A Successful Experience Using Hong Kong and the Pearl ...info.hktdc.com/sandiegoroadshow2006/pdf/ClellenIp_presn.pdf · Emerson: Company Profile! Diversified global manufacturing

A Successful Experience Using Hong Kong and the Pearl River Delta Business Model For Global Markets

A Successful Experience Using Hong Kong and the Pearl River Delta Business Model For Global MarketsHong Kong & Jiangmen Business SeminarSan Diego - June 15, 2006

Clellen IpDirector, Corporate Development — Asia

2

AgendaAgendaAgendaAgendaAgendaAgendaAgendaAgenda

! Emerson global overview

! Emerson China overview

! ClosetMaid Jiangmen overview

! Success factors

! Challenges

! Conclusion

3

Emerson: Company ProfileEmerson: Company Profile

! Diversified global manufacturing and technology company serving industrial, commercial, and consumer markets around the world

St. Louis, MO Headquarters

! Publicly traded (NYSE: EMR)

! Headquarters in St. Louis, MO (USA)

! Recognized for outstanding management process and record of consistent long-term performance

! Manufacturing and/or sales presence in more than 150 countries

! Founded in 1890 — in business for 115 years

24%

19%

19%

17%

21%

2005 Emerson Summary2005 Emerson Summary

Process Management

Industrial Automation

Appliance & Tools

Network Power

Climate Technologies

Europe

Asia

United States

ROW

Consumer

Industrial

Electronics

2005 Sales by Segment

22%

14%

11%

53%

2005 Sales by Geography

2005 Highlights

Sales $17.3B

OP* $2.6B

OP Margin* 15.0%

EPS $3.40

Mkt. Cap. $29B

• Founded in 1890 in St. Louis, MO

• Operations in over 150 countries

• 275 locations worldwide

• Approximately 47% of Emerson sales are outside the U.S.

• 114K employees (year end)

* Reconciliation to GAAP measure at the end of the presentation; Market Cap as of 9/30/05

5

Emerson Global PresenceEmerson Global Presence

US & CanadaSales $9.8 billion

Employees 42,400Locations 125

Latin AmericaSales $0.7 billion


AsiaSales $2.4 billion


EuropeSales $3.9 billion


Rest of WorldSales $0.6 billionEmployees 1,600

Locations 5

Worldwide Employees 114,000Locations 275

(FY 2005)

6

Emerson: Creating Technology and Solutions for a World in ActionEmerson: Creating Technology and Solutions for a World in Action

Appliance SolutionsMotor Technologies Process Management

Professional Tools

Climate TechnologiesIndustrial Automation

Network Power

Storage Solutions

7

Emerson Storage Solutions: The Perfect SpaceEmerson Storage Solutions: The Perfect Space• AIR COMFORT PRODUCTS Ceiling Fans• CLOSETMAID Residential Wire Storage• EMERSON APPLIANCE CONTROLS

Electronic Timers and Controls• EMERSON MOTOR CO. Appliance, Air

Moving, Specialty, and Hermetic Motors• EMERSON TOOL COMPANY Wet/Dry

Vacuums and Humidifiers• HEATING PRODUCTS Electric Heating

Elements and Systems• IN-SINK-ERATOR Garbage Disposers and

Hot Water Dispensers• INTERMETRO Commercial Storage• STACK-A-SHELF / DO+ABLE

Residential Laminate Storage• KNAACK Jobsite, Truck/Van Storage &

Security• RIDGE Professional Plumbing Tools &

Diagnostic Equipment• WESTERN FORGE Hand Tools

8

AgendaAgenda

! Emerson global overviewEmerson global overviewEmerson global overviewEmerson global overview

! Emerson China overviewEmerson China overviewEmerson China overviewEmerson China overview

! ClosetMaid Jiangmen overviewClosetMaid Jiangmen overviewClosetMaid Jiangmen overviewClosetMaid Jiangmen overview

