Dksh annual-review-2009

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Dksh annual-review-2009

  1. 1. Annual Review 2009Think Asia. Think DKSH.
  2. 2. Contents 2 Our services 64 Business organization Managing the entire value chain Our structure 4 Market Expansion Services 66 Our Board of Directors Enabling companies to grow Guiding the overall strategy and direction of DKSH 6 DKSH at a glance 67 Our Executive Board Our profile Ensuring the implementation of our strategic goals10 What is important to us 68 Our corporate services Our corporate values Supporting the Business Units11 DKSH strategy for growth 70 Diversity is us Our vision A long-standing tradition12 Managing the flow of services and products 72 In and for Asia Turning market insight into strategic advice Committed to local communities14 The year 2009 reviewed 76 140 years of experience To our shareholders and business partners Our history22 Business Unit Consumer Goods 80 Symbolizing the business Market insight combined with customized solutions Our heritage34 Business Unit Healthcare 82 Ready for the future Commitment to healthcare excellence Strong foundation for growth44 Business Unit Performance Materials 84 DKSH worldwide Unmatched global sourcing network and industry Our offices application expertise54 Business Unit Technology Total technology solutions for expansion
  3. 3. Managing the entire value chainOur servicesWe offer a broad range of customized andintegrated services to manage the entirevalue chain for our business partners: fromsourcing, research and analysis, marketingand sales, distribution and logistics,to after-sales services.
  4. 4. Research Marketing Distribution After- Sourcing and and and Sales Analysis Sales Logistics Services› Global Sourcing › Feasibility Studies › Market Research › Importation › Application› Scouting for › Market Information › Field Marketing › Customs Handling Engineering Suppliers and Trends › Product › Product Registration › Installation/› Supplier Auditing › Applications Management › Regulatory Commissioning› Supplier Research and › Marketing Compliance › Training Certification Support › Brand Building › Warehousing › Customer Service› Quality Assurance › Technical and › Public Relations › Stock › Repairs and› Compliance Innovation Support › Promotion Management Maintenance Management › Product Management › Vendor Managed › Technical Support Development › Merchandising Inventory › Standbysee pages 20 / 21 › Product Licensing/ › Channel › Co-Packing Maintenance Assistance Management › Transportation Programs › Customer-Specific › Category and Delivery › Warranty Services Product Adaptation Management › Order Fulfillment › Quality Assurance and Packaging › Key Account › Invoicing and Control Solutions Management › Cash Collection › End-Consumer › Sales › Information Communication see pages 32 / 33 › Order Taking Processing and Processing › KPI Reporting see pages 62/ 63 › Stock Reporting › Market Perception and Planning Surveys › Market Feedback › Fairs/Exhibitions/ see pages 52 / 53 Seminars see pages 42 /43
  5. 5. Enabling companies to growMarketExpansionServicesWe help companies to grow their business innew and existing markets. We expand theiraccess to knowledge, their sourcing base,their revenue opportunities, and their marketshares. Providing business partners with acomprehensive package of services to reachtheir individual goals is what we call MarketExpansion Services.4
  6. 6. No. 1Market Expansion Services Group with a focus on Asia. 540 business locations We help companies to grow in existing markets in Asia Pacific and to expand into new ones. 35 20 countries business locations in Europe and the Americas 21,000 50 specialized staff nationalities Top 20 of Switzerland’s companies – ranked by sales and numbers of employees In 2009, DKSH Group’s Total Sales amounted to CHF 8,576 million. 5
  7. 7. DKSH at a glanceAs the No. 1 Market Expansion Services Group with a focus on Asia,we help companies to achieve their growth targets.What we do Any company wishing to expand its busi-DKSH is the world’s leading Market Expan- ness in and with Asia should think ofsion Services provider with a focus on Asia. DKSH first. Because of our long historyWe are a company with Swiss roots, doing in the region we are deeply rooted inbusiness in and with Asia for more than many communities throughout Asia, and140 years. We help companies to grow in have established a vast network of busi-existing markets and expand into new ness and personal relationships. Our localones. To achieve this we offer a compre- knowledge, combined with our worldwidehensive package of services that includes sourcing ability, allows us to identify neworganizing and running the entire value market opportunities for our clients andchain for any product, from sourcing, re- customers.search and analysis, marketing and sales, Our company is organized into four spe-distribution and logistics, to after-sales cialized Business Units: Consumer Goods,services. Healthcare, Performance Materials, and We provide industry expertise and on- Technology, which guarantee expert han-the-ground logistics as well as tailor-made dling of even the most specialized prod-services for our clients and customers. Our ucts and brands. We know our clients’leading position as a Market Expansion products as if they were our own, and canServices provider is based on our ability therefore bring the right products to theto deliver everything our business part- right places and customers at the rightners need to grow their businesses in their time – every time.chosen markets.6 Market Expansion Services
  8. 8. Our service is aimed at helping business partnersto open up new markets.“Rationality has come back,” Weltwoche, January 1, 2009 Total Sales by Business Unit Total Sales by region EBIT by Business Unit in % in % proportional 49.3 Consumer 43.3 Thailand Consumer Goods 16.7 Other Asia Goods 36.6 Healthcare 14.4 Malaysia Healthcare 8.2 Performance 13.8 Greater Performance Materials China Materials 5.9 Technology 4.9 Japan Technology 3.6 Singapore 3.3 Europe and the AmericasKey results 2009 followed by Business Unit Healthcare, of cost and efficiency issues, serves us wellIn 2009, DKSH generated Net Sales of which accounted for roughly 36.6% of in good as well as bad economic times.CHF 6,500 million. We employed 21,000 our business. Business Unit Performancespecialized staff from 50 nationalities, op- Materials’ share of Total Sales was 8.2%,erating in 35 countries and 540 business and Business Unit Technology’s 5.9%.locations in Asia Pacific, and 20 locations With regard to EBIT contributions, Con-in Europe and the Americas. Ranked by sumer Goods contributed most, followedsales and number of employees, DKSH is by Healthcare, Performance Materials, andone of Switzerland’s top 20 companies. Technology. Group EBIT in 2009 amounted to Thailand remains the largest singleCHF 128 million, down 14% from CHF 149 market, with Total Sales of CHF 3,716 mil-million in 2008. Profit After Tax (PAT) was lion, representing 43.3% of our sales vol-just 3.4% below 2008. Total Sales in- ume, followed by Malaysia with 14.4%creased by CHF 200 million from 2008 to and Greater China with 13.8%. Overall,CHF 8,600 million – an excellent result in Asia generated nearly 97% of our saleslight of the difficult business and eco- volume.nomic conditions that prevailed for much Our solid performance in an increas-of 2009. Equity rose in 2009 to CHF 925 ingly challenging market environmentmillion, up from CHF 872 million in the clearly demonstrates that our businessprevious year. model, based on high diversity in terms of Our largest Business Unit Consumer geography and industries, together withGoods contributed 49.3% of Total Sales, proactive and very hands-on management 7
