Agribrands Purina China Entry Strategy Jan 14 2003

Agribrands Purina China Entry Strategy Jan. 14, 2003 FKI-Amcham Joint Seminar Ki-Yong Kim

Agribrands Purina Korea, Inc § Established in May. 5, 1967 § Operate 3 plants in Songtan, Kunsan and Kimhae § Annual Sales Revenue: $ 290 million § No. of employees: Regular 312/Contractor 92 § Market leader in Livestock and Feed Industry

Cargill Animal Nutrition § Cargill Inc. § Cargill, Incorporated is an international marketer, processor and distributor of agricultural, food, financial and industrial products and services with 98, 000 employees in 61 countries. § CAN(Cargill Animal Nutrition) § § § 178 Feed plants 11 million tons 9, 700 employees 26 countries World Largest & Best Animal Nutrition Company

China Economic Growth

Financial Times Dec 9 th, 2003 “ The opportunities for decades of rapid growth are excellent. The chances of exploiting those opportunities are not too bad either. With substantial reforms, China could easily grow considerably faster than at present. Without such reforms, growth is still likely to remain rapid, as the more dynamic parts of the economy increase their weight in the total. Provided policy improves and the world itself does not fall into some kind of catastrophe, China has an excellent chance to achieving its economic goals for the next two decades. Given its economic momentum and the desire of its people for more, so palpable to the visitor, it would be a brave person who bets against its success. ”

Korea Feed Production FY 2003 APKI CKI Nat’l 981, 472 MT 191, 563 MT 15, 525, 303 MT

China Manufactured Feed Estimated 2005: 100 million tons * Have World Largest Feed Market Potential(Korea: 15. 5 MMTon)

Feed Industry Development § Rapid Development, Manufacturing Increasing Continuously Unit: MMT

Major Players Location CP Hope Tongwei

China Feed Mill Capacity / Utilization § 13, 000 Mills over 10, 000 MT/year Capacity § 2, 000 Mills over 30, 000 MT/year Capacity § Capacity Utilization : Avg. 51. 9% § High : Tianjin 85% § Low : Qinghai 23%

Key Strategic Direction of China Business Development n n Long-term Vision . The Best Feed company in China by 2010 Leadership. GM assignment having high qualities of - Talking frequently with employees in Chinese - Respecting Chinese history, culture & people Talented. Hiring, Training and developing good local Local People people for future management candidate Customer. Direct communication with customer for Communication creating best value thru improving productivity

CAN China Vision The Best Feed Company in China by 2010 -Shared with Employees -Prepared strategic action plan -Contribution to the Enriched Community

Current CAN China Operations Monthly Capacity : 60, 000 MT Langfang Fushun Yantai Zhenjiang Chengdu Nanjing Jiaxing Total CAN China 7 Operations, 8 Plants

CAN China Training Center

Training/Seminar

Customer Communication

Contribution of Agribrands Purina and Cargill Animal Nutrition to China Agriculture Development § Farmer Training § Employee Education for Growth § Enriched Community § Scholarship § Research Fund § Cargill Cares

Joint Market Entry Strategy § Joint Vision Sharing § High Caliber Korean management team assignment who knows Chinese § Culture § History § People § Resources of Technology and Management know-how from US and Korea § Win-Win Strategy

CAN China Growth 2001 Buildup period 2007 Breakthrough 2012 period

Thank You.