the automotive industry will go bankrupt in 2009. Overall, the coming year looks likely to be a difficult one. Long before the ascent of industrialization, however, the Chinese understood that a crisis is not necessarily a disaster: their word for crisis, “wei ji”, is composed of “wei xian” (risk) and “ji hui” (opportunity). Critical periods like this bring change

at a rapid pace, which, like skiing downhill through a forest, can be dangerous. At the same time, rapid change opens up new opportunities, like an unexpected crossfield pass in a football match. How companies respond to the current crisis will determine whether they fall prey to the danger or grasp the opportunity. In order to react quickly and effectively, enterprises need reliable insights into the developments of markets as they unfold and strong relationships to secure uninterrupted access to key materials. Under the challenging circumstances of the current economic turmoil, the tried and tested business model of the Business Unit Performance Materials (BU PM) is proving a priceless asset for our customers: in-depth application know-how otherwise only provided by multinational manufacturers of performance materials, combined with the responsiveness of a local distributor, and a product and ser-

DKSH’s BU PM is present all over the world

Key sourcing markets with DKSH PM sourcing offices Secondary sourcing markets tapped We have 15 sourcing offices that draw from 68 markets.

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Under the challenging circumstances of the current economic turmoil, the tried and tested business model of the Business Unit Performance Materials is proving a priceless asset for our customers. vice portfolio specifically tailored to their needs. Now more than ever, our customers are in dire need of reducing the cost of goods manufactured. What used to be a means of improving profitability has now become a matter of survival. With BU PM as their partner, our customers stand an excellent chance of turning crisis into competitive advantage, because most of their competitors don’t have access to a global sourcing network like ours, which operates out of 15 strategic locations and taps 68 markets for materials. With the help of this network, our customers can reduce their cost of materials swiftly by switching to a lower-priced source. Sometimes, the decision to look for a new source is not voluntary. It is every entrepreneur’s nightmare: A key customer depends on him to deliver on time to keep his own production line running smoothly, when a trusted supplier sudNew innovation center in the USA To stay at the forefront of developing new and innovative products with our customers, physical proximity is essential. For this reason, DKSH has opened a new innovation center (IC) in New Jersey, USA.

denly fails to deliver due to force majeure or bankruptcy. Suddenly, every hour counts to salvage the business and, more importantly, the relationship. Our wide sourcing market coverage, supply chain expertise and strong supplier relationships can make the difference when unexpected troubles arise. We swiftly connect the dots, from identifying an alternative source, securing the order and ensuring the specifications and compliance, to booking the fastest mode of transport and scaling administrative hurdles such as freight documentation and customs clearance. The savings potential of finding a lower cost source for a key material can be multiplied when the total cost of a given formulation is targeted. This is where the combined strength of our sourcing network and our 15 innovation centers comes into play. Thanks to our deep understanding of the product applications

Success story – sweet success Non-GM (genetically modified) soya lecithin is an important emulsifier which we source for the chocolate industry and is nowadays increasingly hard to find. Our answer to this shortage was to establish a strong relationship with an Indian producer. Our customers are based in Europe, but their production plants are all over the world. And this is where our advantage as a provider of Market Expansion Services comes in: Thanks to our global networks, we can offer to supply customers’ production sites, for example Ferrero’s, anywhere in the world on time with soya lecithin of the quality they seek (non-GM) and in the desired quantity. In addition, we guarantee after-sales support and customer service wherever they’re needed. During the recent negotiation of a new contract with one of our key customers, Barry Callebaut, the world’s leading manufacturer of high-quality cocoa and chocolate, we clinched the deal to supply lecithin to production sites in France, Belgium, Poland, Malaysia, Singapore, China, Canada and the USA because we can guarantee supply and service at all those locations. Ferrero and Barry Callebaut can depend on us for uninterrupted, on-time delivery of on-specification non-GM soya lecithin everywhere in the world.

Lourdes Cuartero Vice President Global Business Line Personal Care & Household Industry (PCI) Edward Keller (Philippines) Inc. Why is DKSH opening a new innovation center in the USA?

The New Jersey/New York area has a large concentration of the major personal care and household industry companies – Avon, Estee Lauder, Colgate, J&J, Revlon, just to name a few – and all are within driving distance of our new facility. The main functions of the IC will be to develop new formulations, look for new applications and provide technical support to customers. In addition, it will give us the opportunity to further support our suppliers by providing another level of technical expertise in formulation development.

What kind of products will be developed at the IC?

We are expecting to develop formulations that cover all major categories of personal care: skin care, hair care, color cosmetics, including subsets like sun care, bath and body care.

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P E R F O R M A N C E M AT E R I A L S

of our customers, we are able to analyze their recipes and assess them for cost efficiency. In our laboratories, we produce alternative formulations that match the specifications of the original recipe at a lower total cost or maximize the cost saving while keeping the formulation properties within an acceptable range of divergence from the original specification. Our customers can compare these alternatives and discuss their merits with our specialists, who understand their language as well as their needs. In particularly urgent cases, we can supply a new

formulation within 24 hours. This total formulation approach hinges on the guaranteed protection of our customers’ intellectual property that comes naturally to us and is guaranteed via non-disclosure agreements. The equation is simple: The more we know about the needs and challenges of our customers, the better solutions we can provide. The prime adverse effect of the economic crisis for any enterprise is a decline in orders. Consumers simply buy less and in consequence sales and capacity utilization along the value chain contract.

Promotion for ViValeo, the cholesterol-lowering bread.

Success story – healthy ingredient brings healthy growth in business DKSH provides a broad range of ingredients and raw materials for the food industry, including those with a positive effect on human health. One of these functional, healthy ingredients is barley beta glucan, a natural fiber which regulates cholesterol levels. In 2006, DKSH published an article on this innovative food component in a German food technology magazine. Subsequently, the well-known bakery Günther expressed an interest in using this ingredient in new and healthy products, such as bread and rolls. To be able to label the product as cholesterolregulating, DKSH applied for a health claim from the European Commission in Rome. At the beginning of 2008, the cholesterolregulating bread and rolls were launched on the German market. Because the products are running quite well and consumer interest is steadily rising, our customer intended to extend its product range in this area. Simultaneously, DKSH Italy was launching cookies containing cholesterol-regulating barley beta glucan. We suggested this prodWorking on new formulations in the new innovation center.