  9. 9. Providing our clients and customers – no matter what their size – with a comprehensive packageof tailor-made services to reach their goals is what we call Market Expansion Services.Market Expansion Services distribution, and after-sales services. Mar-Market Expansion Services goes far be- ket Expansion Services is a business that isyond offering individual services. To a very constantly breaking new ground, wherelarge extent, it is about the integration of experience and entrepreneurial spirit unitemany different services. Our business is with state-of-the-art processes and 21st-much more than the exchange and pro- century information management. It is anmotion of goods. It is about a service phi- efficient and effective approach that en-losophy that takes profound responsibility ables businesses to grow and succeed infor the goods and brands of our clients. our global economy. Furthermore, it is about gathering datafrom our hundreds of thousands of cus-tomers and translating this into highly de-tailed, up-to-date market information thathelps our business partners succeed. Wetake a proactive approach to handlingproducts, building brands, and expandingbrand equity, always working in the bestinterests of our clients and customers in aspirit of true partnership. Our market insights and pan-regionalnetwork combine to provide long-termsolutions to sourcing, marketing and sales,8 Market Expansion Services
  10. 10. Raw materials Instruments Equipment Customers Products Clients Consumer goods Healthcare products CustomersAs a service provider, we bring our clients’ products to our customers, forming a trusted link between our business partners to the benefit of all.Responding to our business ufacturers want to process the products storage costs, or best customizing productspartners’ needs we provide, for example raw materials, or to customers’ needs, accurate, in-depth,At DKSH, our business partners are either use them in their own production. Resell- and extensive market knowledge is, theseclients or customers, depending on their ers such as supermarkets, department days, simply imperative.position in the manufacturing and distri- stores, luxury and apparel boutiques, Our deep understanding of our cus-bution chain, and the services we provide doctors, hospitals, or pharmacists want to tomers’ needs empowers us to translateto them. resell the products we provide. Strategi- our clients’ brand strategies into a local Our clients – manufacturers of fast cally they want to increase their sourcing context with skill and precision.moving consumer goods, lifestyle and base, market shares, and revenue oppor- We are a trusted link between our cli-luxury products, pharmaceuticals, spe- tunities. We help our customers get the ents and customers, ensuring their prod-cialty chemicals, ingredients, advanced best products and brands at the best prices, ucts successfully reach the right markets.machinery, or technical equipment – wish as well as provide them with access to Whatever their strategic objectives, we atto sell their products. Strategically they knowledge and market understanding. DKSH provide them with all the necessarywant to grow their business by increasing Our clients today need to be able to access to knowledge, advice, relationships,sales, enhancing efficiency and margins, know everything: from the number and and on-the-ground logistics.or by launching into new markets. We location of retail outlets to the shelf-life ofsupport our clients by bringing their prod- their products, how much stock remains,ucts to Asia, Europe, and the Americas, the latest trends influencing consumers’where we market, sell, and distribute them, behavior, the impact of price changes onand provide after-sales services. customers, advertising and specialized Depending on their business, our cus- marketing campaigns. Whether it is for de-tomers buy or resell clients’ products. Man- termining advertising budgets, reducing 9
  11. 11. What is important to us tic Pra hen gm ut end able ht- We ar and e ha p raig at A de t com act nd e n a s ay ic i dw mo w a r s-o n and e a ar s fo ct ith se n w W en r Our d riv e n We ta ke corporate n e u ri a l p ir it act with s erio u s ith P a s si o values rin g s s e lf - pio a ct w pe ly a ion a re n ee p as d op pre nd an na e s le W te a We tre tak e c harg e En a n d ac t re s u l t s- o ri e n t e d C o m m it t e dOur corporate values up to our corporate values, which reflect people practice every day: authentic com-In a world where it is all too easy to copy our unique culture and are reinforced in mitment to supporting our partners’ busi-new products, processes, and technolo- all aspects of our business. Our values ness success.gies, true competitive advantage stems guide our priorities and our behavior, in- Like the founders of DKSH, we adopt anot just from organizational capabilities, spiring us to deliver the best possible ser- pragmatic, entrepreneurial spirit and arebut requires a corporate culture that is vices to our clients and customers, and passionate about what we do. The DKSHhard to imitate or reproduce. We believe helping them to grow their businesses. Group is privately held, and fourth-gener-that having a unique corporate culture is DKSH’s reputation is based on our au- ation descendants of the founding familiescrucial to achieving the competitive ad- thentic, pragmatic, and entrepreneurial remain active on the Board of Directors.vantage that leads to sustainable business approach to finding tailor-made solutions. Majority-owned by the Diethelm Kellersuccess. But what constitutes corporate Our commitment and passion drive the Group, DKSH is a financially stable globalculture? A key requirement is the exis- sustainable business results we achieve player, securely founded on time-proventence of meaningful and actionable cor- for our business partners and ourselves. principles.porate values. In building true partnerships that last, To achieve our vision of being the we use the best of both worlds – East andworld’s leading company in Market Expan- West – for the benefit of our clients andsion Services, we consistently strive to live customers. DKSH stands for what our10 Market Expansion Services
  12. 12. DKSH strategy for growthOur vision is to be known as the world’s Increase operational efficiencyleading company in Market Expansion We continuously improve the efficiencyServices with a focus on Asia. Anyone and effectiveness of our processes. Thethinking of growing their business in or quality of our services is based on bestwith Asia should think of DKSH first. To practices and standards throughout ouraccomplish this we drive a strategy for entire organization. An efficient supplygrowth that continuously increases our chain as well as leveraged synergies acrossmarket share and at the same time helps all our Business Units and countries allowsour business partners expand their busi- us to fulfill the diverse requirements ofnesses. the industries and communities we serve. The cornerstone of our strategy is thecontinuous improvement of our success- A reliable strategic business partnerful business model. We stick to what we Our strategy for growth results in a broaddo best – or in other words, we do more range of services and solutions that areof the same … and we do it even more tailored to the unique needs of our clientsefficiently! The strategy consists of three and customers. Relying on our core com-main areas that assist us in reaching our petencies provides the following benefits:vision: • A financially stable and dependableGrow existing markets partner who has been at home in Asiaand Business Units for more than 140 years, reliably safe-We focus on growing existing markets, as guarding your business interestswell as existing Business Units. Since wehave a history of over 140 years of doing • A global network of experts and thebusiness successfully in and with Asia, our ability to adapt to the businesses webusiness partners fully capitalize on our serve in any local marketbroad knowledge of local markets andculture, our infrastructure, and our lead- • A comprehensive package of servicesership position in the region. along the entire value chain – tailored to your needsStrengthen service offeringsWe continually strengthen and expand • Services and infrastructure from a singleour range of service offerings across the source, meaning lower cost, enhancedentire value chain and Business Units. To transparency, and greater accountabilityensure the long-term success of our busi-ness partners, we constantly deliver more • A partner who proactively works invalue-added solutions that give them a clients’ and customers’ interests, pos-competitive advantage. sessing the expertise to provide strate- gic advice and on-the-ground logistics to “make things happen” 11
