Samsung Electronics

in

Romania

Samsung Electronics

in

Romania

15-09-2011, Rotterdam

Content

2/8

Short introduction to Samsung Electronics

Short introduction to Samsung Electronics Logistics Services

Samsung in Romania

Romania, issues, observations, expectations.

Questions / comments

Introduction to Samsung Electronics

3/8

Introduction to Samsung Electronics

4/8

Introduction to Samsung Electronics, continued

5/8

Samsung is a market leader:

Introduction to Samsung Electronics Logistics Services

Samsung Electronics Logistics Services (SELS) Internal 4PL to Samsung Electronics Europe

Responsible for all logistics activities within Europe Inland transportation

Customs clearances

25 local warehouses

1 European Spare Parts operation

2 centralised warehouses

Factory distribution

(mainly) asset free

Samsung in Romania

Manufacturing Assembly of LCD computer monitors and Colour TV

3 sites, operated by 3rd party A Korean contract manufacturer for Samsung Electronics

Raw materials supplied via Constanta

Sales Subsidiary SEROM Sales office for Romania and Bulgaria

Constanta used as port of entry for all finished goods for Home Appliances Division

Local logistics operations, with Wim Bosman

Factory distribution Supply to all Sales Subsidiaries of Europe and Centralized DC’s

Sub contracted to Waberers, LKW Walter, K+N etc.

Romania; issues, observations and expectations, 1

Romania benchmarked:

In general, like all listed companies, Samsung needs:

Reliability and predictability

From a Korean corporate point of view Romania is a European province Romania is not benchmarked against Bulgaria or Slovakia

but against all European markets.

Constanta Port competes with Hamburg, Le Havre, Rotterdam, Gdansk etc

Romania as a gateway competes with “Nederland DistributieLand”

In our business tenders we ask the same questions throughout Europe Romania is expected to give same answers as France, UK, Germany

Romania; issues, observations and expectations, 2

Port of Constanta:

Samsung recognises opportunities and benefits of Constanta Flows rerouted from Port of Koper to Constanta in 2010 / 2011.

Observations and improvement points Cost level for Handling and Inland Distribution is high

Compared to other ports of entry in EU

Not enough competition among operators

Lead times are not reliable enough

Current congestion in Koper port can be an opportunity for Constanta

Romania; issues, observations and expectations, 3

Gateway to Europe:

High volumes from factory into Europe Cost level per truck considerable higher than Slovakia / Hungary into EU

In-balance in outbound and inbound freight

Always empty leg to factories for all carriers

No local carriers (yet) in Samsung’s portfolio

Improvements to infrastructure to reduce lead time

VAT

Korea officially requested to Romania to make VAT deferment possible Huge impact on financial supply chain when using Romania as EU gateway

(importing raw materials and finished goods)

Romania; issues, observations and expectations, 4

Customs:

From controlling to cooperation AEO-like methods of working (comparable to Netherlands)

Avoid bottlenecks per clearance Lean supply chains are disrupted by unexpected delays.

Next steps

Questions and Feedback

Thank you