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uct to the bakery Günther. They were very interested, but did not have the facilities to produce the cookies themselves. Instead, they decided to buy them in Italy. Because both companies are family-owned and Galbusera, the Italian company, had not yet sold on the German market, they were very interested in this project too. It turned out to be a win-win situation for all parties. Günther extended its product range, Galbusera expanded its business into a new European market and DKSH went from being a partner of finished food products to also being a supplier of raw materials and took its business one step ahead. This was Market Expansion Services as its best – building up markets from scratch and creating the right conditions for cross-selling between them. Günther and Galbusera can depend on us for uninterrupted, on-time delivery of on-specification barley beta glucans, professional formulation support and our ability to promote their business wherever they want to go.


We ensure top-class service for our customers wherever they are in the world and in turn gain new business by demonstrating how we deliver results by putting our relationships to work. Declining sales in home markets can be mitigated by expanding into markets not targeted in the past. This is, however, easier said than done. Markets far from home are literally foreign: Their channel mix is different, as are business practices, language and consumer preferences. Without the right relationships, building a business in a foreign market can be lengthy and risky at the same time. Being at home in over 35 markets around the world, particularly in Asia, DKSH is ready to lend its insights and relationships to business partners who need to expand into new markets quickly and without taking unforeseeable risks, as three success stories illustrate.

Eric Baden Executive Vice President Global Business Unit Performance Materials DKSH (China) Co., Ltd.

Success story – DKSH and L’Oréal: from France to the rest of the world After starting out supplying ingredients to one production site in Europe, we now deliver to 13 sites around the globe. Our successful partnership with L’Oréal began in 1995, when the cosmetics company needed to register a specialty ingredient in Europe which had been developed by a Japanese company using innovative technology. Through the link provided by DKSH in Japan, DKSH France serviced the registration, a process which required knowledge of regulatory guidelines and legal status, including patent issues. The successful introduction and marketing of the ingredient for use in the L’Oréal formulation demanded a broad understanding of chemistry and dermatology processes, supported by excellence in servicing the company’s unique demands. Subsequently, the ingredient was used in many other premium L’Oréal products. The partnership was further strengthened with the successful promotion and sales of ingredients such as actives, vitamins, silicones, humectants, preservatives, waxes, beads, plant extracts, pigments and hair dyes. At present, DKSH is regarded as one of the top suppliers of L’Oréal.

DKSH is growing with L’Oréal’s business expansion and not only supports supply requirements at its production site in France, but also services sites around the globe. Since L’Oréal entered the Chinese market, DKSH China has become one of its preferred suppliers in sourcing and local delivery of various ingredients, and the partnership has recently been extended to the supply of ingredients for L’Oréal Indonesia. L’Oréal can depend on us for uninterrupted, on-time delivery of onspecification ingredients and professional formulation support everywhere in the world.

Services for customers

Services for suppliers

Looking for hard-to-find raw materials

Market research

Information, insights and relationships

Define product specifications

Feasibility studies

Market feedback to supplier

Tailor-made product modifications, product development Scouting and screening of new suppliers Application testing

Product development

Supplier Customer In industries such as: chemical, pharmaceutical, animal care, food, beverage, personal care

Market studies and business plans Annual marketing plans Pricing and sales forecasting

Supplier accreditation

Marketing and promotion activities

Quality assurance and compliance Just-in-time delivery

1. 2. 3.

Airport or Seaport

Global supply chain management

Import and customs formalities

BU PM’s value chain.

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P E R F O R M A N C E M AT E R I A L S

Sweet success for Performance Materials Business Line Food & Beverage Industry in Edward Keller Philippines A fitness check by DKSH Consulting is the right prescription for Edward Keller Philippines. In 2007, increasing labor, material and energy costs, low factory utilization and high inventories meant Edward Keller Philippines’ (EKPI) Performance Materials (PM) Business Line Food & Beverage Industry (FBI) was performing to a return on net operating capital (RONOC) of 4%, well under the targeted 15%. Needing expert help, EKPI turned to DKSH Consulting and asked for a fitness check on the supply chain function to evaluate and compare maturity levels and assess processes.

The Business Process Reengineering (BPR) project effected a quicker changing of collective mindsets on the shop-floor that led to better plant performance. Cesar Galvez Vice President Supply Chain Management & Manufacturing Edward Keller (Philippines) Inc.

This initiative was also important to enable a fresh pair of eyes to do a reality check and help EKPI to focus on the right things.

After four weeks’ study, the project team concluded FBI was operating on a complex number of stock keeping units (SKUs) with poor forecasting accuracy (35%), high inventory levels and a complex manufacturing process. Improving these issues could reduce the net operating capital (NOC) and costs enormously. After simplifying shop-floor key performance indicators (KPIs) and with better shop-floor communication via a daily operations review, the group was aligned to measuring throughput efficiency. Other central aspects of the project were the SKU portfolio and the raw material management process. A cross-functional team optimized the number of finished goods and raw material SKUs, and a new Supply Chain Analyst function was set up to improve forecasting accuracy and material requirement planning. Reaping the benefits By August 2008, the project team had improved forecast accuracy by 30%. Reworking raw material purchase requirements yielded a reduction of 18% (CHF 260,000) in materials and 160 SKUs with minimum order quantity issues were rationalized, bringing a NOC saving of CHF 100,000.

Prior to the Business Process Reengineering (BPR) project, Patrocinia Cortez, President of EKPI & FBI SEA Regional President, and Cesar Galvez, Manufacturing & SCM Head, had set up a program to cut manufacturing costs and improve productivity. In July, the reductions made had reached CHF 95,000. Another benefit is that shop-floor mindsets now change faster. People programs such as shop-floor communication and recognition mean staff are involved in day-to-day and longer-term goals. These shifts took place not only on the manufacturing side, but in sales too. Account executives and sales managers are now more entrepreneurial and FBI Philippines is set to exceed sales targets and manage NOC. We are on track to deliver a RONOC of 16% in 2008, a huge improvement over the 4% of 2007. EKPI and DKSH Consulting got the desired results, paving the way for solid future performance. Teong Dee Ong Project Manager DKSH CSSC Sdn Bhd Malaysia

Ronald Lim Senior Vice President Country Finance Manager Edward Keller (Philippines) Inc.

Business Line FBI is a major segment of the Business Unit PM of Edward Keller Philippines, Inc. FBI contributes at least 62% of PM business from sales of manufactured and traded food ingredients, raw materials and toll manufacturing services. Manufacturing and supply chain management are integral parts of FBI and thus operational and cost efficiency issues in these areas impact on the overall FBI business.