  13. 13. Managing the flow of servicesand productsCompanies turn to us to expand theirbusinesses in new or existing markets.We manage their products in Asia Pacific,Europe, and the Americas, with a focuson Asia. As a strategic partner we safe-guard the interests of our business part-ners by providing integrated services andsolutions customized to fit their specificneeds. We support our clients by bringingtheir products to Asia, Europe, and theAmericas, where we market, sell, and dis-tribute them. We help our customers getthe best products and brands at the bestprices and provide them with access toknowledge and market understanding.Turning market insightinto strategic adviceTo cover the diversity of our business part- Europeners’ industries, we are organized into and the Americasfour Business Units: Consumer Goods,Healthcare, Performance Materials, andTechnology. Each highly specialized Busi-ness Unit operates worldwide as part of avast network of experts covering the en-tire value chain. Backed by the largestSAP application in Asia, we manage hun-dreds of thousands of business transac-tions every day. We closely monitor mar-ket activity and convert information intostrategic advice for our business partners,providing them with a competitive edgeneeded to succeed in today’s global econ-omy. This is what makes us the No. 1 inMarket Expansion Services.We operate in 35 countries andout of 540 business locations acrossAsia Pacific as well as 20 locationsin Europe and the Americas.For all addresses see pages 84- 86.12 Market Expansion Services
  14. 14. C o n su m e r G o o d s H e a lt h c a r e Asia Inner-Asia Pacific distributionPerformance Materials Technology 13
  15. 15. To our shareholdersand business partnersThe year 2009reviewedDear Shareholders results, seizing the opportunities offered aged company, our strong cash flowDear Business Partners by a difficult environment and improving allowed us to achieve a net-debt positionSince DKSH’s establishment in 2002, the their market shares. The sharp fall in de- of zero, which is extremely valuable in thecompany has consistently reported double- mand for luxury products left its mark on current environment.digit growth in profitability. At the begin- our Luxury & Lifestyle business though, Since the merger that establishedning of 2009, however, with the business and Business Unit Performance Materials DKSH in 2002, our development has beenenvironment affected by deep recession also suffered, chiefly due to the economic a tremendous success story, based on re-in many countries, it was clear that this downturn in Europe, which badly affected inventing the trading company businesswould not be another record year. Never- our customers in the automotive, chemical, model and creating a distinctive new cat-theless, we are pleased to report that construction, and food industries. Business egory: Market Expansion Services. Our ex-our Profit After Tax (PAT) amounted to Unit Technology experienced a difficult pertise is supported by an extensive net-CHF 85 million, down just 3.4% on 2008. year, due to tough market conditions and work with an unrivalled infrastructure andIf we look only at our Asian business, we reduced or delayed capital expenditure on-the-ground logistics, allowing us towould have had a new record year, with and industrial spending. help companies to grow their business inalmost all our operations in Asia report- and with Asia. Our comprehensive servic-ing profit figures well ahead of our 2008 Resilient business model es and products extend from sourcing,results. Unfortunately, the decline in our Nevertheless, we exploited the opportu- marketing, and sales, to distribution andEuropean activities due to the economic nities that come with every crisis, and after-sales services.environment could not be fully compen- achieved a larger overall market share. We The numbers reflect our leading mar-sated by our success in Asia. Even so, at a benefited from the strength of our highly ket position: since 2002, the value of ourtime when global trade dropped by 12%, specialized yet broadly diversified busi- transactions has grown by 83%, our prof-the largest downturn since World War II, ness model, which enabled us to absorb its are up by 125%, we have createdwe achieved an increase of 4.8% in Trans- the significant fluctuations experienced in 7,700 new jobs, and increased our busi-action Value, reaching CHF 8,600 million. several sectors last year. High diversifica- ness locations by 133% to 560. For our four Business Units, 2009 in- tion in terms of geography and industries, A testament to our attractive indus-cluded both successes and challenges. combined with proactive, hands-on man- try position is the involvement of PierreOur two largest Business Units, Consumer agement of cost and efficiency issues, Mirabaud, well-known in the Swiss pri-Goods and Healthcare, achieved excellent served us well. As a financially well-man- vate banking world and until September14
  16. 16. Adrian T. Keller, Chairman, and Dr. Joerg Wolle, President & CEO of DKSH Group. 15
  17. 17. 2009, President of the Swiss Banking of Country Operations & Business Pro- ment, acquisition opportunities are reason-Association, as a new shareholder since cesses, a new position created at Executive ably priced. Supported by a healthy balanceearly 2010. Board level. In his new function, Bernhard sheet, we are excellently positioned to take Schmitt is responsible for coordinating all advantage of both organic growth op-Well positioned for growth country-related issues and for ensuring portunities as well as acquisitions.In pursuit of our goal to become known that we realize operational synergies and In early 2009, we acquired Dasico A/S,as the No. 1 in Market Expansion Services, improve operational excellence, especially a specialty chemicals distributor, whichwe held an extensive strategy review dur- in country infrastructures and supply chain greatly enhances our position in Scandi-ing 2009 with a consulting company spe- management. navia. The acquisition lets us serve a broadcialized in this field. This review confirmed Also in line with our strategy for growth, range of customers in the pharmaceutical,that despite – or even because of – the dedicated business development func- food and beverage, agrochemical, andeconomic crisis there are still plenty of tions were created in all Business Units to specialty chemicals industries through ouropportunities for further expansion in our accelerate and professionalize business global sourcing network and in-depth in-home markets. development across countries. dustry expertise. As a result of this assessment, strate- In addition, at the beginning of 2009,gies for growth were developed for the Strategic alliances and acquisitions we acquired Voltas Ltd., a leading com-Group and all Business Units, which are A vital component of our business model pany in specialty chemicals and food in-currently being implemented. This inde- is the sheer breadth of our growth poten- gredients in India, and formerly the chem-pendent outside-in view provided valu- tial, which is based on the extension of icals trading division of the TATA Group.able inputs that are helping us to set our existing partnerships, the rollout of suc- This acquisition significantly strengthenscourse for future development. cessful relationships from one country to our Business Unit Performance Materials The focus of our strategy for growth another, and the development of new in this growth market.is on our current geographic footprint business partners. For example, in 2009 A further important development inand Business Units, leveraging internal we extended our cooperation with Tipco 2009 was the establishment of our jointstrengths and organic growth in combi- Foods, a producer of ready-to-drink bev- venture with Smollan, a world-leadingnation with strategic bolt-on acquisitions erage products. After working together field marketing company. This will help usand partnerships. In addition, we will en- for 15 years in Thailand, our relationship to enter the field marketing arena and tohance our service and solution competence will now include Vietnam. A similar exten- expand our range of value-added services.through strengthening and extending our sion to Vietnam with another Thai com- It illustrates our recognition of the globalservice offering. We will also improve the pany was accomplished with Taokaenoi trend towards dedicated field marketingcoordination of country-related matters Food, a producer of fried seaweed snacks. services, and our commitment to meetingacross the Group, and increase process These examples demonstrate our grow- our business partners’ desire to outsourceefficiency and effectiveness. ing success in helping not just Western these activities to specialized companies. but also Asian brands to access new mar-Strengthened key functions kets in Asia. Trend to outsource activitiesTo achieve the goals in our strategy for While the DKSH strategy for growth in Asiagrowth and drive our development to the centers on growing from within through Many companies today question if it makesnext stage, we are investing in strengthen- business development and leveraging suc- sense to maintain their own subsidiariesing key functions within our organization. cess, we will also pursue bolt-on acquisi- in Asian markets given that there are bet- In September 2009, Bernhard Schmitt tions in strategic growth areas. Against the ter and less costly alternatives. As a ser-was appointed Executive Vice President backdrop of a difficult economic environ- vice specialist and outsourcing partner,16 The year 2009 reviewed
