from the Far East Toru, 21st June 2010 Import - PowerPoint PPT Presentation

Purchase of electronic components ��������������� from the Far East Toruń, 21st June 2010

Import from Chinese People’s Republic to EU countries Trade between Poland and Chinese People’s Republic in 2009 was in value of 11 bn EUR, where the import to Poland was in value about 10 bn EUR. Import value of EU countries from ChPR (m EUR) Share of import of EU countries from ChPR in total import (%) 300 000 20% 17,4% 18% 16,2% 247 916 250 000 16% 14,4% 15,8% 13,6% 232 620 14% 12,5% 200 000 11,4% 12% 194 932 9,6% 150 000 10% 160 327 8,4% 7,5% 8% 128 590 100 000 106 220 6% 90 148 82 000 4% 74 632 50 000 2% 0 0% 9 0 1 2 3 4 5 6 7 8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 H 1

Increase of unit labour cost in the world

World market shares of high&tech products

Forecast of the share in the world PKB

Geographical structure of purchases Total purchases of Grupa Apator in 2009 were 121 m PLN Europe 24% Far East 10% Home 66% Total purchases of Apator in 2009 were 40 m PLN Europe 22% Home 63% Far East 15%

Share in purchases in the Far East Electrical Grupa Apator engineering 21% Electronics 28% Non-ferrous products 23% Other materials Plastic with products products on 1% iron alloy 27% Apator SA Electronicts Other materials 54% w ith products on iron alloy 2% Plastic products 2% Non-ferrous products Electrical 1% engineering 41%

Changes in costs of materials of electronic elements for electronic electricity meters & GW type meters GW 12EA5 - 1 fazowy GW 16EC3 - 3 fazowy till 07.2005 Memec’s 110% display was used 100% in 08.2005 chinese display was introduced 90% in 10.2005 1-circuit board meter was introduced 80% 70% 60% 50% in 12.2005 meter with field sensor was introduced GW type meter 40% 30% stycze ń 2006 stycze ń 2007 stycze ń 2008 sierpie ń 2005 grudzie ń 2005 maj 2006 lipiec 2006 listopad 2006 maj 2007 lipiec 2007 listopad 2007 kwiecie ń 2005 czerwiec 2005 pa ź dziernik 2005 marzec 2006 wrzesie ń 2006 marzec 2007 wrzesie ń 2007

Changes in electronic material costs for electronic electricity meters – GR type meters GR 12EA5 - 1 fazowy GR 16EC3 - 3 fazowy 110% In II and III quarters of 2008 1-circuit Changes caused by exchange board was introduced rate of EUR and USD at the turn 100% of 2008 90% 80% 70% 60% GR type meter 50% 40% 8 9 9 9 0 0 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 0 0 8 9 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 ń ń ń ń d ń y ń ń d ń y c ń j c c ń j c c ń c k c k a a e t e t e e a e e e a e e e e e i u e e e e i u e e m m n p z n p z z i i i z i i i z i i i i i i i p p s z c l p p s z c l c w r c w r c r o r o r a i r e e d y a i r e e d y a e e e r l t r l t e e m e z i s u t m e z i s u t m i z i z i w i s w i s w r i r r i r z s d z s d w l w l g g k c ź k c ź k a a p p

Prices of GW and GR type electronic electricity meters max price of competition min price of competition price of Apator one phase meters 110,00 100,00 90,00 80,00 70,00 60,00 50,00 40,00 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q three phase meters 280,00 260,00 240,00 220,00 200,00 180,00 160,00 140,00 120,00 100,00 80,00 1Q2005 2Q2005 3Q2005 4Q2005 1Q2006 2Q2006 3Q2006 4Q2006 1Q2007 2Q2007 3Q2007 4Q2007 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010

Changes in profitability of technical manufacturing costs of GW and GR type meters 12EA5 GW 16EC3 GW 10,0 9,0 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 1Q2005 1-2Q2005 1-3Q2005 1-4Q2005 1Q2006 1-2Q2006 1-3Q2006 1-4Q2006 1Q2007 1-2Q2007 1-3Q2007 1-4Q2007 1Q2008 12EA5 GR 16EC3 GR 1,8 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 1-2Q2008 1-3Q2008 1-4Q2008 1Q2009 1-2Q2009 1-3Q2009 1-4Q2009

Quality problems and economizing on purchasing in the Far East Since 2007 occurred some quality problems of the displays being delivered from Chinese manufacturer. Those displays were installed in meters since the August 2005 and they were delivered by the Polish distributor JM Elektronik in Gliwice. The seller in the reference list informed that the Chinese manufacturer also had manufactured the displays for Citroen, Bosch, Samsung and Mitsubishi. In 2008 Apator SA brought a case to a court in order to get the compensation of the costs of repairs from JM Elektronik (latent defect). The witnesses were examined and expert were selected by the court (from Warsaw University of Technology). In June 2010 experts took samples of the displays in order to give expert opinion. Cost of the replacement of the displays Economizing on components 11 000 10 303 10 000 9 000 8 000 7 000 6 113 6 000 5 000 4 000 2005 - 2009

Purchasing process of electronic components Preventive actions: • quality control by reliability testing of the products-procedure; • auditing of manufacturers of electronic subassemblies – introduction of the complete identification of the components from the suppliers by bar coding (for instance Hanza, Sims); • delivery of critical elements only from famous manufacturers (for instance Texas Instruments, STMicroelectronics, Microchips Technology Inc.) The rules of cooperation with the Far East: • the representative in Chinese People’s Republic whose role is to make contacts with manufacturers and quality control of their products; • the departure twice a year to audit the manufacturers of subassemblies

Procedure of reliability testing of products and components Reliability test procedure is used for: • electronic components being used in electronic metering equipment, • printed circuit boards being used in electronic metering equipment Procedure defines detailed rules and mode of proceeding in case of : • acceptance of a new product for manufacturing, • acceptance of substitute of electronic component for manufacturing, • definition of requirements regarding reliability testing and additional special ones for selected electronic components, • definition of the schedule for testing, • statistic reliability testing for products

Procedure of reliability testing of products and components Products and components are subject to: • testing according to the standard PN-ISO 2859-1:2003, • reliability testing according to PN-EN 62059-31-1 including testing of critical elements 1. Acceptance of a new product in respect of manufacturing: • manufacturing the batch of samples in quantity defined by development department and subject them to routine testing and reliability testing; • manufacturing of pilot batch in quantity defined by salesmen and design engineers and subject them to reliability testing 2. Implementation of substitute – critical element: • acceptance by design engineers of technical parameters of components presented in catalogues ; • manufacturing the batch of samples: 10 units of the product and subject them to routine testing and reliability testing; • manufacturing of the pilot batch: 100 – 1 000 units of the product with components from the batch made by the supplier later than the batch for sample series and subject them to routine testing and reliability testing; • manufacturing of considerable manufacturing batch of 1 001 – 10 000 units with components from the batch made by the supplier later than the batch for sample/pilot series and subject them to routine testing and reliability testing