! Success factorsSuccess factorsSuccess factorsSuccess factors

! ChallengesChallengesChallengesChallenges

! ConclusionConclusionConclusionConclusion

9

● Started doing business in China in late 1970sStarted doing business in China in late 1970sStarted doing business in China in late 1970sStarted doing business in China in late 1970s---- Technology transfer (Rosemount)Technology transfer (Rosemount)Technology transfer (Rosemount)Technology transfer (Rosemount)

● China is EmersonChina is EmersonChina is EmersonChina is Emerson’’’’s biggest business partner in Asias biggest business partner in Asias biggest business partner in Asias biggest business partner in Asia

- 2222ndndndnd only to U.S. in sales only to U.S. in sales only to U.S. in sales only to U.S. in sales since since since since ’’’’00002222

● Current Infrastructure: Current Infrastructure: Current Infrastructure: Current Infrastructure:

---- 28 28 28 28 manufacturing operamanufacturing operamanufacturing operamanufacturing operations in 13 locationstions in 13 locationstions in 13 locationstions in 13 locations

---- 7 joint ventures, 28 wholly7 joint ventures, 28 wholly7 joint ventures, 28 wholly7 joint ventures, 28 wholly----ownedownedownedowned

---- More than 19,0More than 19,0More than 19,0More than 19,000 empl00 empl00 empl00 employeesoyeesoyeesoyees

China OverviewChina Overview

10

Emerson China Manufacturing Plants HighlightsEmerson China Manufacturing Plants Highlights1. Thermodisc, Shenzhen2. Climate Technologies, Suzhou3. Network Power, Shenzhen4. Process Management, Beijing5. ClosetMaid, Jiangmen6. Astec Power, Luoding

7. Astec Power, Fuyong8. Emerson Baoan9. Emerson Professional Tools, Shanghai10. Branson, Shanghai11. China Motors, Qingdao12. Process Management, Shanghai

11

AgendaAgenda







12

From Modest Beginnings …From Modest Beginnings …

1998

EMR acquires ClosetM

aid Jiangmen


aid Jiangmen


aid Jiangmen


aid Jiangmen

330+ employees, 175 containers




2000

Lean manufacturing

190,000 sq ft, 3 bldgs,

700+ employees,

1315 containers

2006

One of 5 China suppliers for ClosetMaid

- Benefits- Issues …

2002-5

ISO 9001, Audits, Corp Governance,

ITC/C-TPAT, Business Ethics

13

AgendaAgenda







14

Global Locations

Warehousing / DistributionFacilities

Puerto Rico

HawaiiEmerson / CAT LogisticsSAS 3PL

Manufacturing / DistributionManufacturing3PL

Do+Able3PL ClosetMaid

3PL

15

ClosetMaid Jiangmen Location

(Jiangmen)

(Hong Kong)

16

Hong Kong – Strategic Regional HubHong Kong – Strategic Regional Hub! Location – strategic location in Pearl River Delta! Provides strategic regional support and expertise

– Senior Management / Leadership– Finance– Legal– Marketing & Sales – HR/Manpower– IT– Procurement / Logistics

17

Operation Excellence Initiative –Lean ManufacturingOperation Excellence Initiative –Lean Manufacturing! Started Sep ‘00

! All managers, engineers, supervisors 4-day training

! Full time Lean Champion & Lean engineers began Nov ‘05

! Benefits to date

— Labor reduced 37% where applied

— Floor space savings of 48%

— WIP reduced by 88%

— Lead time for shipment from 21 days to 7 days

— Cleaner work environment through ‘5S’ Campaign

— 0% rejection in ‘05 from US customers

18

Operation Excellence Initiative –ISO 9001Operation Excellence Initiative –ISO 9001! Started Mar ‘02! Working together with ClosetMaid headquarter on

registration– same registrar as headquarter in Ocala

! Successful renewal ISO 9001: 2000 in Nov ’05! Management review in Mar ‘06! Annual management review to review improvement

plans

Smooth registration due to CJSL instituted many processes Smooth registration due to CJSL instituted many processes Smooth registration due to CJSL instituted many processes Smooth registration due to CJSL instituted many processes prior to the certification applicationprior to the certification applicationprior to the certification applicationprior to the certification application

