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“ The real benefit of pursuing business with China can only be realized once companies are able to mitigate the hidden costs in their supply chain ” This This This This presentation presentation presentation presentation seeks seeks seeks seeks to to to to acquaint acquaint acquaint acquaint the the the the China China China China Trade Trade Trade Trade Service Service Service Service offered

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by by by Cardinal Cardinal Cardinal Cardinal Global Global Global Global Trading Trading Trading Trading (PTY) (PTY) (PTY) (PTY) Limited Limited Limited Limited which which which which is is is is directed directed directed directed towards towards towards towards assisting assisting assisting assisting more more more more SA SA SA SA companies companies companies companies to to to to securely securely securely securely and and and and efficiently efficiently efficiently efficiently procure procure procure procure goods goods goods goods from from from from China China China China. . . .

OVERVIE W OVERVIE W OVERVIE W OVERVIE W

1) Background 2) How does Cardinal Global Trading act as a local contact point for South African companies needing China Sourcing services ? 3) How does Cardinal Global mitigate the risk out of sourcing from China ? 4) What is Cardinal Global’s experience in offering this service ? 5) Product Enquiries handled thus far 6) Common Questions 7) Thank You

1) BACKGROUND 1) BACKGROUND 1) BACKGROUND 1) BACKGROUND

• South Africa does not function in isolation.
• The BRICS agreement is in full effect.

2) How does Cardinal Global Trading act as a local contact point for South African companies needing China Sourcing services ?

Relevance Relevance Relevance Relevance and Positioning and Positioning and Positioning and Positioning

• YOU

YOU YOU YOU TELL US WHAT YOU WANT TELL US WHAT YOU WANT TELL US WHAT YOU WANT TELL US WHAT YOU WANT

• WE

WE WE WE GET YOU WHAT YOU NEED GET YOU WHAT YOU NEED GET YOU WHAT YOU NEED GET YOU WHAT YOU NEED

• Cardinal Global Trading is a South African owned and managed, Procurement Service

Provider with focus on China.

• The structure of our company creates an affordable and efficient channel for more SA

companies to procure goods from China. → Sales office is based in Durban, South Africa → Operations office in Beijing, China → Localize doing business with China

• We provide a Turnkey solution in managing our clients orders. This includes:

→ Validating the most suitable Chinese manufacturers in support of our client’s objectives → Shipping from China → Customs clearance and related logistics in SA → Delivery to buyer’s doorstep

3) How does Cardinal Global mitigate the risk out of sourcing from China ? 3) How does Cardinal Global mitigate the risk out of sourcing from China ? 3) How does Cardinal Global mitigate the risk out of sourcing from China ? 3) How does Cardinal Global mitigate the risk out of sourcing from China ?

• Challenges faced by foreign buyers.
• Substandard Quality goods & Breakdown in communication with manufacturers.
• Quality starts at the source

CARDINAL CARDINAL CARDINAL CARDINAL GLOBAL GLOBAL GLOBAL GLOBAL PERFORMS PERFORMS PERFORMS PERFORMS AN AN AN AN IN IN IN IN-

• DEPTH

DEPTH DEPTH DEPTH COMPANY COMPANY COMPANY COMPANY VERIFICATION VERIFICATION VERIFICATION VERIFICATION CHECK CHECK CHECK CHECK ON ON ON ON THE THE THE THE FACTORIES FACTORIES FACTORIES FACTORIES WE WE WE WE WORK WORK WORK WORK WITH WITH WITH WITH IN IN IN IN CHINA CHINA CHINA CHINA. . . . THIS THIS THIS THIS INCLUDES INCLUDES INCLUDES INCLUDES: I. I. I. I. On-site factory inspection II. Business Management check III. Production facilities check IV. Quality management systems check V. Container loading inspection check

“Stories of bad quality products arriving from China are not uncommon. 99% of these emanate for one reason only: Lack of professional quality control.”

3 3 3 3.1) China Company Verification .1) China Company Verification .1) China Company Verification .1) China Company Verification

1. General Supplier Information

Supplier Name: City/Province: Address: Website: Contact: Phone: Contact Title: Email: Mobile: Other: Year Established: Business Type: Last Year Revenue: Revenue in Exports: Main Products:

Aspects investigated include:

PURPOSE

China Company Verification system is designed to help substantiate the legitimacy and of the reliability of enterprises we work with China.