  18. 18. Our business model has proven both robust and crisis-resistant.We continue to be at home in the most promising and rapidlygrowing markets.“We are less exposed,” Handelszeitung, May 13 -19, 2009DKSH is perfectly positioned to provide in Thailand. This positions us as the Market continue to extend our position as the lead-such alternatives. Expansion Services provider for its lubri- ing Market Expansion Services provider in In April 2009, we formed a partnership cants business, and generates enhanced Asia.with Oerlikon Systems, a high-quality pro- value-added services for our business part- By the end of the first quarter of 2010,vider of production equipment for the ners in the region. The integration, with we had concluded an additional three ac-semiconductor, data storage, and nano- 27 sites across Thailand and 225 special- quisitions that allow us to expand in stra-technology industries. DKSH took over all ists, will be completed in 2010. tegic growth areas. The takeover of Chiaotheir sales and after-sales operations in The common thread running through Tai Logistics Corporation, Taiwan’s leadingChina and Taiwan, and now offers the re- the Oerlikon Systems, Michael Weinig, and logistics company, makes us the largestgion’s most technologically advanced pro- Shell Distribution Company transactions is full-service consumer goods distributor induction equipment for PVD semiconduc- that they are all major multinational com- Taiwan, strengthening our Business Seg-tors. By the end of 2009, the acquisition panies that had existing operations in Asia ment Fast Moving Consumer Goods inhad proven itself, with equipment sales of but decided to sell their sales and distribu- Greater China. Chiao Tai’s excellent clientover CHF 25 million. tion infrastructures to DKSH. Our ability to portfolio is the ideal complement to our Early in 2009, DKSH Japan took over seamlessly integrate their operations into existing network, and allows us to pro-the Japanese business of Michael Weinig a wider platform and to provide them vide truly regional solutions to our busi-Germany, the market leader in solid wood with better services, less complexity and ness partners.processing machinery and equipment. This risk, and reduced fixed costs, was key to We have also taken over Hagemeyer-acquisition has allowed DKSH Japan to ex- their decisions. Cosa Liebermann Group, the last stand-tend its product portfolio and add com- alone trading house with Swiss roots,plementary technology solutions. The partner of choice in 2010 which exclusively focuses on the market- More recently, we acquired the Shell With our anti-cyclical investment approach ing and distribution of quality brandedDistribution Company, a subsidiary of Shell and clearly defined growth strategy, we consumer goods in the Asia Pacific region.DKSH Group* money figures in CHF million (in rounded figures) 2005 2006 2007 2008 2009Total Sales ** 7,275 7,945 8,561 8,185 8,576Net Sales 4,878 5,695 6,282 6,447 6,549EBIT 101 115 140 149 128PAT 53 59 83 88 85Assets 2,234 2,499 2,627 2,657 2,586Equity 585 636 679 872 925Specialists 20,482 21,361 21,888 21,552 20,744* comparative figures have been adjusted to reflect discontinued operations ** equals Transaction Value 17
  19. 19. This acquisition strengthens our Luxury & we took a further major step towards our ing houses into the world’s leading pro-Lifestyle operation by expanding our pres- goal with the renaming of organizations vider of Market Expansion Services in Asia.ence in Korea, Taiwan, and Hong Kong, that still carried legacy names in Japan, The text describes how to do business inand by adding Guam and Saipan to our Thailand, Myanmar, and Vietnam. Compa- Asia and offers an outlook on the world’sfootprint. It reinforces Luxury & Lifestyle’s nies in Laos, the Philippines, and Singapore most important growth market. The bookposition as the leading independent brand were renamed in early 2010. was highly ranked on the Swiss bestsellerbuilder and services provider for the mar- The consistent DKSH appearance en- list for several weeks, enabling us to pres-keting, sales, and distribution of premium ables individual country operations to le- ent our company and Market Expansionluxury items in Asia. verage the global synergies of the entire Services to a broader public. Another significant acquisition at the DKSH Group. With all the branding basicsbeginning of 2010 was Biolife Sdn Bhd, a in place, we can now start to actively pro- Fostering talent developmentmajor vitamin and food supplement prod- mote our new positioning and convey our DKSH has always recognized that peopleucts company in Malaysia, strengthening messages on a global level. are our major asset. High-quality training,our Business Unit Healthcare. DKSH has We have also refined our corporate management and talent development, asbecome the owner of all Biolife brands values to bring them into line with our well as networking opportunities, are es-and now controls access to a key health- brand attributes and strategy for growth. sential to our success. With this in mind wecare market segment in Malaysia and to a Our corporate values – authentic, prag- launched our new in-house center for ex-platform for further business growth. matic, entrepreneurial, committed, and ecutive training, the DKSH Fantree Acade- We are pleased with the development passionate – set the standards for our be- my, in September 2009, in Singapore.of our acquisitions in 2010 so far and con- havior every day, worldwide. They give An equally important initiative to at-fident of our ability to seamlessly integrate clear guidance on what is important to us tract and retain top talent was the devel-additional companies that complement and how we work together. opment of a new employer value proposi-our organic growth. One of the key projects to strengthen tion, which gives our company a clear and A key outcome of our strategy review brand awareness and to communicate our consistent positioning in the talent market.is a clear commitment to focusing on leadership position in Market Expansion This articulates the employee qualities thatour core competencies. Consequently, we Services was the launch of our new client are important to us, and at the same timehave started to divest non-core and non- magazine expand – DKSH’s magazine for gives tangible evidence of how DKSH sup-scalable activities, such as our joint ven- Market Expansion Services at the begin- ports its specialists.tures in China in animal nutrition. Further ning of 2010. This unique new knowledgedivestments are underway. platform for Market Expansion Services Improved internal processes offers valuable insights into our industry. While fostering the development of ourCommunicating a unified brand In addition, we launched our new people, we are also focusing on the im-To ensure that our brand is recognized website in fall 2009, which supports our provement of our internal operations. Wearound the world and clearly communi- unified, global appearance and provides achieved a key milestone in the standard-cates the message of a unified, global even more effective contact with business ization of our business processes in 2009organization, we embarked on the GO! partners. when we completed the global rollout ofbranding project two years ago. In 2009, We are also proud to report the 2009 Pegasus, our SAP-based Global Enterprisethe implementation of our new corporate publication of Dr. Joerg Wolle’s first book Resource Planning template. This state-design was completed in all areas of ap- Expedition into Far Eastern Markets. Based of-the-art IT infrastructure is a strategicplication. Our unified brand demonstrates on the DKSH success story, it documents cornerstone of our competitive positionthat we operate as one company. In 2009, our evolution from three pioneering trad- as the No. 1 Market Expansion Services18 The year 2009 reviewed
