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Tom Haugen Presentation Presentation Transcript

  • 1. Washington, D.C. The World After Quotas Li & Fung Limited October 13 th , 2005
  • 2. Li & Fung Background
  • 3. Li & Fung Today
    • Founded in 1906, close to 100 years of history
    • Headquartered in Hong Kong
    • Specialist in the sourcing of both private label and branded consumer goods
    • US $6 billion in shipping
    • Market cap approx US $6 billion
  • 4. The Li & Fung Group Li & Fung (1937) Ltd. Li & Fung (Trading) Ltd. Product Sourcing Li & Fung (Retailing) Ltd. Retailing Li & Fung (Distribution) Ltd. Marketing & Logistics Publicly Listed MSCI Hong Kong Index Hang Seng Index Privately Held Publicly Held
  • 5. The Li & Fung Group
    • IDS Group
    • Marketing and logistics
    • 9 markets in Asia and Greater China
    • 40 distribution centers, 3m sqf
    • 300 MNC principals
    • 6,000 staff
    • Turnover US $ 1 billion
  • 6. The Li & Fung Group
    • Li & Fung Retailing Group
    • Circle K operated by Convenience Retail Asia
    • Toys R Us Asia
    • Branded Lifestyle - Ferragamo, Country
    • Road, Frette, Mango
    • 2,000 staff
    • Turnover US $ 300 million
  • 7. The Li & Fung Group
    • Li & Fung Trading Group
    • Sourcing
    • 66 Offices in 38 countries and territories
    • 7,200 staff
    • Turnover US $ 6 billion
  • 8. Coordinated Global Network 66 Offices in 38 Countries and Territories Americas (9 locations) New York City Boston San Francisco Dominican Republic Guatemala Honduras Guadalajara Mexico City Nicaragua Europe/Mediterranean (13 locations) London Huddersfield Amsterdam Romania Florence Turin Tunis Istanbul Denizli Izmir Oporto Jordan Cairo Africa (3 locations) Durban Mauritius Madagascar South Asia (11 locations) Bangalore Chennai Mumbai New Delhi Karachi Lahore Dhaka Colombo Sharjah Bahrain Southeast Asia (9 locations) Singapore Bangkok Shah Alam Manila Hanoi Ho Chi Minh City Jakarta Phnom Penh Saipan East Asia HONG KONG - Head office (21 locations) Shanghai Dalian Nanjing Beijing Seoul Qingdao Taipei Tokyo Hepu Ningbo Macau Liuyang Huizhou Dongguan Longhua Guangzhou Shenzhen Zhongshan Shantou Zhanjiang
  • 9. The Evolution of Supply Chain Management The Supply Chain Manufacturing Control Shipping Control Factory Sourcing Raw Material Sourcing Product Development Consumer Needs Consumer Wholesaler/ Retailer Product Design Local Forwarding Consolidation Forwarder Consolidation Customs Clearance
  • 10. Sourcing Apparel in a Quota Free World …someday!
  • 11. The Reality of 2005
    • The China Impact
  • 12. U.S. Imports January – July (Million M2)
    • Square Meter Basis
    • 2004 2005 Change
    • World 11,018 12,443 13%
    * Data taken from The office of Textiles and Apparel R.O.W. 9,481 9,029 (5%) China 1,537 3,414 122%
  • 13. U.S. Imports January – July (Average Unit Price)
    • Price Deflation
    • 2004 2005 Change
    • World $3.22 $3.12 (3%)
    * Data taken from The office of Textiles and Apparel China $3.04 $2.66 (13%) R.O.W. $2.94 $3.29 12%
  • 14. The Reality of 2005
    • The China Impact
    • The Winners and Losers
  • 15. The Winners
  • 16. U.S. Import Winners January – July (Million M2) * Data taken from The office of Textiles and Apparel 13% 12,443 11,018 World 29% 476 369 India 13% 464 412 Indonesia 18% 266 225 Sri Lanka 20% 613 512 Bangladesh 24% 142 115 Jordan Change 2005 2004
  • 17. …The Losers
  • 18. U.S. Import Losers January – July (Million M2) * Data taken from The office of Textiles and Apparel -46% 130 237 Macau -65% 12 34 Oman -90% 2 23 Maldives -71% 4 12 Fiji -79% 18 84 Russia -17% 146 176 Turkey -9% 1026 1123 Mexico -12% 57 64 Lesotho -23% 17 22 Mauritius -34% 202 304 Taiwan -37% 246 392 Hong Kong -43% 179 311 Korea Change 2005 2004
  • 19. The Reality of 2005
    • The China Impact
    • The Winners and Losers
    • The New “Quotas”
  • 20. The New “Quotas”
    • Chinese Restraint Mechanisms
    • Anti-Dumping
    • Bi-Lateralism
  • 21. Chinese Restraints
    • Safeguard mechanisms in use
    • Anti-dumping beginning to surface
    • Quota extension in negotiations
  • 22. Bi-lateralism
    • Free or almost free trade
    • Breakdown of the multi-lateral world
    • Challenges created
  • 23. Approved Trade Agreements (Apparel Terms)
    • NAFTA – Yarn and fiber forward.
    • AGOA – 3 rd country fabric qualifies for most countries through 9/08.
    • CBPTA – Generally fabric and/or yarn must be formed in the US.
    • Andean Pact – Generally fabric and yarn forward.
    • Australia/Singapore/Chile – Yarn and fiber forward.
  • 24. QIZ
    • Egypt
    • Jordan
  • 25. Pending Agreements
    • CAFTA – Approved by Congress but not implemented.
    • Morocco – Approved by Congress but not implemented.
    • Bahrain – Negotiated but not yet approved.
  • 26. Negotiations in Progress
    • Panama
    • Thailand
    • Southern Africa Customs Union
    • United Arab Emirates
    • Oman
  • 27. Challenges to be faced
    • Uncertainty continues in China
    • Infrastructure improves elsewhere
    • Bi-lateral agreements create unknown opportunities
  • 28. Washington, D.C. The World After Quotas Li & Fung Limited October 13 th , 2005