19

Operation Excellence Initiative –Internal & External AuditsOperation Excellence Initiative –Internal & External Audits! Corporate governance board meeting

! ITC (Import & Export Rules, C-TPAT)

! Statutory audit (KPMG)

! Emerson internal financial audit

! Emerson environment and safety audit

! Emerson Business Ethics program — 100% employee participation

Business Ethics is always Emerson’s Key Measurement Factor

20

Additional AccomplishmentsAdditional Accomplishments! Exceeded Board plan every year since acquisition! Managed yearly container growth 20% CAGR with quality

and service improvement ! Safety initiatives - on site MD! Productivity improvements in spite of Chinese mentality! Installed WWT system - 1st in Jiangmen! Installed generators to prevent power shortage! Installed networked PC system! Installed new product costing system

CJSL’s performance contradicts paradigms about typical Chinese operations

21

AgendaAgenda







22

Challenges Moving Forward …Challenges Moving Forward …

! Space Constraints— Expansion needs as productivity increases

— Options

•Multiple locations within Jiangmen

•Move to new Single location within Jiangmen

! Compliance with new legislation— Labor, environment, safety production, IP

23

AgendaAgenda







24

ConclusionConclusionGeographical StrengthsGeographical StrengthsGeographical StrengthsGeographical StrengthsGeographical StrengthsGeographical StrengthsGeographical StrengthsGeographical Strengths! Location! HK as strategic regional

hub! Logistical strength

— Port, Pearl River Delta, — suppliers

! Manpower supply! Cost effective! Government support

Operational ExcellenceOperational ExcellenceOperational ExcellenceOperational ExcellenceOperational ExcellenceOperational ExcellenceOperational ExcellenceOperational Excellence! Lean manufacturing! ISO 9001! Internal & external audits

— Corporate Governance— ITC (Imp./Exp. Rules)— Statutory Audit (KPMG)— EMR Internal Fin. Audit— EMR Environment & Safety

Audits— Business Ethics program -

100% employee participation

25

ConclusionConclusionGeographical StrengthsGeographical StrengthsGeographical StrengthsGeographical StrengthsGeographical StrengthsGeographical StrengthsGeographical StrengthsGeographical Strengths! Location! HK as strategic regional

hub! Logistical strength

— Port, Pearl River Delta, — suppliers

! Manpower supply! Cost effective! Government support

Operational ExcellenceOperational ExcellenceOperational ExcellenceOperational ExcellenceOperational ExcellenceOperational ExcellenceOperational ExcellenceOperational Excellence! Lean manufacturing! ISO 9001! Internal & external audits

— Corporate Governance— ITC (Imp./Exp. Rules)— Statutory Audit (KPMG)— EMR Internal Fin. Audit— EMR Environment & Safety

Audits— Business Ethics program -

100% employee participation

Right investment decision

We believe Jiangmen will be continuously improved and prosper business

development

Right investment decision

We believe Jiangmen will be continuously improved and prosper business

development

26

Long-Term Commitment to ChinaLong-Term Commitment to China

● Manufacturing & Sales

● Engineering & Development

● Export Procurement

● Human Resources

China President Hu Jingtao (right) and China Vice Premier Wu Yi (above) met with Emerson Chairman, CEO & President, David N Farr.

China President Hu Jingtao (right) and China Vice Premier Wu Yi (above) met with Emerson Chairman, CEO & President, David N Farr.

27

Thank You …Thank You …Visit us at:

www.ClosetMaid.comwww.GoToEmerson.com

A Successful Experience Using Hong Kong and the Pearl ...info.hktdc.com/sandiegoroadshow2006/pdf/ClellenIp_presn.pdf · Emerson: Company Profile! Diversified global manufacturing

Documents