The Edward Keller Phillipines.

Eric Baden, Executive Vice President BU Performance Materials (back row, 3rd from right), visits EKPI in May 2008.

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A product sequence and scheduling board improves shopfloor communication.


TECHNOLOGY

Taking off in the aerospace industry

As a distributor of Sumitomo Metals titanium bars, DKSH’s Business Unit Technology attended the world’s largest and most important aerospace show in Great Britain. Together with Sumitomo Metal Industries Ltd., DKSH participated at this year’s Farnborough International Airshow, held every two years. This year’s event was a special occasion, as it celebrated the show’s 60th anniversary. Established as a way for the British Sumitomo Metals Industries Founded in 1897, Sumitomo Metals Industries, Ltd. (SMI) has been producing titanium in their Osaka plant since 1954. Their net sales amounted to USD 17.3 billion in 2007. SMI’s titanium bar material is used for bestselling engines and under approval procedure for other major engine manufacturers. DKSH distributes SMI titanium bars for aerospace applications in Europe. A 100-ton contract was signed at the end of last year.

public to see and learn about the best of British aviation engineering, Farnborough has become one of the world’s premiere showcases of aerospace matters. Over the decades, dozens of new aircraft have made their debuts at Farnborough, a tradition that continues today. The airshow provides the perfect venue for the world’s civil and military aerospace suppliers and their customers to meet and consult or finalize and announce business transactions. It was the goal of DKSH to present and establish itTitanium is an advanced metal with many qualities: it is light, very strong and highly resistant to corrosion. Titanium is widely used in materials for space vehicles and aircraft, industrial plants and buildings, as well as various kinds of equipment such as wheels and everyday devices. The black magnetic mineral was discovered in 1790 in Great Britain. Its name comes from a Greek myth which tells of the giant Titan, who was defeated in a war against the gods of Olympus.

self at this event as the partner of choice for the aviation industry, an area in which DKSH would like to become better known and regarded as an exclusive supplier. New orders amounting to approximately USD 88.7 billion for some 480 aircraft and equipment systems were announced during the 2008 Farnborough Airshow, which attracted 132,636 business and 153,000 public visitors. Speaking of aerospace and titanium: About two thirds of all titanium produced is used in aircraft engines and frames. An estimated 59 metric tons are used in the Boeing 777, 45 in the 747 and 18 in the 737, with 32 tons in the Airbus A340, 18 in the A330 and 12 in the A320. The A380 uses 146 tons, including about 26 tons in the engines. Andreja Lukacek Sales Support Logistics Business Unit Technology DKSH Switzerland Ltd.

DKSH is a partner of choice for the aviation industry.

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TECHNOLOGY

DKSH Australia – a forerunner in environmental technologies DKSH Australia is an important player within the environmental technology business and provides equipment to recover plastics, glass and metals which are then recycled into new products. Large manufacturers are already offering sustainable recycling solutions as they recognize their market power and at the same time utilize the marketing benefits to people who want to make a difference. It is us, the consumers, who drive the big corporations to innovate and rethink their waste streams. Innovators include Walmart, Marks & Spencer and McDonalds. On the same note, DKSH is a global player with considerable market power. We at DKSH can look at our waste streams and, with our suppliers, choose recyclable packaging. We can reduce fuel consumption by looking at our distribu-

tion and we can make energy-saving investments. All these decisions save money and there are economic incentives, which, as energy and commodity costs increase, will become very attractive. With governments ratifying measures to reduce global carbon emissions, booming commodity prices and higher consumer awareness about recycling, the current conditions offer unique opportunities and growth for environmental technologies. Focusing on these opportunities, we at DKSH Australia started to develop a new business in environmental technologies. Using the formerly strong business in textile and packaging machinery sales as a platform to start promoting new products, we have now, after four years of activity, successfully installed machinery which assists in recycling and recovering over 40,000 metric tons of commodities per year.

Our services are tailored around reducing the overall carbon footprint. These technologies include the recovery of plastics, glass and metals from waste streams using automated sorting technologies, the shredding and pelletizing of plastic waste into granules, which can be used to manufacture new products, as well as the baling of plastics to enable efficient transport. Our portfolio is purposely built around our business partners’ needs and focuses on innovative and highly-efficient technologies. We create wealth for our customers and assist in building a sustainable future. Last year, we closed orders for over AUD 11.4 million. Major clients include Visy Industries, with over 6,000 employees, Australia’s largest recycler and amongst the top packaging suppliers. Further well-known global players in the industry are Amcor in packaging and recycling, the French service and

Recycling waste materials.

The ultra-efficient Mogensen MikroSort system can process different materials and particle sizes at extremely high rates.

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Erema recycling machines are by far the most efficient and reliable equipment for plastics recovery.


infrastructure provider Veolia and companies such as Sita and Transpacific International. With carbon reduction on the one hand and the commodity boom on the other, there are strong ethical as well as economic incentives to recover materials. Further European legislation has driven strong development for innovative technologies, which are now well-proven and can be marketed worldwide. In Australia, we have used this benefit to quickly achieve a strong market position, offering new technologies with limited competition and very attractive returns to investors. On a global scale, as population and wealth growth in developing countries generate bigger energy demands and ever-growing waste streams, there is increasing demand for environmental technologies in the very countries in which DKSH

has been deeply-rooted for many years. In fact, DKSH can offer immediate market access and expansion services for many of these new technologies and as such is in a unique position to assist in the global effort to reduce carbon emissions. With new technologies and higher demand, DKSH is the ideal partner in many ways for emerging technologies which are demand-driven, not only by market factors, but incentivized through industry funding and economic frameworks such as carbon trading. The new technologies face less competition and higher profitability for our customers and as a consequence offer attractive margins in a growing industry. To come to an individual level, there is a need to allow waste recyclers access to recyclables and feed stock, which justifies investment in processing facilities. This responsibility does not lie with the industry or the government to legislate for recy-

cling, but with the individual, the consumer – you, me and everyone else who reads this article. If all DKSH employees and their family members, friends and partners could reduce the waste going into landfill by 200 grams a person, assuming about 50,000 people took part, a total reduction of 3,650 tons of waste per year could be achieved. We need to make sure that recyclables like paper, plastics, metals and glass are disposed of in a waste stream where they can be recycled. Every little contribution makes a difference.

