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1、Detail Marketing and Sales Plan Development StudyCholine Chloride,January 12 16,2008Riyadh,An Interim presentation to,Stage 2 deliverables(Screening),Overview of the deliverables,Stage 3 deliverables(Demand),Stage 4 deliverables(Supply),Supply demand analysis and product allocation,Stage,Objectives,
2、For target markets:Potential in 2010-2020Broad level Prospect profile(database):business,consumption,grades,Suppliers,packaging&logistics,Product allocation among key countriesPricing Typical sales contract,For target marketsPESTLE analysis:Competitors:current&future capacities,operating rate vs.pro
3、fitabilityGrades profitabilityTrade flow(2010-15)SABIC competitiveness(delivered cash cost)Market entry optionsBy product value assessment(if applicable),Competitor profile&market entry strategy,Introductory meeting,1,4,Prioritize and align program modules with SABIC teamUnderstand current channel s
4、et up of SABIC internationally,which can be leveraged Understand product slate and preliminary production cost estimates,For target marketsCustomer support assessmentSales planPre-marketing tasks List of resources:to develop capabilities for customer support,Market profile:future forecast,3,Customer
5、 support and sales plan,5,Our full program comprises of 5 stages,this report has the deliverables for stages 1 to 4.,Rationale for market selected,2,Rationale for addressing key markets including:EuropeMiddle East Asia,Due to tight timelines,it might be difficult to meet our February 16 20th final m
6、eeting date.,Introductory meeting,1,Rationale for select markets,Market profile:future forecast,Competitor profile&market entry options,Sales plan,budget and resource planning,2,3,4,5,Project Kick-offNov 9/10,Interim MeetingJan 13-14,FinalMeetingFeb 16-20,SABIC approval of Market Selection,Christmas
7、,Hajj commences,Stage 2 deliverables(Screening),Overview of the deliverables,Stage 3 deliverables(Demand),Stage 4 deliverables(Supply),Supply demand analysis and product allocation,Objective,Rationale for market selected,2,Key Tasks,From Kline database and global research suggest key consuming cente
8、rs and supply centers:Europe,Asia and Middle EastReview databases to update country demand supply scenarios and forecast supply additions and demand projections(2010-2015)Identify key barriers to trade antidumping laws,tariff and non tariffAssess why are these preferred regions:Logistics SWOT analys
9、is Discuss assumptions,validate and finalize with SABIC team,Validate the rationale for markets selected:Europe,Middle East and Asia,Stage 2:Rationale for markets selected.,Deliverables,Provide Rationale for select regions for SABIC(2010 2020)based on:Barriers to tradePresence of strong competitorsT
10、ariff barriersLegislative barriersMaturity of marketSubstitutionExpensive supply chain Growth outlook Market growth outlook(2010 2015)Net import of product(2010)Minimal price discounting vs.markers such as ICIS pricingLogistically attractive(i.e.low cost to deliver product to marketLack strong compe
11、tition,All Key countries that are critical for SABIC in terms of volumes and profitability will be assessed,Choline ChlorideGlobal Demand Assessment,Choline Chloride is primarily used in animal feed,primarily for white meat.It is used to stimulate the animal growth by improving the natural choline c
12、ontent of untreated animal feed,poultry feed and pig feed are the main applicationsPoultry feed(CC forms 0.1%by wt.)Pig feed(CC forms 0.050.06%by wt.)Smaller volumes are used in Fish feed Choline chloride is sold at different concentrations(50%to 75%).Market numbers in this report are on a 100%basis
13、 unless stated differently.The 2007 global demand is 175 Kt.The market is expected to grow at 3.9%p.a.through 2010 and will result in demand of 195 KT by 2010Asia:4.4%p.a.(No growth in Japan)Europe:3.9%p.a.(Higher growth in Central Europe)Americas:2%p.a.(Higher growth in S America)Overall market wil
14、l reach 237 KT in 2015 and 420 T in 2030Market driversThe main market drivers are meat consumption as well as professionalism in growing animals these are in turn linked toGrowing economyGDP growth rateRise in living standardPopulation growth,2007 Global Demand for Choline Chlorideby major region,Ch
15、oline ChlorideGlobal Supply Assessment(on 100%basis),The supply is controlled by 5 large players that account for 85%of the global capacity2007 supply situationBalchem is the leader with 29%of global capacityShandong NB of China is the biggest regional player from China with 12%shareTaminco and Balc
16、hem are the only players that operate multiple plants in different parts of the world2010 supply situationShandong has plans to increase capacity by 20kT and Taminco plant of 12kT in Billingham,UK will close down.Some local Chinese supplier will increase capacity with capacity increasing by 11kT glo
17、ballyThai Choline Chloride Co.,Ltd.is developing a plant with 20 KT capacity(operation startup scheduled for Q2/2009)*Top 3 players will still account for 60%of global capacity,2007 Global Capacity for Choline Chloride by major supplier,2010 Global Capacity for Choline Chloride by major supplier,*To
18、 be verified,Choline Chloride global suppliers,Discussion of the screening criteria.Barriers to trade to SABIC,Discussion of the screening criteria.Barriers to trade to SABIC,Discussion of the screening criteria.Growth Outlook,Market Size in KTonnes is reflected by the size of the Bubbles,Our screen
19、ing was conducted in 16 regions/countries,Major countries by region,Market Selection-Choline Chloride,Legend,Northwestern Europe:Includes Benelux,Germany,Poland,Scandinavia,UK,BalticsDanube Basin:Includes Hungary,Romania,Bulgaria,Czech,Austria,Slovakia,Croatia,Serbia,Moldova,Ukraine,RussiaMediterran
