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Doing Business in Brazil with State-of-the-Art Precision Grinding Systems

Doing Business in Brazil with State-of-the-Art Precision Grinding Systems. Dwight Myers Cinetic Landis Corp. Fives is an Industrial Engineering group which designs and supplies equipment and plant facilities for major industrial players. Grou p expertise.

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Doing Business in Brazil with State-of-the-Art Precision Grinding Systems

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  1. Doing Business in Brazil with State-of-the-Art Precision Grinding Systems Dwight Myers Cinetic Landis Corp. Cinetic Landis Corp.

  2. Fives is an Industrial Engineering group which designs and supplies equipment and plant facilities for major industrial players Cinetic Landis Corp.

  3. Group expertise • Our know-how: management of large projects, whatever their sizes, all around the world. • Our added value: our ability to develop tailor-made manufacturing systems for each client. • We work in partnership with all the leading groups of the industry :Arcelor Mittal, General Motors, Alcan, Lafarge, Toyota, Tata-Corus, Renault-Nissan, Total,ThyssenKrupp, Areva, Alstom, PSA, Cemex , EDF, Chrysler, Michelin, Alcoa, Honda, La Poste, Holcim, BHP Billiton, Rusal, Hydro, Posco, Ford, Baosteel,Tisco, Saint-Gobain, Outokumpu, Air liquide, Tereos, Caterpillar… • Leading manufacturing positions in aluminum, steel, glass, cement, energy, sugar and automotive & logistics Cinetic Landis Corp.

  4. An international organization based on a worldwide network of subsidiaries • 5,700 employees around the world • $1.5 - $2.0 Billion Annual Sales Globally Cinetic Landis Corp.

  5. New Facility = Green Opportunities • Our new facility is situated on a 26 acre “green-field” site • Lean processing in both Manufacturing and Supply Chain is our focus • Energy & Utility consumption reduction from 2007 to 2008: • Electricity by - 15.7% • Natural Gas by - 84% • Water by – 87.5% • Manufacturing Waste by - 26% Cinetic Landis Corp.

  6. Cinetic Landis History Gardner and Landis Acquired by Litton Gardner Acquired by Landis Tool Co. Landis Tool Co. • Incorporated 1897 1950 1968 1958 1894 1905 John Lund Co. Acquired by Landis Landis Co. Founded by A.B. & F.F. Landis Gardner Machine Co. Established Cranfield Acquired Pratt&Whitney / Besly Acquired 1995 1991 1996 1983 1994 BESLY CITCO Acquired by Litton Litton’s Commercial Businesses Spun-off to Form Western Atlas Landis & Gardner Consolidated Cinetic Landis Corp.

  7. Cinetic Landis History Landis Celebrates 100th Anniversary Goldcrown Acquired by Landis Gardner • LANDIS GRINDING SYSTEMS 1997 1997 1997 2001 1999 1998 UNOVA Spun-off From Western Atlas Cincinnati Grinding Division Acquired Landis & Hebron Consolidated Global Reorganization Landis, Landis Cincinnati, Landis Gardner, CITCO & Gardner Abrasives, Acquired By Fives Develop New Line of Flexible And Eco Friendly Grinders Landis Moves Into New Facility Hagerstown, MD 2008 2010 2005 2006 Gardner Abrasives Consolidated Cinetic Landis Corp.

  8. Facility Locations Cinetic Landis Corp.

  9. Precision Cylindrical and Disc Grinding Machines Product Line Summary “Built in the USA” Cinetic Landis Corp.

  10. Product Line Summary – Consumable Products Cinetic Landis Corp.

  11. Market Segments B e a r I n g s Auto/Diesel Internal Combustion Engine Transmission/Chassis Small Engine/Compressors Cinetic Landis Corp.

  12. Global Customer Base Cinetic Landis Corp.

  13. World Wide Service, Support & Agents CIM BERGANDER FORMA MOSCOW CLC KARLSSON CZECH POLAND REPUBLIC WEST YORKSHIRE STOCKHOLM FREESON BEIJING SCOTLAND CLC BEIJING CLC CLC CHICAGO Maryland KIECO CLC JAPAN Korea CLC CLC Milford SOUTH BELOIT FREESON SHANGHAI CLC INDIANAPOLIS CALCUTTA MTI: NEW DELHI MADRAS MEPRO SIMSA MADRID SALTILLO PUNE BOMBAY HIRZ KRAEMER GERMANY CLC MARRO BRAZIL CLC EMANUELE FARMINGTON HILLS FLAME SPRAY ITALY BAY CITY MASCHERPA MILANO EQUIP ERNST INDUSTRIES POLACK AIMS PTY PARIS STUTTGART MELBOURNE Cinetic Landis Corp.