Container Loading Inspection Check Container Loading Inspection Check Container Loading Inspection Check Container Loading Inspection Check -

• Example

Example Example Example

• 2007 :

Cardinal Global developed its platform for business with China brokering manganese ore from Zambia.

• 2010 : Consultant to Chinese multinational company procuring manganese ore and

Chrome ore from SA.

• Building on our market experience and relationships built up with China, we identified

the need to offer a service to SA companies looking for a secure trade channel to procure goods from China.

• 2012 : Sales office established at Durban Chamber of Commerce & Industry.

4 4 4 4) ) ) ) What What What What is is is is Cardinal Cardinal Cardinal Cardinal Global’s Global’s Global’s Global’s experience experience experience experience in in in in offering

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this this this service service service service ? ? ? ? TIMELINE TIMELINE TIMELINE TIMELINE

5) 5) 5) 5) Products & Enquiries handled thus far: Products & Enquiries handled thus far: Products & Enquiries handled thus far: Products & Enquiries handled thus far:

5.1) Product: Mining Consumables Delivery: Zimbabwe →

Grinding Rods → Grinding Steel Balls → Conveyor Belts → Other: Steel Rebar's

5.2) Product: Fertilizer Delivery: Beira, Mozambique

→ M O P Standard → S O P Standard → Ammonium Sulphate → M O P Gran

5.3) Product: Steel Products Delivery: Durban

→ Hot Dipped Galvanised Steel Coil (Z160, Z275) → Electro Galvanised steel coil (Zinc 25/25 ) → Cold Rolled Coil (SAE1008) → Prepainted Steel Coil (Gloss 75% substrate 120gm²) → Reinforcement Round Bar (A572 Grade65) → Stainless Steel Round Bar (Pickled Passivated Annealed) → Special Steel Hollow bar (Grade ST52) → Stainless Steel Plate (304L, 316L) → E.N. Steels (EN8: 080M40 & EN3A: 070M20)

5.4) Product: Chemicals Delivery: Durban

→ N-Propyl Acetate → Perchloroethylene → Soda Ash Light → Methylene Chloride → Citric Acid Mono → Citric Acid Anhydrous → Sod Metasilicate Pentahydrate → Dextrose Mono → Sodium Bicarbonate → Hydrogen Peroxide 50% → Sodium Sulphate → Sodium Sulphate Anhydrous → Calcium Hypochlorite 70% → Tcca Tablets → Linear Alkyl benzene Sulphonic Acid → Sodium Fluoride → Caustic Sodium Pearls → Sodium Sulphide → Sodium Silicate → Boric Acid → PVC → Sodium Chlorate → Sodium Nitrate → Chromium Trioxide

5.5) Product: Agriculture Machinery Delivery: Durban

→ Silage Harvester → Round Baler → Ploughs

5.6) Product: Textiles Delivery: Durban

→ Lining Mesh → Gingham Checks → Polycotton Sheeting → PVC → Brushed Flannel → Terry Toweling → Single Jersey

5.9) Product: Thermal Plastic Road Marking Paint Delivery: Durban 5.7) Product: Creosote Delivery: Durban 5.8) Product: PVC Dotted Safety Glove Delivery: Durban 5.10) Product: Gypsum Ceiling Board Delivery: Durban

5.11) Product: Laminated Floor Board Delivery: Durban 5.12) Product: Ceramic Floor Tiles Delivery: Durban 5.14) Product: Wire Rope & Fence Delivery: Durban 5.15) Product: Nails Delivery: Durban 5.16) Product: Car and Truck Tyres Delivery: Durban 5.18) Product: Baby Toys & Accessories Delivery: Durban 5.19) Product: Stationary - Gel Ink Pen Delivery: Durban 5.20) Product: Outsourced Manufacturing - Printing Delivery: Durban 5.17) Product: Corrugated Colour Roof Sheets Delivery: Durban 5.13) Product: Perfume bottles Delivery: Durban

6) COMMON QUESTIONS

6.1) WHY USE CARDINAL GLOBAL, WHAT IS THE UNIQUE SELLING POINT ?

