Embed Size (px)
Citation preview
The experience of EU importer
with GSP - Form A
23/04/2015 3
• Bianchi company overview
• Bicycle EU import duties
• History of bicycle production in Cambodia
• Cambodia opportunity for Bianchi
• Upsides
• Downsides
• Worries
Agenda
23/04/2015 4
• Bianchi company overview
• Bicycle EU import duties
• History of bicycle production in Cambodia
• Cambodia opportunity for Bianchi
• Upsides
• Downsides
• Worries
Agenda
23/04/2015 5
Company overview
FOUNDED IN 1885
by Edoardo Bianchi in Milan
GLOBAL DISTRIBUTION
Present: - in all continents - in more than 67 countries
HEADQUARTER IN ITALY
Treviglio, Bergamo VISION
Performance bicycle company
CULTURE
historic 130 year old Italian brand and bicycle company
STRATEGY
product driven technology and Italian design
23/04/2015 6
Company overview – Bianchi range
200
1'200
2'200
3'200
4'200
5'200
6'200
7'200
8'200
9'200
Low range Mid range High range
Range and sale price
23/04/2015 7
1. Traditional (mid-high range): Bianchi imports bicycle parts in Italy, produces complete bicycles and sells them everythere
2. Distribution (low-mid range): Bianchi imports and manages the distribution of the complete bicycles
3. Asia Direct: Bianchi ships complete bicycles directly from far east to ‘Pacific area’ countries
4. Royalties: Bianchi receives royalties on sales of products developed directly by the customers
Company overview – Business models
23/04/2015 8
1. Traditional (mid-high range): Bianchi imports bicycle parts in Italy, produces complete bicycles and sells them everythere
2. Distribution (low-mid range): Bianchi imports and manages the distribution of the complete bicycles
3. Asia Direct: Bianchi ships complete bicycles directly from far east to ‘Pacific area’ countries
4. Royalties: Bianchi receives royalties on sales of products developed directly by the customers
Company overview – Business models
23/04/2015 9
• Bianchi company overview
• Bicycle EU import duties
• History of bicycle production in Cambodia
• Cambodia opportunity for Bianchi
• Upsides
• Downsides
• Worries
Agenda
23/04/2015 10
Bicycle EU import duties
Bicycle european standard import duty: 1. No GSP 14%; 2. With GSP 0% (starting from 2011). Bicycle european anti-dumping import duty: 1. Chinese origin since 1993: 48,5% 2. Vietnamese origin since 2005: 34,5% 3. Other origin: 0%.
23/04/2015 11
Bicycle EU import duties
Bicycle european standard import duty: 1. No GSP 14%; 2. With GSP 0% (starting from 2011). Bicycle european anti-dumping import duty: 1. Chinese origin since 1993: 48,5% 2. Vietnamese origin since 2005: 34,5% 3. Other origin: 0%.
23/04/2015 12
• Bianchi company overview
• Bicycle EU import duties
• History of bicycles production in Cambodia
• Cambodia opportunity for Bianchi
• Upsides
• Downsides
• Worries
Agenda
23/04/2015 13
History of bicycle production in Cambodia
A large number of Tawainese bicycle manufacturers set up operations in Vietnam after 2000, attracted by the four-year tax reduction and tax exemption incentives offered by the Vietnamese government. When the EU implemented anti-dumping duties in 2005 against bikes and parts produced in Vietnam, it dealt a body blow to complete bicycle exporters and devasted the parts industry in the country.
23/04/2015 14
History of bicycle production in Cambodia
As result, Tawainese complete bicycle producers were forced to move to Cambodia or Thailand, return to Tawain or shut down completely.
23/04/2015 15
History of bicycle production in Cambodia
23/04/2015 16
History of bicycle production in Cambodia
23/04/2015 17
History of bicycle production in Cambodia
In addition, during 2011, the EU commision has introduced GSP system (0% duty). The GSP system of prefence allows for LDC countries to export everything but arms to the EU, duty free providing the said goods can meet the criteria as laid down in the annex 13 of regulation (EEC) no. 2454/1993. To apply 0% duty Form A is required.