20、ean:Includes France,Italy,Spain,Greece,Turkey,Portugal,Albania,Cyprus,Bosnia,Malta,Montenegro,Egypt,Lebanon,Israel,SyriaIndian Subcontinent:Includes India,Pakistan,BangladeshSoutheast Asia:Includes Malaysia,Indonesia,Singapore,Thailand,Vietnam,PhilippinesNorth Africa:Includes Morocco,Tunisia,Algeria
21、,LibyaSubsaharan Africa:Includes South AfricaNorth America/NAFTA:Includes USA,Canada,MexicoSouth America:Includes all Latin American nations,Note:all volumes are on 100%Choline Chloride basis,Regions selected for follow up Choline Chloride,Primary Focus onSE AsiaDanube BasinSub Saharan AfricaGCCTaiw
22、anAustraliaSecond PriorityIndian SubcontinentChina(Competitive situation)Mediterranean,Stage 2 deliverables(Screening),Overview of the deliverables,Stage 3 deliverables(Demand),Stage 4 deliverables(Supply),Supply demand analysis and product allocation,Objective,Market profile:future forecast,3,Key t
23、asks:For target markets,Initiate market research leveraging Klines existing database,along with a mix of primary and secondary researchAssess product/grade/application wise:Demand-supply scenario,make forecast for the same post 2010,through 2015 till 2020Identify major customers in select markets an
24、d provide details that would enable SABIC garner market shareIdentify pricing mechanism and references used in the industry Based on historical pricing trends and related attributes develop a likely price scenario and reference price relationshipStudy a typical sales contract accepted in the industr
25、y,Product allocation(per grade per region per country)and critical success factors to garner market share with key customers,Deliverables on next slide,Stage 3(tasks):Assess SABICs market positioning.,Product allocation(grade and specifications)per region,per select country for(with clear assumption
26、s behind the forecast model)2010,2015,&2020 For select(target country)Identify major customers(Contacts info of key customers)Provide inputs in terms of overall business,end-produce profile,consumption of key grades and specificationsMajor supplier to key customersTypical packaging&logistics,and cus
27、tomer support requirementsProduct Pricing mechanisms Pricing mechanism Reliable price referencesPricing history and forecast scenario(2000 2020)in select markets per product Detail assumptions used aboveDetail a typical sales contract,Objective,Market profile:future forecast,3,Deliverables:For targe
28、t markets,Product allocation(per grade per region per country)and critical success factors to garner market share with key customers,Stage 3(deliverables):Assess SABICs market positioning.,Demand analysis in SE Asia,Total 2007 demand for Choline Chloride in SE Asia is 7,200 tonnes:70%of the CC used
29、is in powder form 64%of total powder is on Vegetable carrier and 36%on silica,as silica is more expensive,and used mainly for fish foodOut of total powder consumption CC50%forms 85-90%and CC60%forms the rest.Overall market growth at 4.07%p.a.through 2010 will result in a demand of 8.1 KT by 2010Liqu
30、id growth:3.5%p.a.Silica Carrier:3%p.a.Vegetable Carrier:5%p.a.Overall market will reach 10 KT in 2015,12 KT in 2020 and 16 KT in 2030Overall growth of 4.1%from 2010 to 2015Overall growth of 3.4%from 2015 to 2020Overall growth of 2.9%from 2020 to 2030Market drivers:The economy in SE Asia is growing
31、at 5-6%annually,this drives increased meat consumptionAlso the animal feed industry increasingly uses CC to boost productivityAnimal feed industry grew by 5%in last 5 years and is expected to grow by 3-4%in next 5 years,2007 Region Demand for Choline Chlorideby major grade,Choline Chloride-South Eas
32、t AsiaDemand Assessment,Major Choline Chloride distributors include:JJ Degussa,Transworld(Philippines)JJ Degussa(Indonesia)JJ Degussa&Trade-link(Vietnam)Age DOr(Malaysia)Typical account serviced by a distributorMedium to Small feed producers Supply 2-3 brands targeting high,medium to low quality cho
33、line chlorideLocal or regional players with small Choline Chloride requirementsChinese suppliers are very prominent in the SEA marketChinese products dominate the SEA markets like Philippines,Vietnam,&MalaysiaCC in powder form is replacing liquid due toLower price&low capital expenditureLiquid faces
34、 freezing problems in some regionsDistributors are expected to continue to play a major role in SE AsiaDistributors play a major role in SEA due to lack of suppliers in the regionDirect indenters,big distributors supply the market with 2-3 grades from different players and avoid exclusivity contract
35、s with suppliers,Choline Chloride-South East Asia Demand fragmentation,Choline Chloride South East Asia Major identified customers*,*Customer profiles to be provided in Appendix(Word File),Choline Chloride-South East Asia Typical customer requirements,Small customers,These are either small 1st tier
36、distributors(who supply to medium/small feed mills and 2nd tier distributors)or small/medium mills themselves1st tier distributors prefer keeping 2-3 brands targeting high,medium and low quality CC thus maintaining continuous supply and volumesThey avoid exclusivity agreementsSmall to medium mills p
37、refer powder formPackaging requirement:Powder:25kg plastic knitted bagsLiquid:200kg plastic drums(low demand)Their suppliers are responsible for logistics issue till the port,Large customers,These are big feed mills or leading 1st tier distributorsThey prefer CC in liquid and powder formPackaging re
38、quirement:Powder:25kg plastic knitted bagsLiquid:200/250 kg plastic drumsThe suppliers are responsible for logistics issue till the portThe suppliers dont provide any other service to the company.This product is straightforward for application in animal feed so that it doesnt need technical support.
