Integria Logistics Oy Ltd New business concept for manufacturing networks

1. Integria Logistics Oy LtdNew business concept for manufacturing networks Timo Koivumäki Vehicle component supplier network development project closing seminar Tampere 7.5.2012

2. Integria Logistics Ltd Oy • Background • Vision and business idea • Field of operation and network • Offering • Establishing support • Business case structuring • Market potential of Russian automotive industry • Contacts

3. Background • A spin off from Automotive Supplier development project • Initiated by an automotive OEM in Russia • Suited to serve multilayer manufacturing networks • Combines elements of LSP, Trading house and IT company • Built on long experience and competence of key persons • Market analyzing and business plan development started 2008 • Integria Logistics Ltd Oy founded in the end of 2011 • Focus in serving Finnish and Scandinavian companies who are targeting becoming suppliers to industry in Russia • Member of Odette / NAF since April 2012

4. Vision and business idea Vision Integria is a supply chain management specialist and a system vendor providing customers optimizing of sourcing and procurement as well as localized value added operations thus creating value and competitiveness Mission Opening a new market for Nordic component manufacturing industry and leaving a lasting footprint in Finnish automotive industry Business idea Integria provides a supply chain management model for developing and streamlining global capital, information and material flows

5. Integria field of operation • Swedish Procurement • Finnish Logistics • Russian Sales Viipuri • Finnish LSP • SCM • JIT operations • Packing and kitting • Forwarding services • ERP Integration • Russian trading agency • - Sales & trading • - Value-added Manufacturing JIT • Localization • Customs & delivery • Swedish Procurement company • Sourcing, purchasing • Network management • Quality assurance Operational excellence, Supply Chain transparency, Field tested processes

6. Integria offering • Linking suppliers and buyers • SCM Optimization • Logistics • Localization • Trading from Russian DUNS • Establishing support • Production transferring • JV setting up • Consulting

7. Positioning SME- Supplier A Supplier E Integria Logistics Sourcing & Sales Quality Logistics ERP transparency Customers OEM’S & Tier 1 Localization SCM Optimization Supplier D SME- Supplier C SME- Supplier B

8. We provide • Competitive sourcing • Nordic countries • China & India • Lead time shortening • Localization • Transport management • Kitting and sequencing • Transparency / ERP integration

9. Network IT support

10. Integria service solution • Cars • Seats • Interior panels • Carpets, Insulations • Batteries • Wheels • Metals parts • Electrical components • Bumpers ….. • Heavy vehicles • Seats • Bunks • Axles • Radiators • Gears • Gearboxes • Hydraulics • Plastic items …. • Logistics • Kitting • Sequencing • Safety stock • Forwarding • Customs • Process quality • Procurement • Consolidated sourcing • Process management • Alternative suppliers • Contract management • Financing • Quality assurance • Localization • Efficient sales • Trading agency • Value added service • JIT operations • Sequencing ERP Transparency, Cost management

11. Localization in Business Park Vyborg • Business Park provides production support services • Consulting • Turnkey full scale projects • Outsourced manufacturing • Premises are provided by property partner • Sublease arrangement via Business Park Vyborg is possible depending on agreement model

12. Integria’s Support; preparation for OEM delivery • Integria has up-to-date understanding of OEM Quality and process requirements • Complete audit - insight to the actual situation • View of improvement needs • PSA (Potential Supplier Assessment), PCPA (Control Plan Audit) • Action plan preparation • Audit result -> training and other needs of Potential Supplier • Integria development and training • Automotive special requirements • Co-operation with ISO certification project • Supportand benchmark

13. Business case structuring • Lead by Integria • Standardised project concept • Supplier candidates audited and action plan created • Project financing secured • Project kick off and follow up

14. Project team • Organization and resources • Project team • A project manager and concerned staff • CEO / Production manager / engineer • Basics on QA • English language • Committed to automotive goals • A matter of commitment • Most changes needed relate to larger volumes and change in production scale and pattern • Need for Process quality and Quality process understanding

15. Automotive Industry Certificates • ISO/TS 16949 • Automotive special standard • ISO 14001 • Environmental policy • MMOG • Material Management operations guide • Supplier may be accepted without certification • Transition period • Defined date for audit

16. OEM basic requirements Potential supplier; Imperative documents for OEM audit • Facility DUNS • Purpose & Plant Location • Production Capacity • Production Process Chart • Plant Equipment Plan • Layout Plan (Plant & Warehouse) • Investment Plan • QSB compliance • Flow Chart of Quality Control System • Process Defect Rate • EDI connection • CEO Commitment letter confirming plan to setup a new business (in the new country)

17. OEM basic requirements Time to become a supplier • Acceptable product, capacity (2 days from initial inquiry) • Quotation, pricing (10 days) • OEM audit (3+ months) • PPAP approval, trial runs, tooling when necessary (3 – 6+ months) • First delivery (6– 12 months)

18. OEM Ready - Project overview • OEM Ready – common objective • Practical approach • 2nd party certification • Aiming at starting deliveries • Project lead-time • Minimum 6 weeks

19. Business potential in Russia • Immediate need of 600 or more new suppliers in Russia • Component market size 7 Billion Euros • Approx 50 % within reach for Nordic suppliers • Nordic and Russian industry sizes match • Nordic supplier base is a competitive sourcing market for Russia in terms of supply chain operation and lead time optimization

20. Contacts Timo Koivumäki COO, Chairman Integria Logistics Oy Ltd Kimmeltie 3, 3rd Floor PO Box 41 02101 ESPOO Finland tel: +358 9 4289 00 88 mob: +358 40 524 44 11 timo@integria.fi Mikhail Smirnov Development Manager • Integria Logistics Oy Ltd • Kimmeltie 3, 3rd Floor • PO Box 41 • 02101 ESPOO • Finland • tel: +358 9 4289 00 88 • mob: +358 40 678 67 47 mikhail@integria.fi