  20. 20. We serve more than 550,000 customers every day through 560 businesslocations in Asia Pacific, Europe, and the Americas: a comprehensive networkand infrastructure unique in size and depth.“Rationality has come back,” Weltwoche, January 1, 2009provider, as it offers our customers and Moving forward with limited risk, and without incurringsuppliers substantial efficiency gains. 2009 was a challenging year for everyone high fixed costs. We will continue to sup- Throughout 2009, risk workshops and in business. With most of our business lo- port them to capitalize on new and excit-reviews were conducted by a specialist cated in the world’s premier growth mar- ing opportunities.consultant in key countries for all four Busi- kets, we were able to compensate for the Our accomplishments in 2009 are a di-ness Units and with our Executive Board decline in certain other regions and indus- rect reflection of our dedicated and pas-members. These activities led to clearly de- tries. Our ability to deliver good results de- sionate team. Our 21,000 employees infined risk mitigation plans, which will be spite one of the worst economic crises in 35 countries are deeply committed to theupdated regularly. living memory is testament to the strength clients and customers they serve. We thank of our business model. Throughout our each and every one of them for their dedi-Investment in a strong company’s 140-year history, we have often cation. We also extend our gratitude toinfrastructure thrived in challenging conditions. Now our shareholders for their ongoing loyalWe continued to invest heavily in our is no exception. The DKSH strategy for support. The commitment of our keydistribution infrastructure in 2009. We growth will help us achieve our vision of shareholders has been vital in helping usopened three new distribution centers in being known as the No. 1 in Market Ex- succeed in both good and difficult times.Myanmar, Thailand, and Australia. Each pansion Services. As we move forward into 2010, ourstate-of-the-art facility is equipped with As we move forward into 2010, our focus remains clear: to provide excellentthe latest technology to increase efficien- Business Units are well positioned for sus- services and tailor-made solutions thatcy and productivity, provide more capacity, tainable growth, with key strategic initia- help our partners grow their businesses.and better serve our business partners. tives in place to drive business development The distribution center in Australia and enhance our service and solution of-provides smarter storage solutions to all ferings.Business Units under one roof, with shared DKSH has an optimal geographic foot-processes, material distribution synergies, print, with about 97% of our sales gener-and unique storage and logistics solutions. ated in Asia. With weak sales in Western In June 2009 we opened the leading markets, numerous companies are seek- Adrian T. Keller Dr. Joerg Wollecold chain distribution center for consumer ing new market expansion opportunities Chairman President & CEOgoods in Thailand, featuring an impressive in this dynamic region. In addition, in-service offering and cutting-edge technol- creasing cost pressures are causing manyogy, further strengthening our position in Western companies to consider downsiz-the chilled and frozen products category. ing their operations in Asia if these areThe distribution center in Myanmar ex- not in their core markets. DKSH is in primetends our storage capabilities in the region position to take on marketing and salesand improves our processes. as well as distribution and logistics for In addition, through our acquisitions, companies and their products in Asia,we added several branch offices and whether already established, or seekingdistribution centers all over Asia to our access to markets here.network. These expand our distribution We anticipate continued growing de-coverage, serve as a platform for further mand for our services and products. Ourmarket development, and bring us even partners have benefited in the past fromcloser to our business partners. our ability to penetrate markets quickly, 19
  21. 21. Sourcing
  22. 22. Access to apowerfulglobal sourcingnetworkWe locate new and alternative sources fora diverse range of specialty chemicals andingredients, audit suppliers, and take care ofall quality assurance and compliance issues.With access to more than 70 markets anddeep industry expertise, we are able to matchcustomers’ needs with the most suitablesuppliers. As a result, we provide sourcingsolutions that meet the specific requirementsof our customers while thereby creatingbusiness opportunities for our suppliers.Our specialists define product specifications, search for hard-to-find ingredients, and assure the consistently high quality of the materials we source,while offering the perfect mix of cost-effectiveness and dependable supply.
  23. 23. Business UnitConsumerGoodsDKSH’s Business Unit Consumer Goods is The Business Segment Fast Moving Con-Asia’s leading Market Expansion Services sumer Goods serves 300,000 retail out-specialist with a focus on fast moving lets and operates 60 distribution centersconsumer goods, food services, luxury in Asia. With more than 3,000 retailgoods, as well as fashion and lifestyle points of sale, ten boutiques, 80 shops-products, and hair and skin cosmetics. in-shops, and 130 brand corners, theOur comprehensive Market Expansion Business Segment Luxury & LifestyleServices extend from product feasibility has a proven track record as an expertstudies and registration to importation, in luxury goods. Our Business Segmentcustoms clearance, sales, marketing and Food Services & Hotel Supplies caters tomerchandising, warehousing, physical the rapidly growing hospitality industrydistribution, invoicing, cash collection, in the region and serves more thanand after-sales services. Our expertise 1,500 customers. DKSH is also the soleand broad local knowledge, together franchisee and distributor of Levi’s ®with our infrastructure, enable us to bet- products in Thailand and Cambodia.ter understand our business partners’ Business Unit Consumer Goods employsneeds and to deliver customized solu- a total of 11,400 specialists in 443 loca-tions to grow their businesses. tions in 19 countries. In 2009, Consumer Goods achieved Net Sales of CHF 2,936 million.22
  24. 24. No. 1 Market Expansion Services 440 business locations specialist with a focus on in Asia Pacific consumer goods 19 countries 3 business locations in Europe and the Americas 11,400 specialized staff300,000retail outlets served in Asia daily 60 distribution centers in the region In 2009, Consumer Goods’ Total Sales amounted to CHF 4,231 million. 23
  25. 25. Market insight combined withcustomized solutionsDespite the unstable economic environ-ment throughout 2009, Business UnitConsumer Goods delivered very good re-sults, with an EBIT of CHF 82 million, al-most 14% higher than for 2008. Net Saleswere only 5.9% behind last year. FastMoving Consumer Goods, Levi’s ®, andFood Services & Hotel Supplies contribut-ed significantly to the year’s overall excel-lent performance, although market con-ditions affected the Business SegmentLuxury & Lifestyle. The resilience of Business Unit Con-sumer Goods is a direct result of our ded-ication to anticipating and meeting theneeds and goals of our clients and custom-ers, and our strong focus on creating cus- We serve 300,000 retail outlets in Asia, ensuring that our clients’ products are visibletomized solutions that help companies on the shelves, and in stock at all times.to grow in every economic environment.Another positive factor is our capillary dis- we concentrated our efforts on small out- on our dominant position in this market,tribution across all product groups and lets, and achieved good organic growth increase our competitive advantage, andtrade channels, which helps to balance in key categories. Staple items such as improve the service proposition, thus trans-out volatilities across industry sectors and food and beverages were particularly af- forming market dominance into customermarkets. fected as consumers bought in smaller satisfaction. quantities. However, this was balanced by Another excellent result was achievedFast Moving Consumer Goods positive results in the smaller outlet