  14. This is what we do!Precision Grinding Solutions Cinetic Landis Corp.

  15. And We Do It Big (Up to 12 M in Length) Cinetic Landis Corp.

  16. What Are the Opportunities in Brazil? Cinetic Landis Corp.

  17. Past & Present Opportunities • Cinetic Landis’ main concentration was around the light transportation industry • Many of these Brazilian companies are based out of Europe or business is tied to Europe • Parents companies have saddled Brazilian subsidiaries with their production • Brazilian companies are now driving global decisions and installations • Aggressively expanding Sales focus into the Agriculture, Construction, Mining; Aerospace; Oil & Gas and Heavy Transportation industry segments • Past revenues generated from Brazil ranged from $5 to $10 million annually • 2011 Sales projections driven from Brazil are forecast at $20 - $25 million and growing Cinetic Landis Corp.

  18. How Are We Executing this Opportunity? Cinetic Landis Corp.

  19. Sales Channel & Service Network • Americans are perceived as arrogant by the Brazilians. You have to overcome this initial perception • It’s critical Brazilian nationals are involved with initial customer introductions and guide you through relationship management • This can be done either through an agent network or direct Sales / Service employees • Cinetic Landis will continue to develop agent network supported by direct Brazilian employees working from Fives Sao Paulo office • A Cinetic Landis Regional Manager will have Sales & Service oversight in this region • Product Specialist will travel from US to support all imminent Sales Cinetic Landis Corp.

  20. What Are the Likely Problems in Brazil? Cinetic Landis Corp.

  21. Problems to Keep in Mind • During the Sales process, understand your Brazilian competitors. If you have internal competition, your customer will have a 40% duty added to your price • If you have no internal competition, your customer can get duties dropped to as low as 2% • Internal competition may dictate your product entrance into this market • Keep track of currency fluctuations as you would with all global sales. The dollar exchange rate is swinging wildly • Taxes and duties are hard to understand especially when applied to Service and Parts business. We’ve had no problems with some customers and had 40% duties applied to others • Map out your spare parts strategy with your customer and vendors. Critical components should be stocked either by your customer or vendor managed inventory (VMI) in Brazil • Spare or warranty parts can have close to a 100% duty applied if not handled correctly Cinetic Landis Corp.

  22. Problems to Keep in Mind • During the Sales process, clearly define the INCOTERMS and where transfer of title will change • Ideally, it’s best to have your customer take control of trucking / shipping after equipment is packaged for overseas shipment • Proper packaging is critical • You don’t want to be chasing ships up and down the US coast • Carry insurance on all shipments for damage once equipment leaves your facility (if you’re responsible for shipping) • Work closely with your customer to have the proper customs paperwork for your equipment. If it’s not right, it won’t move out of customs • Clearly define during the Sales process who is responsible for rigging, placement of equipment and connection to plant utilities • It takes up to 2 months for work visas! Work this out ahead of installation Cinetic Landis Corp.

  23. 2009 Shipment into Brazil • Customs will open your machine packaging for inspection • Consider sealing all critical component boxes individually • Even though ownership has transferred, you’ll still be responsible Cinetic Landis Corp.

  24. Things to Remember! • Dress well, Americans are stereotyped as being too casual • There will be fierce opposition from European competitors. Remember, many of the Brazilian companies have ties to Europe • As in all global regions, it’s best to have a local presence in both Sales & Service. We’ve done well in China and India with this strategy • Understand Brazilian labor laws. Hire employees through a local Brazilian company. Cinetic Landis will have direct employees at our Fives Sao Paulo office that’s a registered Brazilian company • Develop a trusting relationship with your customer. This can be hard when asked to proceed on a project without a Purchase Order or payment Cinetic Landis Corp.

  25. Conclusion • The Chinese and Indian markets have grown as predicted • Brazil has lagged but investment is growing • Understand local competition, taxes and duty laws • Get your Sales and Service strategy in place • Target specific industries, it will not be easy. There’s a relationship building period but this can be overcome • Plan for the hidden costs with doing business in Brazil • Competition will be fierce but once relationships are established, you’ll be given the opportunity to loose all future orders • Enjoy the challenge of doing business in Brazil! Cinetic Landis Corp.

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