Eric Paulsen Business Manager Environmental Technologies Business Unit Technology DKSH Australia Pty Ltd.

Joint venture with TRUMPF extended for another 10 years DKSH’s successful long-term partnership with TRUMPF, the world’s leading machine tool manufacturer, started in 1995 with cooperation in China. TRUMPF’s core business is flexible and precise sheet metal processing such as punching and forming, laser processing and bending of sheet metals. With DKSH’s support, TRUMPF achieved a successful entry into the Chinese market. DKSH managed everything from brandbuilding, marketing, sales, distribution to after-sales services and the business developed extremely well. Sales increased from a starting point in 1995 to CHF 20 million in 2002. It didn’t come as a surprise that TRUMPF wanted to get involved more actively in the promising Chinese market. TRUMPF decided to strengthen its relationship with DKSH and effective July 1, 2002, the two parties launched a joint venture TRUMPF SiberHegner Ltd. in China. It combines the innovative, highquality products of TRUMPF and DKSH’s excellent network in China, capitalizing on the synergies available through DKSH’s existing activities in the Chinese automo-

tive, aviation and sheet metal forming industries. Key factors for success are: s Stronger market penetration (with buyers)

2008, TRUMPF and DKSH agreed to extend the contract for another ten years and to increase TRUMPF’s stake in the joint venture to 74.9%. At the same time TRUMPF SiberHegner changed its name to TRUMPF China (Hong Kong) Limited.

s Synergies through shared after-sales and maintenance network all across China s DKSH provides solutions rather than products The company is located in Shanghai and represents the TRUMPF Group in China independently and exclusively through representative offices in Hong Kong, Beijing, Chengdu and Guangzhou. In 2002, the joint venture had been signed for five years. Due to its tremendous success the joint venture contract was extended in 2005, including an additional product line for lasers and laser systems. Over the past five years, the TRUMPF business has grown by 300%. In Peter Leibinger, Vice-Chairman of the Managing Board of TRUMPF, and Dr. Joerg W. Wolle, President & CEO, DKSH Holding Ltd., at the TRUMPF headquarter in Ditzingen.

35


TECHNOLOGY

Starting small and growing bigger

Nihon SiberHegner is breaking records. The 18 units of MicroCal’s life science instruments already sold this year through us mean not only huge growth in net sales, but are also an important contribution to drug discovery and research. Nihon SiberHegner’s (NSH) contract with MicroCal dates back 20 years. NSH not only sells MicroCal’s instruments, but is also responsible for advising the customers (including seminars), installing the instruments according to the customers’ needs, which can take up to one week, and after-sales services. In the 1980s, the market for life science instruments in Japan was still extremely small and the first few years were very hard. We sold only one or two units per year of ultra-sensitive microcalorimeters, which are used in the study of biological molecules like proteins and DNA and are essential for the discovery and development of new drugs. Things changed drastically in 1995, when the Japanese government invested huge sums in life science research at national universities and public research institutes. 1997 was a record year in sales with 18 units sold across the nation. Considering the costs of USD 80,000 per unit, it’s understandable that our company was very happy with our performance that year. The up-and-down movement of our

The new ITC200.

36

sales continued, closely connected to government-funded research projects or changes in management style at Japanese universities. By 2007, our sales were back up to 18 units, and this year the upward trend has continued: We have already sold 18 units in the first three quarters. I’m thus confident that we will break our own record and raise the mark to more than 20 units before the year is out – equaling 370% growth in net sales compared to 2004.

NSH’s close ties to Japanese universities give our Laboratory Instruments team an edge in selling to companies in the pharmaceutical industry. In this respect, we are in close contact with several academic researchers. One of them is associate professor Dr. Kouhei Tsumoto from the University of Tokyo, with whom we have worked closely for years. It’s a classic win-win situation: Through NSH and MicroCal, Dr. Tsumoto is able to receive up-to-date information

Close cooperation with researchers Life science instruments

Since 2000, when the US company Celera Genomics announced the conclusion of their analysis on human genomes in the scientific journal “Science”, researchers in universities and institutes around the world have focused more intensely on Research & Development (R&D) of new drugs. It takes a long time, seven to ten years or more, until a drug is ready to market, and costs a lot of money. In the USA, USD 40 billion were used for R&D alone in 2007, but only 17 new drugs were approved by the Food and Drug Administration. While the number of new drugs approved each year remains relatively stable, R&D costs are constantly increasing. By using the highly sophisticated physical chemistry insights that MicroCal’s instruments provide, drug discovery can be accelerated and investment costs reduced.

MicroCal is the only company that offers fully-automated microcalorimetric instruments. They have become the de facto world standard as microcalorimeters for life sciences, including drug discovery in the R&D of new pharmaceutical products. These instruments have broad application areas along the entire drug discovery pipeline and are used to research cures, e.g. for cancer or Aids. The two main functions of these instruments are ITC (Isothermal Titration Calorimetry) and DSC (Differential Scanning Calorimetry). DSC studies the stability of molecules during temperature changes, while ITC detects the heat absorbed or generated when mixing two types of liquids at a constant temperature. Changes in temperature of millionths of a degree, or even less, occur when biomolecules interact, so MicroCal’s instruments have to be unimaginably sensitive to register them. The resulting data is used to characterize the structure, activity and function of proteins, nucleic acids, lipids and other biomolecules. When a person has liver cancer, for example, some liver cells produce unique proteins related to the cancer. The drug must bind with the cancer proteins to have an effect. Without knowing why the drug binds with the targeted protein, it is difficult to come up with any new drugs or modify existing ones. Does it bind? How does it bind? Why does it bind better? These are some of the questions that can be answered using thermodynamic data from MicroCal’s instruments.


Our close ties to Japanese universities give us an edge in selling our laboratory instruments to companies in the pharmaceutical industry.

My first contact with NSH was 15 years ago, when I was working with MicroCal instruments as an undergraduate student at the University of Tokyo. My professional relationship with NSH began a few years later, when I was an assistant professor at Tohoku University. Then I started acting as scientific advisor to NSH’s Laboratory Instruments department and for ten years now I have been invited to NSH to give one or two seminars a year for customers. Three and a half years ago, I came back to the University of Tokyo as an Associate Professor. We have several MicroCal laboratory instruments that are used for research by my students and visiting representatives from pharmaceutical companies. MicroCal’s instruments have become a world standard in life sciences. Dr. Kouhei Tsumoto Associate Professor of Medical Genome Sciences The University of Tokyo

on essential research instruments for his research, as well as the actual instruments. With Dr. Tsumoto’s recommendation, we in turn are able to sell our instruments to pharmaceutical companies more effectively. In his role as Associate Professor of Medical Genome Sciences and being a pioneer user of MicroCal instruments, Dr. Kouhei Tsumoto is often called upon as a consultant by pharma and life science companies to advise on the best research instruments on the market. He also holds seminars and gives lectures for our customers on the use of our laboratory instruments.