23/04/2015 18
History of bicycle production in Cambodia
Form A is a document that grantes that there is enough local content in the goods exported to EU: 1. The cost of materials not complying with ASEAN
cumulation max 30% 2. Specific manufacture activities (wheels
assembly, painting, …) have to be made in Cambodia
23/04/2015 19
History of bicycle production in Cambodia
0
500
1'000
1'500
2'000
2'500
3'000
3'500
4'000
2009 2010 2011 2012 2013
EU imports of bicycles from 4 major Asian countries (x 1.000 units)
Cambodia China Taiwan Thailand
23/04/2015 20
History of bicycle production in Cambodia
0
50
100
150
200
250
300
2006 2007 2008 2009 2010 2011 2012 2013
Average production cost per bicycle (in Euro)
Cambodia China Taiwan Thailand
23/04/2015 21
• Bianchi company overview
• Bicycle EU import duties
• History of bicycles production in Cambodia
• Cambodia opportunity for Bianchi
• Upsides
• Downsides
• Worries
Agenda
23/04/2015 22
Cambodia opportunity for Bianchi
0
50
100
150
200
250
300
2006 2007 2008 2009 2010 2011 2012 2013
Average production cost per bicycle (in Euro)
Cambodia China Taiwan Thailand
Bian
chi b
icyc
les
23/04/2015 23
Cambodia opportunity for Bianchi
0
500
1'000
1'500
2'000
2'500
3'000
3'500
4'000
4'500ao
ût.1
2
sept
..12
oct..
12
nov.
.12
déc.
.12
janv
..13
févr
..13
mar
s.13
avr..
13
mai
.13
juin
.13
juil.
.13
août
.13
sept
..13
oct..
13
nov.
.13
déc.
.13
janv
..14
févr
..14
mar
s.14
avr..
14
mai
.14
juin
.14
juil.
.14
août
.14
sept
..14
oct..
14
nov.
.14
déc.
.14
Purchased bikes
Trial order
23/04/2015 24
• Bianchi company overview
• Bicycle EU import duties
• History of bicycles production in Cambodia
• Cambodia opportunity for Bianchi
• Upsides
• Downsides
• Worries
Agenda
23/04/2015 25
1. Cambodia has proven to be able to produce quite mid-high quality bikes, which normally we would only find from Taiwan
2. Cambodia is a preferred supply option due to the 14% duty saving, compared to Taiwan
3. The form A facilitates the duty free, and because it is issued by a Government body, it gives to Bianchi the feeling of safety that the RoO are being followed
Upsides
23/04/2015 26
• Bianchi company overview
• Bicycle EU import duties
• History of bicycles production in Cambodia
• Cambodia opportunity for Bianchi
• Upsides
• Downsides
• Worries
Agenda
23/04/2015 27
1. Italian customs demonstrated and demonstrates to have some doubts in believing the form A from Cambodia. The reason is because not always the goods have been shipped from Cambodian ports instead of the much closer and more convenient HCM port
2. Logistical costs of shipments from Cambodian ports increase the FOB prices over say Taiwan or Vietnam, so the duty saving is partially eroded. Freight cost is higher compare to HK or Taiwan but transportation time is almost the same
Downsides
23/04/2015 28
History of bicycle production in Cambodia
23/04/2015 29
• Bianchi company overview
• Bicycle EU import duties
• History of bicycles production in Cambodia
• Cambodia opportunity for Bianchi
• Upsides
• Downsides
• Worries
Agenda
23/04/2015 30
1. Worried about rule changes and GSP/LDC status as moving production to an alternative source takes a lot of time and work
2. Worried about strikes and disruptions to production as has happen in the past
3. As consequence the labor cost is expected to rise
Worries
23/04/2015 31
1. Risk connected to Form A: a) ASEAN countries that are contributing to cumulative Form A may be
progressively reduced b) Working or processing which confers originating status may be changed
2. EU regulation: a) EU commission, worried about the high performance of Cambodia production,
could introduce more restrictions and duties in order to protect the EU local industry
Worries – 1. Rule changes and GSP/LDC status
