1. 10 amps up to 700 amps Global Power Solutions ITA - 53 rd Annual Meeting October 25, 2004 Anderson Power Products in China

2. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com APP in China A little history Why set up in China? Types of China Companies Choosing a location Overcoming challenges

4. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com Counterfeit Connectors

5. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com Follow Your Customer Primary driver is a follow-your customer strategy Local support, local trading Counter competitive threat OEM design centers shift Overall economic growth

6. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com APP China Requirements Local presence for OEMs and subcontractors Sales/Distribution/Customer Service Manufacturing & Sourcing Product Development Logistics Manufacture and sell locally Manufacture and export Import and sell locally Import and export to A/P region Establish a direct sales force

7. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com 3 Types of Chinese Companies Representative Office Liaison, marketing, promotion only WFOTC -Wholly Foreign Owned Trading Company Selling and Processing only Can sell imported goods No manufacturing WFOE – Wholly Foreign Owned Enterprise Manufacture and sell Can sell locally and export Cannot sell imported goods

8. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com Types of Investment Zones Special Economic Zone (SEZ) Bonded Warehouse or Free Trade Zone (FTZ) Export Processing Zone (EPZ) Industrial Park of Urban Towns.

9. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com Yellow River Delta Yangtze River Delta Pearl River Delta

10. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com Location Selection Criteria Customer base concentration Supplier base concentration Implementation cost & future developments Recurring costs structure Material flow logistics Cash flow considerations Travel considerations for visitors

11. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com Three APP Facilities Regional Headquarters – Hong Kong New Territories Location Sha Tin – North of Kowloon Manufacturing Plant & Dormitories Shenzhen Special Economic Zone Songgang, BaoAn District, Industrial Park Excellent location for convenience Distribution Center Taichung, Taiwan

12. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com

13. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com Challenges Creates fear among existing employees Bureaucracy Banking Logistics Cash Flow Hiring effective leaders Global operations integration

14. Copyright© 2002 Anderson Power Products. Reproduction or distribution without the express permission of Anderson Power Products is Prohibited www.andersonpower.com Company Car Incentives!