chan- in Myanmar. Despite the damaging effectsBusiness Segment Fast Moving Consumer nel. By the end of the year the economy of Cyclone Nargis in 2008, which are stillGoods, which serves 300,000 retail outlets had recovered and we were able to capi- being felt throughout the country, we ex-and operates 60 distribution centers across talize on market growth. perienced substantial growth. In addition,the region, is the leading Market Expan- Malaysia’s achievement of double-digit our presence in Vietnam continues to grow,sion Services provider for fast moving con- growth was another success story. This driven by our efforts to steadily increasesumer goods in Asia. Our focus in 2009, significant improvement in performance our market position.as ever, was on working closely with our is largely the result of the stringent and In Singapore, we managed to growbusiness partners in order to quickly find diligent implementation of a transforma- our business substantially, a noteworthynew ways to grow their business. This tion program that started in 2008 and in- achievement in a very saturated markethands-on approach contributed to overall cluded a complete review of our business where DKSH has the highest market share.good sales in light of the market condi- fundamentals, such as sales team organi- We achieved growth through the optimiza-tions. For example, in Thailand consumer zation, sales channel efficiency, inventory tion of our portfolio and securing a majorshopping habits changed considerably, management, as well as back office struc- account with Johnson & Johnson and itswith more consumers choosing to make ture. The successful reinvention of our personal care products such as Neutrogena.purchases from smaller shops. In response business in Malaysia enabled us to build24 Consumer Goods
  26. 26. Hong Kong achieved strong growth in (Mayora), a quality snack food company. them in Thailand since 2005, we extend-2009 thanks to its successful long-term We have worked with Inbisco for three ed our successful relationship to Hongbusiness relationships with key customers, years, helping to improve the market cov- Kong in January and to Vietnam in Julywhich resulted in priority participation in erage and sales of their brands. Finally, 2009. Since we started to manage theirstore promotions and increased sales to we took over sales and distribution for marketing, sales, and distribution activi-consumers. To counter having some of the NatureGift, an innovative slimming coffee ties, sales have risen substantially and wehighest land and labor costs in Asia, Fast product, and Pan Tai sauces, a leading anticipate increased growth in 2010.Moving Consumer Goods Hong Kong’s hot-pot sauce producer in Thailand. The However, we not only grew organicallystrategy of relocating its bulk storage to fact that DKSH, in addition to being the but also through acquisitions. For exam-South China has enabled us to capitalize distributor of choice for US and European ple in Thailand, where we took over theon the lower storage costs in China and brands, is able to serve increasing num- Shell Distribution Company, the providerthus to maximize logistics efficiencies. bers of local brands, demonstrates our for Shell’s lubricant business in Thailand. competitiveness and strong position in This addition allows us to penetrate theA reliable partner for success the market. auto care industry, giving us a larger mar-Our focus is on growing our business or- Our economies of scale, comprehensive ket share and opening up an entirely newganically through rolling out success sto- network, and well-established infrastruc- trade channel for products and categoriesries and business development. To this end, ture in Hong Kong have built our reputa- for suppliers. The impact of this acquisitionbuilding and maintaining sustainable re- tion as a reliable partner. This was an im- is even more significant since Shell’s exist-lationships with our suppliers is absolutely portant factor in extending our contracts ing infrastructure of 30 depots aroundcrucial. Last year, we renewed our long- with Pepsico Beverages, Mead Johnson Thailand now belongs to DKSH. This ad-term contract with Energizer Holdings, Inc. Nutrition, and Sunwa, and starting new ditional distribution network will help usin Thailand, a relationship that goes back relationships with Whealthfields Lohman to get even closer to customers and to ex-over 20 years. We will continue to provide and Kambly. In Taiwan, we renewed con- pand our distribution coverage to smallerthem with services covering supply chain tracts with Nivea and Procter & Gamble outlets across the country.management, product registration, and Pet Care. Another highlight is our new At the end of the first quarter of 2010,importation management. Also in Thailand, contract with Taokaenoi, a producer of we acquired Chiao Tai Logistics, the lead-we extended our cooperation with Inbisco fried seaweed snacks. Having worked with ing consumer goods logistics companyBusiness Unit Consumer Goods* money figures in CHF million (in rounded figures) 2007 2008 2009Total Sales ** 4,648 4,283 4,231Net Sales 2,948 3,123 2,936EBIT 81 72 82Assets 1,005 1,003 962Specialists 12,319 12,022 11,395* comparative figures have been adjusted to reflect discontinued operations ** equals Transaction Value 25
  27. 27. With our state-of-the-art logistics infrastructure, our business partners can rely on efficient, dependable, just-in-time delivery of their products,in urban as well as remote areas.Thorough market research enables us to ensure that the products We are able to handle all kinds of products, for example sensitive fresh andwe deliver match local tastes. frozen goods, in our new cold chain distribution center in Thailand.26 Consumer Goods
  28. 28. Through the acquisition of Shell Distribution Company and its 30 depots across Thailand, we have We are the sole distributor for Levis ® in Thailandmoved even closer to our customers and expanded our distribution coverage to smaller outlets. and Cambodia, operating 23 stores and 105 shops-in-shops.Our large sales force is equipped with handheld devices, which put real time information at their fingertips. DKSH representatives can instantly accesscontact and database information, record sales orders and call activities, and monitor the use of promotional materials for greater operational efficiency. 27
  29. 29. in Taiwan. This acquisition makes DKSHthe largest full-service consumer goodsdistributor in Taiwan. We will also now beable to offer more regional solutions froma much stronger platform within theHong Kong, South China, and Taiwan tri-angle. Furthermore, we can provide ChiaoTai’s clients with a more comprehensiveportfolio of services, as well as outsourcingoptions for marketing, sales, and backoffice functions.Unrivalled infrastructureBusiness Segment Fast Moving ConsumerGoods benefits greatly from our infra-structure, which includes state-of-the-artdistribution centers that allow us to pro- We support luxury brands, such as Maurice Lacroix, to successfully expand and grow in Asia.vide our business partners with innovativetechnology as well as sound operational business and to enter the chilled and fro- bined with tailored services and solutions.practices. Our new cold chain distribution zen food category in Singapore. In keeping with our strategy for growth,center in Thailand is a major gain, as it In South China, DKSH expanded its in 2010 we will continue to strengthensignificantly enhances our capabilities for export-supervised bonded facility in the our full-service business. As usual, we willhandling fresh and frozen products from Shenzhen International Logistics Center, apply our in-depth market knowledgeleading international manufacturers in- and increased its co-packing lines, help- and unmatched infrastructure to help ourcluding Unilever, Kraft, Fonterra, F & N, ing the Hong Kong distribution center to clients and customers successfully seizeTipco, and Danone. The 21,500 sqm facil- strengthen its competitive edge. business opportunities. Moreover, we willity is one of the most technologically ad- Another major achievement for our further optimize our supplier, service, andvanced cold chain distribution centers in Business Segment was the completion of category portfolios country-by-country toAsia. It uses our custom-designed SAP the global rollout of Pegasus, our SAP- ensure that we maximize the growth ofmanagement system, which provides un- based Global Enterprise Resource Planning our profitability.matched inventory management and lo- template, in Thailand. We also introduced We have placed proactive business de-gistics solutions. The facility gives us a a highly effective sales management soft- velopment at the core of our expansioncompetitive edge in the dairy industry, as ware program in Malaysia to manage sub- activities to further strengthen our domi-we now have the capacity to manage the distributors, providing us with greater nant market position. To achieve this wehigher volumes needed to service a larger transparency when tracking sales and in- have created a new global business de-customer base. ventory. velopment role: Vice President Business A new distribution center is planned Development, to help the entire Businessin Singapore for the Business Units Fast 2010 – business development Segment carve out new opportunitiesMoving Consumer Goods and Healthcare, What has made Business Segment Fast whilst maintaining and developing keywhich will greatly increase capacity and Moving Consumer Goods such a success relationships with our current suppliersgive us the opportunity to expand our over the years is our regional scale com- across countries. Furthermore, with the28 Consumer Goods