Master students of medical genome sciences at the University of Tokyo view research results.

Yuji Hirohata Senior Sales Manager Laboratory Instruments Business Unit Technology Nihon SiberHegner K.K. Japan

The Laboratory Instruments team with their MicroCal instruments at the TEC showroom in Heiwajima.

37


PRESS REVIEW

KANAGAWA SHIMBUN June 10, 2008 However much times change, some things remain the same. DKSH is a Swiss company and sticks to its values. By constantly challenging themselves (what used to be called the pioneering spirit is now seen as entrepreneurial spirit) their core remains unchanged. The DNA that made DKSH’s forefathers enter new markets hasn’t changed in 140 years.

HANDELSZEITUNG June 25 - July 1, 2008 DKSH, number 20 of the 500 biggest companies in Switzerland, ranks 14th in terms of number of employees.

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DER BUND July 30, 2008 The mood among Swiss companies had long swung between two extremes: total euphoria and risk-aware reluctance, said Joerg Wolle, President & CEO of DKSH in an interview with the Tagesanzeiger. In the meantime, he went on, most companies had grasped that China is an extremely interesting market – but definitely no eldorado. Wolle speaks from experience: the companies and service providers united under the umbrella of DKSH have been active in China for over 100 years, today in more than 50 locations.

WATCH FILE June 2008 Joerg Wolle: “Why we acquired Desco is based on two thoughts: Firstly, we want to become a strong group with a wide range of products that corresponds to retailers’ requests for sales. This enables us to do innovative area marketing as well as sales promotions, as it is usually difficult to do a rollout effectively with a limited number of brands. Secondly, Nihon SiberHegner has an excellent after-sales service system, which is absolutely essential in the watch business. In order to enhance these after-sales services, we needed to combine the strengths of both groups. I would like to stress that the know-how we have accumulated will further develop the market. Having a history of more than 140 years in Japan, we have gained deep knowledge of local culture and consumption trends in order to deploy creative marketing and generate sales.”

CASH DAILY August 19, 2008 Shares of non-listed companies can help investors cushion their portfolio losses. DKSH scores well, with a plus of 17.3%.


“Having a history of more than 140 years in Japan, we have gained deep knowledge of local culture and consumption trends in order to deploy creative marketing and generate sales.” Dr. Joerg Wolle, President & CEO of DKSH Group, in Watch File, June 2008

BIETIGHEIMER ZEITUNG August 23, 2008 In 2009, machine tool manufacturer Trumpf from Ditzingen will open a new plant at Taicang, 50 kilometers north of Shanghai, which will replace three existing facilities. The factory is 100%-owned by Trumpf, which has been active in China for many years in the form of sales and service providers in 12 locations. […] Together with the Swiss DKSH Group, Trumpf has built up a close-meshed sales and service network in China.

SPIRAL August 2008 DKSH Group, a focused distributor for luxury goods, has dealt with many luxury watch brands, including Roger Dubuis and Harry Winston. In addition, the recent acquisition of Desco means that luxury watch brands such as Maurice Lacroix have joined the DKSH family. Marcel Braun, Executive Vice President Luxury & Lifestyle of DKSH, says that all the group’s brands are outstanding, whereby the prices of some items vary slightly, with the aim of occupying both middle- and high-class markets.

JAPANMARKT August 2008 When asked what’s changed in his company's business in recent years, Dr. Joerg Wolle, CEO of Zurich-based DKSH Holding Ltd., answers: “The days of business partners are over: Today, specialists want to talk to specialists.” Wolfgang Schanzenbach, President of Nihon SiberHegner K.K. in Tokyo, confirms the transformation. It is no longer sufficient to transport goods from one country to another, modern communications technology is so advanced that today supplier and buyer can arrange terms at short notice. For this reason, NSH has been developed into a knowledge-based company able to advise its business partners on market expansion. Customers want business partners that know the mechanisms of the markets in destination countries inside out and can offer comprehensive solutions.

THE PEAK August 2008 With the acquisition of Desco, DKSH has added luxury watch brands Maurice Lacroix, British Masters, Breitling, and Parmigiani to its current stable of brands. How will this contribute to the Asian business strategy? Dr. Marcel Braun: “We have a much stronger portfolio of brands now that we are geographically represented in all the countries across Asia. Desco’s strength complements ours nicely: they are a strong player in China and Australia, while we’re better with the Japanese market. Together with our knowledge of the European market, this will make us a stronger entity”.

39


PRESS REVIEW

HONG KONG ECONOMIC TIMES September 8, 2008 In recent years, DKSH has striven to build a platform for one-stop services. Apart from logistics, its market expansion services also include suitable brand and market strategies, as well as retail outlets to fit the products. As a pioneer of expanding markets in mainland China, Dr. Wolle said: "History is the edge we have. For over 100 years, we have worked to maintain good partnerships with large supermarkets and mom-and-pop stores."

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INPUT Issue 1/2008 The history of DKSH provides an almost ideal illustration of how Swiss entrepreneurial spirit prevailed in Asia against all odds. Often, it was a question of identifying niche markets to which products and services of a quality and reliability superior to those of more powerful competitors could be supplied. Joerg Wolle: â&#x20AC;&#x153;DKSHâ&#x20AC;&#x2122;s business model is designed to establish access to complex markets and demanding decision-makers and to successfully build on that, step by step. An understanding of those cultures and the social skills involved â&#x20AC;&#x201C; knowing what makes the other party tick â&#x20AC;&#x201C; is absolutely vital.â&#x20AC;?

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WESTSĂ&#x201E;CHSISCHE HOCHSCHULE ZWICKAU September 2008

SOUTH CHINA MORNING POST September 15, 2008 â&#x20AC;&#x153;Chinaâ&#x20AC;&#x2122;s expanding services-oriented economy will benefit the tourism industry and boost demand for affordable luxuries, which are our areas of focus and expertise,â&#x20AC;? said DKSH CEO Joerg Wolle in an interview last week. DKSH, which supplied the first gas lights for the â&#x20AC;&#x153;Bundâ&#x20AC;? in Shanghai about 100 years ago, has since expanded. It now distributes western goods in Asia and exports Asian products to Europe and the United States.