→ We We We We simplify simplify simplify simplify doing doing doing doing business business business business with with with with China China China China → Value Value Value Value Driven Driven Driven Driven: : : : Our service is directed at creating value from working with China by provision of an affordable and efficient supply chain for SA companies to procure goods from China. → On On On On the the the the Ground Ground Ground Ground Service Service Service Service: : : : Our Sales office in Durban gives us the opportunity to clearly understand

• ur client’s exact requirements. Our operations office in China gives us improved access to the

broad spectrum of factories in China which enhances our ability to source the most favourable manufacturer’s in-line with the client’s exact requirements. → Quality Quality Quality Quality starts starts starts starts at at at at the the the the Source Source Source Source: : : : The structure of our operations ensures that we are able to manage concerns over poor quality and communication that has become characteristic when dealing with China. → Turnkey Turnkey Turnkey Turnkey Solution Solution Solution Solution: : : : We deliver to our client’s doorstep in SA

6.2) WHAT TYPE OF PRODUCTS DOES CGT HANDLE ?

We handle most product categories; as long as it can be “Made in China” we can help you.

6.3) WHAT QUALITY CHECKS DO YOU HAVE IN PLACE IN SA ?

The advantage we offer our clients is through the provision of a turnkey supply chain with China which means our quality checks start at the source once we start locating factories in-line with our client’s requirements i.e. China Company Verification. In this way we are able to manage the quality check on the products we supply in SA. However should there be any claim of defective cargo; we shall compensate or credit subsequent

• rders in accordance to the quantity of defective cargo received.

6.4) IS CHINA THE ONLY COUNTRY YOU WORK WITH ?

With increasing attention on China today and with more challenges been faced by international buyers we have strategically directed our service to China. But using our business model we plan to extend our services working with the following countries as well: India, Taiwan, Vietnam and Malaysia.

6.5) HOW DOES CGT TRADING CHARGE FOR IT’S SERVICE ?

→ Our service fee is based on the commission we charge. → Once the customer has progressed to order we add a commission of 3-7% to the factory price based on the order volume.

6.6) PAYMENT TERMS

→ Our payment terms mirror that given by Chinese factories we work with. → Our standard terms for sourcing and supplying product is 30% deposit /down payment prior to starting order and 70% prior to shipment. → We will also work with Letters of Credit

6.7) CAN COMPANIES WITHOUT AN IMPORTERS CODE WORK WITH YOU ?

Since payments are facilitated through our SA bank account, Cardinal Global will be the seller and importer in the transaction unless otherwise specified. Therefore companies without an importers code can certainly work with us.

6.10) IS IT ONLY SOUTH AFRICA YOUR SERVICE IS LIMITED TO ?

Understanding our client’s enquery in detail is important in our delivery process. Currently with our sales office at DCCI, our service is limited to SA clients with bias to KZN.

6.11) WHAT KIND OF BACK-UP SERVICE DO YOU OFFER ?

We are our client’s partner in China and help to attend to the services that go beyond the initial sale. We add customer service such as spare parts guarantee, technical information, product updates and strong communications to the Chinese goods we supply.

6.12) CAN CHINA COMPANY VERIFICATION SERVICE BE OUTSOURCED ?

• Yes. Our model for company verification has worked well with our current clients in managing the quality

and reliable of factories we have worked with. Hence it is workable to employ this model to assist SA companies to screen Chinese factories they have plans to work with.

6.13) DOES CGT HANDLE EXPORTS TO CHINA ?

We are currently in the process of establishing favourable products for export to China. We hope to have

• ur export program running in the next coming months.

6.9) WHAT IS THE LEAD TIME FROM ORDER TO DELIVERY ?

From payment to delivery, we are looking at approximately 7-10 weeks.

6.8) WHAT IS THE MINIMUM ORDER VOLUME NEEDED TO WORK WITH CGT ?

We usually work on a minimum order volume of 1 x 20ft Full Container Load (FCL) but depending on the type and value of cargo we can also arrange Less than container load (LCL) shipments.

You too can say, “We have a man in China who handles that for us.”

THANK YOU