39、Some of these big mills buy their spray equipment themselves,Choline Chloride-South East Asia Key distributors*,*Distributor profiles to be provided in Appendix(Word File),Demand analysis in China,There are 3 major grades of Choline Chloride major grades used 85%of the CC used is in powder form,as l
40、iquid form is requires capital investment in spraying equipment75%of powder is on Vegetable carrier and 25%on silica,as silica is more expensiveOut of total powder consumption CC50%accounts for 60%of the consumption and CC60%forms the restOverall market growth at 5.56%p.a.through 2010 will result in
41、 a Chinese demand of 26 KT in 2010Liquid growth:2-3%p.a.Silica Carrier growth:4%p.a.Vegetable Carrier growth:6-7%p.a.Overall market will reach 33 KT in 2015,41 KT in 2020 and 59 KT in 2030Overall growth of 5.0%from 2010 to 2015Overall growth of 4.2%from 2015 to 2020Overall growth of 3.7%from 2020 to
42、 2030Market drivers:Growing economy at 10%which is driving increased meat consumptionIncreased use of CC by the animal feed industryAnimal feed industry grew by 7-8%in last 5 years and is expected to grow by 5-6%in next 5 yearsCC has a direct positive correlation with feed industry,2007 Region Deman
43、d for Choline Chlorideby major grade,Choline Chloride-ChinaChinas Demand Assessment,An important share of the CC is supplied directly to end users.Major CC distributors are:Xinmu,Guandong,ChinaZhongning,Liaoning,ChinaA typical account serviced by a distributor is aSmall feed producer with 1-4 feed m
44、ills No need for centralized purchasingLocal or regional player with small Choline Chloride requirementsDevelopment of market segmentationCC in powder form will continue to dominate in future as well due to its hassle free useCC in liquid form requires spray equipment with high capital investmentAdv
45、antage of liquid are saving in storage cost(because of higher active%)and cheaper product on an active ingredient basisOnly large customers realise these advantagesMarket distribution by sales channelWith consolidation of CC demand,the role of distributors is expected to decrease.Distributors focus
46、on small requirements of small local®ional feed producers,Choline Chloride-ChinaChinas fragmentation of demand,Choline Chloride ChinaMajor identified customers*,*Customer profiles to be provided in Appendix(Word File),Choline Chloride-ChinaTypical customer requirements,Small customers,These are d
47、istributors like Xinmu,Zhongning and small feed mills like DAFA,Luxin with 1-4 small feed millsMajority of the requirements of small feed mills is met through distributorsPackaging requirements:Powder:25kg plastic woven bagsThe suppliers(either manufacturer or distributor)are responsible for logisti
48、cs and rely on outside logistic companies,Large customers,Charoen Pokphand,New Hope,Liuhe group,Wens group,Tongwei group,Nanbao group,etc.are big animal feed producers with 20-80 feed millsAlmost all are local players,not international groupsPackaging requirements:Powder:25kg plastic woven bagsLiqui
49、d:50/200 kg plastic drumsThe suppliers are responsible for logistics and rely on outside logistic companies for transportation The suppliers dont provide any other service to the end users.This product is straightforward for application in animal feed so that it doesnt need technical support.,Cholin
50、e Chloride-ChinaKey distributors*,*Distributor profiles to be provided in Appendix(Word File),Demand analysis in Danube Basin,Choline Chloride Danube BasinLarge identified customers*,*Customer profiles to be provided in Appendix(Word File),Choline Chloride Danube BasinOther identified customers*,*Cu