Joerg Wolle: â&#x20AC;&#x153;As a former trading house rich in tradition, DKSH helped shape the globalization process more than 140 years ago, long before it had become a household term. Our tradition makes us unique, because our deep cultural understanding is impossible to copy. Millions of people in Asia every day come into contact with the products we sell: We touch the everyday lives of people in the truest sense of the word. Our success on the Asian market is above all based on the fact that we as a Swiss company have got to know local circumstances and have adapted to them.â&#x20AC;?


"DKSH has evolved from a trading house to a marketing, sales and distribution specialist with a brand new concept: Market Expansion Services." Dr. Joerg W. Wolle, President & CEO of DKSH Group, in Capital CEO, October 2008

WATCH CRITICS September 2008 Marcel Braun, Executive Vice President Luxury & Lifestyle of DKSH, said: ”In the watch world, where brand owners dominate the scene, the success of DKSH very much depends on visionary management and driven front-line people, and in both respects DKSH is first-rate. It won’t be long before we see positive differences in the watch market, thanks to the synergy between DKSH and the former Desco.”

FUJI SANKEI October 30, 2008 Marcel Braun, Executive Vice President Luxury & Lifestyle of DKSH, said: “The merger has added new brands and we are looking to double the size of our operations in Japan by further strengthening our watch business.”

HONG KONG BUSINESS October 2008 Joerg Wolle: “From a European point of view, many people think that China is an eldorado. You just have to get in there, set up shop and everything is easy. People like us, who’ve been in this business for more than 100 years, have learned to balance the excitement with the risk factor.” CAPITAL CEO October 2008 Joerg Wolle: “DKSH has evolved from a trading house to a marketing, sales and distribution specialist with a brand new concept: Market Expansion Services. This means we help CEOs in Europe and North America to plot how to grow, because not to grow is to fall behind and fail. When they aim for growth, they think of Asia, as it offers most room in terms of market and resources. Thinking of Asia, they would naturally also think of DKSH, as we’ve been here for over a hundred years.”

TAGES-ANZEIGER November 26, 2008 So far, Swiss transport companies have been spared by the pirates off the coast of Somalia who are more interested in smaller, slower vessels rather than container ships. Companies like DKSH are unaffected. “Until now there have been no price increases,” was the word from the Zurich-based company.

41


D K S H O N S TA G E

DKSH Cambodia – continued rapid growth

With expected growth of more than 50% this year, DKSH Cambodia inaugurated the second new distribution center in Phnom Penh after the first opened 18 months ago. The 10,000 sqm DKSH compound is probably the largest ISO-certified distribution center in Phnom Penh. Opened six months ago, the new facility, located next to the two existing distribution centers, increases DKSH’s storage capacity and upgrades and improves existing facilities. It represents another big step forward in DKSH’s commitment to quality and continuous improvement. DKSH Cambodia obtained the ISO certificate from UKAS (the United Kingdom Accreditation Service) three months ago for Marketing, Sales, and Distribution of Healthcare Products and Consumer Goods. This year’s expected 50% organic growth brings the Business Unit Consumer Goods in DKSH Cambodia to another level. Due to DKSH’s intense growth in the last years, existing capacities had to be expanded in order to allow further expansion and growth. Thus, less than two years after the inauguration of the previous distribution facilities in October 2006, DKSH in Cambodia has opened an additional distribution center. Furthermore, the Business Unit Healthcare has also made major changes to its logistics facilities and storage capacity in the distribution center. The mezzanine floor has been extended and the existing racks replaced with new high-quality ones. These improvements are another milestone in our commitment to be the No. 1 provider in Market Expansion Services in Cambodia.

Menh Tech Country Finance Manager DKSH (Cambodia) Ltd.

Cutting the ribbon to inaugurate the new distribution center: Bo Nielsen, General Manager FMCG, Business Unit Consumer Goods, Diethelm Ltd., Thailand.

The expansion and improvement of the warehouse facility by DKSH Cambodia is certainly a wise decision. It provides the opportunity for rapid growth of DKSH’s business in Cambodia and meets the need for quality storage space for the future growth of our business over many years to come. Tuot Sokavey Business Manager Texchem Cambodia

The new warehouse shows DKSH’s commitment to the continuous improvement of the logistics plan and warehouse management, which is very important in terms of quality storage capacity as well as to prepare for further growth. Thanakorn Wattanawijarn Country Manager Dumex Cambodia

By opening another new warehouse, DKSH Cambodia has reached a new milestone. For the three years that we have worked with DKSH, Unza’s sales in Cambodia have tripled. With DKSH’s dedicated team, Unza has been able to launch a new range of products almost every year. The new warehouse facility will definitely enhance DKSH’s customer service and position on the path to higher growth. Jeffery Hoh General Manager, Developing Markets Cambodia, Myanmar, Philippines, Laos Unza Indochina Inside the newly renovated distribution center of BU HEC.

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The largest Healthcare distribution center in Thailand

The Business Unit (BU) Healthcare (HEC) of Diethelm Limited, the Thailandbased operation of the DKSH Group, is proud of its new, state-of-the-art distribution center in Bangna. This new facility represents a total investment of over THB 1 billion (CHF 31 million). The new facility is located on a 20-acre plot adjacent to the Bangna-Trad superhighway, 23 kilometers from Bangkok, close to the international airport and ideally located to service suppliers and customers across the country. It is the largest healthcare distribution center in Thailand and has the most advanced standards of Good Manufacturing Practice (GMP) in logistics technology, offering our suppliers and customers the highest level of logistics and distribution services available anywhere in Thailand. We are the only provider of one-stop services for the pharmaceutical, consumer health, and medical devices and supplies industries in Thailand, all tailored to the specific needs of our business partners. At the opening ceremony in March 2008, suppliers and customers had the

