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THE CHINA MARKET - CHALLENGES & OPPORTUNITIES 威 胁 与 机 遇 共 存

THE CHINA MARKET - CHALLENGES & OPPORTUNITIES 威 胁 与 机 遇 共 存. SEPTEMBER 28, 2002. CURRENT STATE OF THE INDUSTRY. THE STORY EVERYONE HAS HEARD HIGH GROWTH UNDER-DEVELOPED IN TECHNOLOGY LABOR INTENSIVE. CURRENT STATE OF THE INDUSTRY. THE STORY VERY FEW HAVE BEEN TOLD

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THE CHINA MARKET - CHALLENGES & OPPORTUNITIES 威 胁 与 机 遇 共 存

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  1. THE CHINA MARKET - CHALLENGES & OPPORTUNITIES 威 胁 与 机 遇 共 存 SEPTEMBER 28, 2002

  2. CURRENT STATE OF THE INDUSTRY • THE STORY EVERYONE HAS HEARD • HIGH GROWTH • UNDER-DEVELOPED IN TECHNOLOGY • LABOR INTENSIVE

  3. CURRENT STATE OF THE INDUSTRY • THE STORY VERY FEW HAVE BEEN TOLD • EXTREMELY COST COMPETITIVE ENVIRONMENT • HIGHLY FRAGMENTED INDUSTRY • VERY COMPLEX COMPETITIVE STRUCTURE • FAST CHANGING INDUSTRY/MARKET DYNAMICS • INCREASINGLY GLOBALIZED INDUSTRY

  4. UNIQUE CHALLENGES • EXTREMELY PRICE COMPETITIVE ENVIRONMENT • HIGH INDUSTRY FRAGMENTATION • HUGE INFLUX OF COMPETITORS FROM ALL DIRECTIONS • HIGHLY COMPLEX AND DIFFERENT OWNERSHIP STRUCTURE & INVESTOR EXPECTATION • ENTREPRENEURIAL SPIRIT & CREATIVITY

  5. UNIQUE CHALLENGES • HIGHLY FRAGMENTED INDUSTRY • ONLY 2-3 PLAYERS WITH NATION-WIDE NETWORK • OVER 1,000 MANUFACTURERS NATION-WIDE • REVENUE RANGES BETWEEN US$2.0 MILLION TO US$120 MILLION • 95% OF PLAYERS HAVE REVENUE LESS THAN US$25 MILLION

  6. UNIQUE CHALLENGES • VERY COMPLEX COMPETITIVE STRUCTURE • HIGHLY DIVERSE OWNERSHIP STRUCTURE AND INVESTOR EXPACTATIONS • SOE (STATE OWNED ENTERPRISE) • POC(PRIVATELY OWNED COMPANIES) • FIE(FOREIGN INVESTED ENTERPRISES) • TOE(TOWNSHIP OWNED ENTERPRISES) • SWU(SOCIAL WELFARE UNIT), ETC.

  7. UNIQUE CHALLENGES • FAST CHANGING INDUSTRY/MARKET DYNAMICS • MANY NEW PLAYERS ARE CONTINUOULSY ENTERING THE MARKET • PAPER MAKERS HAVE STARTED TO BUILD A VERTICALLY INTEGRATED NETWORK • DEMAND FOR PACKAGING WILL CONTINUE TO GROW AT A HIGH SPEED • INCREASINGLY GLOBALIZED INDUSTRY

  8. UNIQUE OPPORTUNITIES • EXTREMELY COST COMPETITIVE ENVIRONMENT • IS OFFERING INNOVATIVE & COST COMPETITIVE COMPANIES GREAT OPPORTUNITY TO GROW • HIGHLY FRAGMENTED INDUSTRY • OFFERS SMART FIRST MOVERS THE WINDOW OF OPPORTUNITY TO BUILD STRONG PRESENCE QUICKLY

  9. UNIQUE OPPORTUNITIES • COMPLEX COMPETITIVE STRUCTURE • GIVES THOSE WHO CAN TAKE ADVANTAGE OF THE DIVERSE STRUCTURE A CHANCE TO OUT-MANEUVER THE MORE “RESOURCE RICH” PLAYERS • FAST CHANGING INDUSTRY/MARKET DYNAMICS • OFFERS NIMBLE PLAYERS GREAT TERRAIN TO FIGHT THE “GIANT” AND WIN

  10. UNIQUE OPPORTUNITIES • INCREASINGLY GLOBALIZED INDUSTRY • CHINA’S PACKAGING INDUSTRY IS INTEGRATING WITH THE REST OF THE WORLD VERY RAPIDLY BY • SOURCING GLOBALLY • MANUFACTURING FOR MULTINATIONALS IN CHINA, AND • EXPORTING PRODUCTS AROUND THE WORLD • THIS TREND OFFERS GLOBAL PLAYERS OPPORTUNITIES TO LEVERAGE THEIR OWN EXPERTISE TO BUILD ALLIANCES AND GROW IN CHINA QUICKLY • PERFECT ENVIRONMENT FOR FAST MOVING, PRAGMATIC & ENTREPRENEURIAL COMPANIES TO SUCCEED

  11. CONCLUSION • CHINA’S CORRUGATED INDUSTRY IS INDEED GROWING AT A VERY HIGH SPEED. BUT THE MARKET IS STILL HIGHLY FRAGMENTED AND UNEVEN IN THE LEVEL OF OVERALL DEVELOPMENT • CHINA’S PACKAGING COMPANIES HAVE MANAGED TO BECOME HIGHLY COST COMPETITIVE BY LEVERAGING • DIVERSE OWNERSHIP/INVESTOR STRUCTURE • ENTREPREUR’S CREATIVITY & COMPETITIVE SPIRIT • OTHER LOW COST FACTORS UNIQUE IN CHINA

  12. CONCLUSION • GLOBAL PLAYERS NEED TO DEVELOP A SOLID, AGGRESSIVE STRATEGY TO COMPETE IN A MARKET THAT IS STILL QUITE DIFFERENT BUT HIGHLY PROMISING • GLOBAL PLAYERS NEED TO CLEARLY IDENTIFY THEIR OWN STRENGTHS VS. THE CHINA MARKET’S NEEDS AND SEEK COMPLEMENTARY PARTNERS IN CHINA TO BUILD ALLIANCES AND GROW SUCCESSFULLY THANK YOU!

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