  30. 30. The resilience of Business Unit Consumer Goods isa direct result of our dedication to anticipating the needsand goals of our clients and customers.introduction of a new global Vice President eral agencies that were not performing to marketing campaigns, and identificationSales function, we will be able to concen- expectations, added six new brands, and of and access to suitable sales environ-trate better on building up sales capabili- successfully renegotiated four agency con- ments. Our service and solutions offeringties and rolling them out across countries. tracts: Graham, Harry Winston, Breitling, is designed to enhance the exclusive im-The position will also ensure that certain and Corum. We also extended the agree- age of a brand and is one of the reasonsquality criteria are met, establish best prac- ment with XinYu Hengdeli, our exclusive why we have been able to maintain suchtices in sales, and promote the adoption of distribution partner for Maurice Lacroix an impressive track record in Asia.standard operating procedures and sys- watches in China. We further added four The 2008 acquisition of the Desco Asiatems across the business. new lifestyle brands: Bolle, MCR, Silencia, Pacific Holding business enlarged our foot- and Sperian, with products such as ear print, as it provided us with distributionLuxury & Lifestyle plugs and safety eyewear. rights for blue-chip watch brands suchOur Business Segment Luxury & Lifestyle The Hagemeyer-Cosa Liebermann ac- as Maurice Lacroix, Parmigiani, Graham,represents some of the most renowned quisition concluded at the end of the first and Breitling, and further supported ourand respected luxury brands in the world. quarter of 2010 massively strengthens our growth in Malaysia and China.We help international manufacturers to Luxury & Lifestyle operation and gives us In 2009, we extended our partnershipaccess markets and extend their reach a portfolio of luxury watch and lifestyle with Graham from five to twelve coun-into Asia. Our key strategy is to focus on brands such as Parmigiani, Louis Erard, tries in total. Korea and Australia reportedcreating a strong local presence through Ferragamo, Bally, and Porsche Design. a sales record of double-digit growth. Webrand-building, as well as to target whole- Further, its network of 74 sales outlets, reorganized our watch portfolio duringsale and single-brand retail distribution. over 300 staff, and operations in Korea, 2009 in order to optimize the positioning The Business Segment is organized Taiwan, Hong Kong, as well as Guam and of current brands and to make room forinto four Business Lines: Luxury Watches, Saipan, significantly expands our footprint future development. We obtained the dis-Accessories & Apparel, Household Luxury, and enables us to strengthen the regional tribution rights for two additional brands:and Hair & Skin Cosmetics. On behalf of coverage. Esprit and Puma. The Hagemeyer-Cosaour partners we launch and run flagship As we look ahead to the near future, Liebermann acquisition also provided a sig-stores, shops-in-shops, and corners with our strategy is to be a regional player with nificant addition to the existing portfolio.great success in many different locations Asia-wide coverage for all our brands. Theacross Asia. The luxury products we handle focus now is primarily on further develop- Accessories & Apparelinclude classic timepieces, fine writing in- ing the current brand and market portfo- Our business with Lamy, the Germany-struments and stationery, and high-end lio. On top of this, we will selectively add based maker of premium pens, continueshousehold goods. promising new brands. to do very well in Japan. We enjoyed a re- In 2009, our Business Segment Luxury & cord year, reporting a 40% increase. TheLifestyle was affected by the global eco- Luxury Watches combination of successful marketing ini-nomic downturn, with sales of luxury In this industry, where large groups con- tiatives and Lamy’s reputation for highgoods in Asia down by 20% on average. trol up to 70% of all brands, DKSH is the quality and innovative design has greatlyHowever, we remained vigilant and re- only significant independent force for contributed to its continuous success. Oursponsive to market conditions, and intro- smaller and upcoming luxury and lifestyle long-term partnership with Graf vonduced several initiatives to improve the brands seeking to launch into Asia. We Faber-Castell, the German manufacturerpositioning of the Business Segment. In have the capabilities to support brands of exclusive fine writing, drawing, andorder to ensure the continued optimiza- from the very first stage: from providing coloring instruments, is also a continu-tion of our portfolio, we terminated sev- market entry studies and consulting, to ing success. Its flagship store in Tokyo’s 29
  31. 31. prestigious Midtown Galleria performed Levi’s ® Our management team also identified im-well in 2009. The performance of our line For over 20 years, DKSH has been the sole provement opportunities at Levi’s ® retailof luxury accessories and apparel reflects franchisee and distributor of Levi’s ® ap- shops, converting six shops to factorythe fact that our products can maintain a parel in Thailand, with a total of 23 Levi’s ® outlets and opening an additional twounique position in a highly competitive stores, five of which opened in 2009, and new ones. In 2009, we appointed a newmarket. 105 shops-in-shops. In addition to our re- Visual Merchandising Manager whose re- tail activities, we also handle the design, sponsibility is to ensure that all our storesHousehold Luxury manufacturing, distribution, and market- meet global Levi’s ® standards. Further, weIn Australia, New Zealand, and Korea, we ing of Levi’s ® products for the Thai market. strengthened our management team withhave become a leading distributor of high- This has been a successful and mutually new functional leaders for sales, productquality household goods from internation- beneficial relationship that has brought development, and finance.al brands such as J. A. Henckels, William growth to both companies. In 2009, we One of the most successful financialLevene, and Zyliss. In 2009, sales improved gained the rights to distribute Levi’s ® in months ever recorded for Levi’s ® Thailandconsiderably during the second half of the Cambodia as well. This new agreement is occurred in August 2009. We implement-year. We focused on strengthening the a direct result of our effective and strate- ed a highly successful retail marketingpositioning of our brands in the market- gic management of the brand in Thailand. strategy, the “Swap Jeans” promotion,place through new product development. We are looking forward to furthering which allowed customers to exchange anyAlthough the 2009 retail environment was our relationship with Levi’s ® in Cambodia, pair of jeans for a discounted purchase oftough, we expect improvement in con- and will begin brand-building initiatives Levi’s ® jeans and other products. By link-sumer confidence in 2010. in 2010. ing the promotion with charity donations, Last year was not without challenges, as described in more detail in the “In andHair & Skin Cosmetics however. Sales were slightly down in com- for Asia” section of this