The decision by the Group to create Corporate Logistics has come at a crucial time. Our Business Units across the markets have been operating fairly independently on different logistics platforms, which is not sustainable from a Group perspective, especially in an ever-more complex and competitive business environment. Rising costs and margin pressure, stiff competition and demanding service requirements, amongst other things, force us to re-evaluate the ways we have been working. Therefore, it has been decided to align all logistics activities amongst our Business Units by creating Corporate Logistics, thereby capitalizing on our combined strengths and synergies. Corporate Logistics aims to harmonize best practices and standardize logistics-related platforms. Furthermore, DKSH will benefit from better process transparency and project supervision. Corporate Logistics will also train

This new center will aid DKSH in strengthening its No.1 position in Market Expansion Services in Thailand.

unique opportunity as guests of honor to tour the distribution center and see the more than 40,000 sqm storage area capable of holding 35,000 pallets. They were also able to see first-hand our unique cold chain receiving facilities, which ensure cold chain products are kept under the highest quality conditions

staff in the area of logistics. Corporate Logistics serves as functional home for all Logistics experts within DKSH. In future, we will move closer and maximize the benefits from our strengths and synergies to achieve a common goal of success. Together, we will help to move the Group forward and enhance our competitive advantage. At the end of the day, we and in particular our clients and customers will clearly benefit from our centralized, efficient logistics approach. Jan Mueller Vice President Corporate Logistics DKSH (China) Co., Ltd.

A native German, Jan joined DKSH on May 1, 2008. He holds a degree in Business Administration and has spent the past 20 years in East Asia working for Ciba-Geigy, Zuellig Pharma and most recently NestlĂŠ, where he was Logistics Director Greater China Region. He is married and has a 12-year old son.

at all times. This capacity will aid DKSH in Thailand in strengthening its position as the No. 1 in Market Expansion Services. The investment in this facility is consistent with what Bernd Lepper, General Manager of BU HEC in Thailand, always says: â&#x20AC;&#x153;We provide the latest, state-of-theart facilities with highest quality, optimized distribution services for pharmaceutical healthcare products, in strict compliance with GMP regulations.â&#x20AC;? On this auspicious occasion, Her Royal Highness Princess Somsawali graciously presided over the ceremony. Dr. Joerg W. Wolle, President & CEO of DKSH Group, welcomed her and more than 300 guests of honor, including the Executive Vice President BU HEC, Charles Toomey, and Executive Vice President BU Consumer Goods, Somboon Prasitjutrakul, who is also the President of DKSH in Thailand. The grand opening ceremony was a memorable event, allowing the BU HEC to showcase its new center to business partners and staff to great effect. Yingparn Proeksayajiva Marketing Communications Manager Business Unit Healthcare Diethelm Ltd., Thailand

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D K S H O N S TA G E

Lighting the lamp for the DKSH Brand The last CEO Roadshow on the branding project this year took place in India. The event in New Delhi was in a class of its own, with the red carpet, beautiful floral decorations and red and white DKSH balloons lending the show a stylish setting. Peter Althaus, Vice President Business Unit Technology, DKSH Switzerland, opened proceedings with a welcoming speech and invited our President & CEO, Dr. Joerg Wolle, to light the lamp – an Indian tradition for any opening ceremony. In his presentation, Joerg Wolle explained once again why a strong brand is so important to DKSH. Following up, Martina Ludescher, Vice President Strategy & Corporate Communications, gave details of the brand implementation, such as the new corporate design guidelines and the website relaunch. Participants left the show eager to focus on making the DKSH brand one of the best known in the world. Olive Fernandes Sales Support Business Unit Performance Materials DKSH India Private Ltd.

Inspiration at Disneyland

DKSH supports cultural exchange

A very special location was chosen by the BU HEC Hong Kong for their management meeting: The 17 executives congregated at one of the six Cinderella Ballrooms at Disneyland! Cinderella and her carriage failed to appear but instead, the unique environment filled the managers with positive energy to discuss their three main focuses: operational excellence, and business and leadership development. Optimizing these aspects would help them achieve their mission of being resultsoriented experts providing “right-for-you solutions”. Ultimately, this is what will keep them market leaders – and that’s no fairy tale.

The management vision of education development not only affects employees, but also their children. The American Field Service (AFS) is one of the world’s largest non-profit voluntary organizations. It provides intercultural learning opportunities for students through international exchanges. Every year for the last 14 years, DKSH Thailand has given three chil-

David Mok Vice President Business Unit Healthcare DKSH Hong Kong Ltd.

44

dren of employees the chance to develop knowledge, skills and ways of thinking through AFS Intercultural Programs. This year, together with their parents, four students were invited to a welcome party at the Consumer Goods Building where they introduced themselves. Two of the four, who have already been to New Zealand and Australia, shared their experiences with foreign cultures and thanked DKSH for enabling them to enjoy one of the best years of their lives. For the other two, there’s an impressive exchange year to come. Janya Phakkhaphattrakul Corporate Human Resources Manager Diethelm Ltd., Thailand

DKSH helps you to plan the year For 2009, instead of a calendar for our employees and business partners we have produced an agenda which should help you plan both 2009 and 2010. Illustrated with four pictures and texts about what Market Expansion Services means, it also contains plenty of pages for personal notes. The agenda is the ideal tool for efficiently managing your market expansion plans! If you have not received your personal copy or copies for your business partners, please contact your local Brand Champion.


DKSH and Campbell’s – celebrating ten years of partnership This year marked ten years of partnership between Campbell’s and Diethelm Singapore. In Asia, a ten-year collaboration with yearon-year double-digit growth in market sales for FMCG constitutes a record.

With the trust and support of the Campbell’s team, plus the positive attitudes and commitment of dedicated colleagues, our achievement goes far beyond marketing and sales fundamentals – from basic 3D’s excellency (Distribution, Depth of Stock & Display) through to Market Expansion capabilities that allow both teams to be more proactive on anticipated market challenges, thus keeping the enthusiastic spirit needed to maintain the highperformance standard. In recognition of these distinctive achievements, Anddrew Wee, Campbell’s Singapore Country Director, presented a specially designed plaque to Leonard Tan, Managing

Director of Diethelm Singapore, in appreciation of his first-rate leadership. Plaques also honored the team members who have contributed greatly to the Campbell’s business since the first day of partnership. This remarkable success story has been made possible by great teamwork and an excellent understanding between the two companies. Both teams strongly believe in overcoming challenges and promoting the brands to greater heights under strategic leadership. Carolyn You Business Manager Business Unit Consumer Goods Diethelm Singapore Pte Ltd.

The leading way in total solution selling DKSH Technology Malaysia offers its customers a wide range of leading technologies from renowned manufacturers. Their products range from advanced machinery for industry and construction over components and consumables to analytical and scientific instruments, one of which is Robotic, a machine used for sample preparation, demonstrated by a DKSH consultant. They even lead the way in total solution selling. As Nick Grantham, Managing Director TEC Malaysia, says: “We are neither distributors nor contractors. We are

consultants providing total solutions. We leverage our product expertise, market experience, state-of-the-art demonstration and training facilities to create value for suppliers and customers. The higher their growth, the higher ours: that’s what I call a win-win situation.” Nick Grantham Managing Director DKSH Technology Sdn Bhd Malaysia

Bringing hot pizza to your home The hospitality business of the Business Unit (BU) Technology (TEC) provides value-added services in distribution, project management and after-sales services for customers such as top hotels, fast food chains, coffee houses and fine dining restaurants. Since its first restaurant opened in China in 2005, Papa John’s has become one of the most important business partners of DKSH China BU TEC. As Papa John’s business has expanded and the cooperation between the two companies deepened, DKSH found more opportunities to help its partner to grow its business apart from just selling products. Restaurant Buy Delivery is one of the sales concepts developed in 2006: People can order from home and receive the freshly cooked dishes after-

wards. Based on this concept, DSKH recommended the Cooktek heated delivery concept to Papa John’s. This system can solve a number of food service challenges, such as keeping pizza or chicken at a suitably high temperature, retaining humidity levels, ensuring food quality and ease-of-operation. The system makes it possible to keep customers’ food hot and fresh en route from the restaurant to their dinner table at home. Papa John’s sales have increased by 20% at each store. Now, after the successful collaboration with Papa John’s on Cooktek, DKSH has conceived another long-term business project to be launched in Papa John’s China – the central kitchen engineering system.

Lily Xiao Executive Secretary Hospitality Operations DKSH (China) Co., Ltd.

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D K S H O N S TA G E

A red carpet for a successful brand

DKSH opens the first Harry Winston watch boutique in China. DKSH is proud to be the exclusive distributor in the Greater China region for Harry Winston Rare Timepieces. Harry Winston is renowned worldwide as the “King of Diamonds” and America’s true luxury brand with over a century of history. A few months ago, a grand opening ceremony was held for the first Harry Winston watch boutique in China. Set up by DKSH, who will also manage it, the new store opened in Shanghai’s Plaza 66.

Harry Winston, synonymous with the glamorous world of cinema, invited exclusive guests to an opening event with a red carpet to welcome them. David Gouten, Vice President Wholesale Timepieces and Jewelry of Harry Winston, Dr. Marcel Braun, Executive Vice President Luxury & Lifestyle, Francis Phua, General Manager Luxury Watches Greater China, DKSH Hong Kong, and Eric Baden, the Country Head of DKSH China, cut the ribbon to unveil the extravaganza in the boutique. Live models fashioned an unforgettable presentation of the collec-

tions to compliment the displays of classic watches. The location itself is a sparkling celebration of the elegance, unique spirit and artistic design of the ultimate brand, showcasing a variety of classic Harry Winston watches that includes limitededition and exclusive timepieces. DKSH has successfully helped many prestigious watch brands establish a strong presence in Asia. Since 2001, DKSH has assisted Harry Winston watches in building their brand profile in the minds of targeted consumers, establishing a strong foothold and distribution among the top retailers in Hong Kong, Taiwan, China and Japan. With the official opening of the Harry Winston watch boutique in Shanghai, DKSH will continue on its path to make the brand even more successful. Katie Chiu Assistant Marketing Manager Luxury Watches Business Unit Consumer Goods DKSH Hong Kong Ltd.

Cutting the ribbon. From left: Francis Phua, David Gouten, Marcel Braun and Eric Baden.

A model showing off the latest Avenue Squared.

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The Harry Winston watch boutique at Shanghai Plaza 66.

The limited Ocean Tourbillon.


INSIDE DKSH

A minute with… Captain Danny

Danny Chan has worked for DKSH in Hong Kong since 1985. His main duty is to control and maintain an object 13.72 m long – the sleek brown cruiser used to entertain our management and guests. An experienced skipper, Danny looks after the company boat well: it’s always clean, tidy and in good condition, no matter if the weather is sunny, rainy or stormy.

What do you like about your job? I love the ocean and nature. Sailing on the sea makes me feel calm and free. I get great satisfaction from maintaining the whole boating operation and making it safe and enjoyable for every guest. Tell us an anecdote that happened during your time working for DKSH. The weather can be very unpredictable. One day, I was sailing back from a remote area to the marina. Suddenly, a typhoon came up and within a few minutes the sky was dark. We were in the middle of a thunderstorm with high winds and terrible 20-foot waves crashing onto our boat. Luckily, I could get back to the marina safely. The Marine Police approached us immediately for an inspection, as they could not believe that

What does your typical working day at DKSH look like? As my main duty is to ensure that the boat trips are safe, I start work every day by checking and running the engine. Then I clean and tidy up the cabin and deck area so that our guests can enjoy a comfortable trip. Afterwards, I clean the boat again and take it back to the marina.

The DKSH puzzle

ACROSS 2 What is the important emulsifier sourced by PM for the chocolate industry? 4 For which industry are two thirds of the world’s titanium production used? 8 Robert Peugeot is one of DKSH’s new shareholders. What important committee at DKSH has he also joined?

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9 Edward Keller Philippines asked DKSH Consulting for a... 10 In what city did the new DKSH trade fair design make its debut? 11 Which brand of soup has been served by DKSH for 10 years? 13 Where did DKSH open the largest healthcare distribution center in Thailand?

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DOWN 1 Where did the second Brand Champion Workshop take place? 3 Who had the initial idea of setting up CSSC in Malaysia? 5 Which country was the last stop of the CEO Roadshow this year? 6 Name a watch brand distributed by DKSH exclusively in China. 7 Name the book recommended by Somboon Prasitjutrakul. 12 Which Business Unit created the first BU brochure?

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Please send the completed solution to 6

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Captain Danny, on our company boat.

If you’ve read this issue of Fantree News carefully, solving our crossword puzzle should be no trouble at all.

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a small boat could sail back safely in that kind of terrible weather!

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communications@dksh.com We will draw 20 correct solutions which will win a DKSH umbrella. Closing date: January 30, 2009.

We wish you a prosperous and happy New Year!

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www.dksh.com


Fantree News 12/2008