Annual Review,Our hair and skin portfolio experienced parison to 2008. Several factors, such as we were able to make a significant contri-double-digit growth in 2009. The presti- the reduction in tourism-related travel and bution to the local community.gious Swiss skin care line La Prairie opened the global economic crisis, resulted in low- In 2010 our strategic focus will be ona new store at The Elements, Hong Kong’s er than average consumer traffic. In order continued operational efficiency initia-luxury shopping complex. As the sole dis- to maintain Levi’s ® competitive market tives and new product launches, such astributor of La Prairie in Hong Kong since position, we dedicated our efforts to new Curves, a new jeans collection for women,2006, DKSH was instrumental in the plan- product launches and to optimizing busi- and the upgrade of the well-known 501®.ning and organization of the new shop. ness operations at our two factories and We will also invest in a new and more so-With the early 2010 acquisition of the at our distribution center. We leveraged phisticated ePOS (electric Point of Sale)Hagemeyer-Cosa Liebermann Group, we our internal Group synergies and trans- system for all stores.have also taken over La Prairie business in ferred our logistics operations to the Fast The Dockers ® brand is still relativelyThailand. Our plans for 2010 include en- Moving Consumer Goods Business Seg- new in Thailand, having been introducedhancing current operations, and adding ment, which greatly improved our supply only in 2007. DKSH currently operates onenon-competing brands to our portfolio to chain processes, increased production ef- Dockers ® store and 13 shops-in-shops.help increase our distribution reach. ficiency, and reduced costs. The Levi’s ® The brand is growing steadily, due to the factories we manage have also adopted fact that we invested in brand develop- lean manufacturing practices, which have ment strategies in 2009, and will continue led to more streamlined operations. to do so this year.30 Consumer Goods
  32. 32. In keeping with our strategy for growth, in 2010 we will continueto strengthen our full-service business and further optimize our supplier,service, and category portfolios country-by-country. In 2007 we created the “Club Gourmet” e-platform, a loyalty program for our cus- tomers. This has been a great success, and in 2009 we enhanced it considerably. In addition to offering members the latest product news, we can now provide them with access to customized price lists for the products DKSH offers. This user-friend- ly feature makes it easier for our business partners to make informed purchasing decisions. As part of our continuous investment in technology, we also launched our EchoPlus system, a handheld tool that allows our sales force to instantly view inventory in real time and to formulate promotionalOur Gourmet Academies offer expert product training and demonstrations for pastry chefs. offers on the spot. In terms of our organizational structure,Food Services & Hotel Supplies serve. Furthermore, the brand opens up we have appointed key positions in HongFor the past seven years our Business Seg- exciting business opportunities with new Kong and China with the task to establishment Food Services & Hotel Supplies has channels, such as international hotel and Hong Kong as a regional base and plat-enjoyed steady and solid growth. We are coffee chains. We anticipate that the dairy form for expansion. These roles will ad-one of the leading suppliers of high-qual- product line will allow us to better sup- vance product and sales development inity pastry, dairy, and chocolate products, port China’s growing pastry market. the region.imported coffee and tea brands. Our dis- As part of our Business Segment we 2010 will present many interestingtribution network is extensive – with fa- have our own Gourmet Academies in opportunities to expand support for ourcilities in over 25 cities – allowing us to Hong Kong and Shanghai where we pro- business partners. In 2010 we will focusprovide supplies and services to high-end vide product training and demonstrations. on further developing our business withhotels and restaurants in China, Hong New and existing hotel chains have ben- bakery chains, Michelin star restaurants,Kong, and Macau. In 2009, overall bakery efited from our highly trained pastry chef and top-end hotel restaurants. In addi-chain consumption was higher than av- graduates, who help them to stay at the tion, we are working on improving theerage because end-consumers increas- forefront of the industry. The academies coordination of local warehousing and lo-ingly purchased pastry products for home apply innovative applications to tradition- gistics operations as well as inventoryconsumption. al ingredients. For example, in 2009 dur- management, with the help of our IT team. One of the highlights of 2009 was our ing the mid-Autumn Moon Festival in The implementation of these efforts willability to capitalize on the 2008 addition China, we used Lindt chocolate couverture allow us to enhance the services andof Elle & Vire, one of France’s top produc- as the coating for traditional moon cakes. solutions we offer our business partners,ers of fine dairy products. With its repu- It was a very popular gift item, and thanks and help them grow in their markets.table product range we significantly im- to this creative idea we were able to reachproved dairy sales in all the markets we a broad customer base. 31
  33. 33. Research andSourcingAnalysis
  34. 34. Support forinnovationand growthWe research new specialty ingredients andtechnology applications, conduct feasibilitystudies and collect market information thatenable our business partners to advance theirbusinesses. In our network of 15 formulationand application laboratories we carry outsamples and validation testing, as well aswork on developing cutting-edge products.Our research and analysis capabilities allowus to provide in-depth market insight andstrategic advice to our business partners.Our highly trained experts generate, develop, and customize innovative and competitive new products. By taking the information gathered fromDKSH voloreetumsanand combiningel utatum il expertise, we help our velenit ad tat wis augiam, vulput ilisi et nimour market activities henibh elenis it with our ut delendigna augiam business partners grow their businesses.nosto odigna feuissed te miniam, vero odiam, vel utpat vent lum venis nulla
  35. 35. Business UnitHealthcareDKSH’s Business Unit Healthcare is the 7,000 healthcare expert staff operate outleading Market Expansion Services pro- of 109 locations across 11 countries andvider for healthcare companies seeking provide the deep market knowledgeto grow their business in Asia. We offer coupled with breadth of capabilities thata wide range of solutions, extending enable us to develop truly customizedfrom product registration, marketing and solutions. We support and representsales, to physical distribution. Products more than 260 clients and over 150,000available through DKSH include ethical purchasing and decision-making custom-pharmaceuticals, consumer health, over- ers. For companies wishing to licensethe-counter (OTC), as well as medical out products in the Asian markets, wedevices, and are supplied to multiple are a proven partner through our Medi-professional healthcare outlets includ- nova business based in Switzerland anding hospitals, clinics, pharmacies, drug- Asia. In addition, the Business Unit’sstores, dentists, optical outlets, and OLIC manufacturing facility in Thailandothers. With our leading marketing and produces an extensive range of ethicalsales competencies supported by regu- and OTC medicines in all standard for-latory affairs, customer care centers, and mats and is South East Asia’s foremostGMP-compliant distribution centers and contract manufacturer for this segment.logistics processes, our capabilities set In 2009, Healthcare’s Net Sales amount-the standard, and our integrated service ed to CHF 2,598 million.offerings are unmatched across Asia.34
  36. 36. No. 1 Market Expansion Services partner 108 business locations for healthcare companies in Asia Pacific 1 business location 3,000 highly specialized field-based sales in Europe force representatives 150,000 11 customers in Asia served daily countries 7,000 260 specialized staff clientsIn 2009, Healthcare’s Total Sales amounted to CHF 3,135 million. 35

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